Friday, September 2, 2011

20110902 1806 FCPO EOD Daily Chart Study.

FCPO closed : 3050, changed : +41 points, volume : higher.
Bollinger band reading : side way range bound little downside biased.
MACD Histrogram : rising, buyer testing market.
Support : 3050, 3020, 2970, 2930 level.
Resistance : 3070, 3100, 3150, 3200 level.
Comment :
FCPO closed recorded gains with better but relatively low volume participation while overnight soy oil closed little substantially lower and currently rebounding higher while crude oil trading lower.
Price opened and traded through out the day in positive territory as rival soy oil recorded substantial gains for the past 3 days(holidays in Malaysia). Export wise, ITS and SGS reported almost flat exports for the month of August versus July.
Daily chart formed a down doji bar candle with lower shadow closed nearer to upper Bollinger band level after market opened gap up, eased lower and trade side way between 35 points range bound market to closed in the middle of the daily range.
Chart study turned to suggesting a side way range bound little downside biased market development testing support and resistance level.
When to buy : buy at support or weakness with quick cut loss and profit target.
When to sell : sell at resistant or strength with quick cut loss and profit target.

20110902 1731 FKLI EOD Daily Chart Study.

FKLI closed : 1463, changed : +18 points, volume : higher.
Bollinger band reading : correction range bound downside biased.
MACD Histrogram : recovering, seller taking profit.
Support : 1458, 1445, 1425, 1405 level.
Resistance : 1470, 1485, 1500, 1515 level.
Comment :
FKLI closed recorded huge gains with better volume transacted doing 11 points discount compare to cash market that also closed significantly higher. Overnight U.S. market closed lower and Asia markets ended mixed while European markets currently trading lower.
FKLI and KLCI closed much higher after resume trading from 3 holidays break catching up regional market that closed higher previously. Regional market trade from uncertain to negative development today in anticipation of soon to be release U.S. jobless rate to remained above 9 percent.
Daily chart formed an up doji bar candle closed in between middle and lower Bollinger band level after market opened and surged higher, before traded side way range bound and closed off the high of the day.
Technical reading suggesting a correction range bound downside biased market development testing support and resistance level.
When to buy : buy at support or weakness with quick cut loss and profit target.
When to sell : sell at resistance or strength with quick cut loss and profit target.

20110902 1707 Regional Markets EOD Daily Chart Study.

DJIA chart reading : side way range bound.
Hang Seng chart reading :  side way range bound.

KLCI chart reading : correction range bound downside biased.

20110902 1533 Global Market & Commodities Related News.

Equities rally fizzles before U.S. data; franc up
HONG KONG, Sept 2 (Reuters) - Asian shares dipped on Friday but were still poised to score a solid weekly gain of about 4 percent while the Swiss franc edged higher as market players booked profits ahead of a key U.S. jobs report.
"Global economic worries are the main focus and volume has been relatively low recently. At times like this, both buying and selling can be risky, so this is keeping stocks trapped in their recent ranges," said Yutaka Miura, senior technical analyst at Mizuho Securities.  

US corn rebounds after selloff; wheat, soy firm
SINGAPORE, Sept 2 (Reuters) - U.S. corn futures bounced back on Friday, rising more than 1 percent, while wheat strengthened on short-covering after a selloff in the previous session which saw both markets suffer their biggest daily losses in two months.
"It is a bit of a recovery from selloff as we had a pretty solid selloff last night," said Brett Cooper, senior manager for markets at FCStone Australia. "Last night we saw the market take profit off the books as we are in a new month now and today we are seeing some short-covering."

ADM says only accepts corn approved for use in EU
CHICAGO, Sept 1 (Reuters) - U.S. agricultural processor Archer Daniels Midland  said on Thursday it only accepts corn varieties approved for use in the European Union, which would exclude Syngenta's  biotech Agrisure Viptera variety that some other large grain processors have barred.
"Our grain purchase contracts contain language explaining that we only accept grain approved for commercial use in the European Union. We have this language in our contracts because we sell corn products to customers in the E.U.," ADM spokesman Roman Blahoski said.

Mexico producers see bigger coffee crop in 2011/12
MEXICO CITY, Sept 1 (Reuters) - Mexico, a top 10 producer of high-quality arabica coffee, should harvest a larger coffee crop next season as prices, which are at a four-month high, will likely motivate more production, a producer group said.  A larger crop could help ease global supply worries.
Mexico should produce between 4.5 million and 4.7 million 60-kilogram bags of coffee in the 2011/2012 season that begins in October, Rodolfo Trampe, head of the Amecafe producers' group, said on Thursday.

Cotton use to return to growth as output rises-ICAC
WASHINGTON, Sept 1 (Reuters) - Global cotton mill use should return to slow growth in 2011/12 after high prices caused consumption to decline the previous year, an international farm group said on Thursday.
The International Cotton Advisory Committee secretariat said an 8 percent boost in world cotton production to the largest crop since 2004/05 would facilitate the rise in use.

German farm ministry sees grain crop down 6 pct
HAMBURG, Sept 1 (Reuters) - Germany's 2011 grain crop of all types is likely to fall by 6 percent on the year to around 41 million tonnes, Germany's agriculture ministry said on Thursday.
German crops have suffered from a springtime drought followed by repeated harvest-time rain, it said. The 2011 winter wheat harvest will fall 3.7 percent on the year to 22.6 million tonnes, it said. The wheat harvest of all types will fall 3.4 percent to 22.97 million tonnes, it said.

Brent steady above $114; eyes on U.S. jobs, storms
SINGAPORE, Sept 2 (Reuters) - Brent crude was steady above $114 a barrel, headed for its second straight weekly gain, while investors eyed key U.S. jobs data for clues on whether the world's largest oil consumer would be able to dodge a recession and leave demand growth intact.
"The market is still expecting some concrete steps from the Fed to boost the economy," said Yusuke Seta, a commodity sales manager at Newedge Japan, adding that the sentiment helped to support oil prices.

Oil firms bet on survival of Syria's Assad
LONDON, Sept 1 (Reuters) - Oil companies in Europe are betting on the survival of President Bashar al-Assad in Syria, in contrast to their support for Libya's opposition six months ago, even as the European Union is expected to slap oil sanctions on Damascus. Several tankers are sailing to Syria this week to either deliver fuel or pick up crude.  
The same companies, including Swiss-based trader Vitol, made the opposite bet when it came to trade in Libya. They agreed to supply opponents of Muammar Gaddafi with fuel in the hope their support would be rewarded at the end of the war.

US LNG imports dive 44 pct, hit 8-1/2 year low-DOE
NEW YORK, Sept 1 (Reuters) - U.S. imports of liquefied natural gas in July slid 44 percent to the lowest monthly level in more than eight years as ample U.S. gas supply and low prices deterred shipments, according to Department of Energy data on Thursday.
Imports fell to 20.2 bcf, the slowest since December 2002 and down from 36.3 bcf in July 2010.
U.S. imports have been declining throughout 2011 as shippers send gas to higher-paying markets in Europe and Asia. June imports fell 16 percent, May imports fell 12 percent.

LME copper steady; U.S. payrolls data eyed
SHANGHAI, Sept 2 (Reuters) - LME copper prices were little changed on Friday, after snapping  a six-day rally in the previous session, as investors remained cautious ahead of a key U.S. payrolls data.
While encouraging U.S. factory and initial jobless claims numbers that tempered recession fears underpinned prices, concerns about the European economy were expected to weigh on sentiment.

Peru's only iron producer declares force majeure
LIMA, Sept 1 (Reuters) - Peru's only iron producer, Shougang Hierro Peru, declared force majeure on its deliveries due to a workers strike, the company's general manager said on Thursday.
The company's 1,124 workers laid down their tools on Wednesday in an indefinite strike demanding higher salaries.
"We've declared force majeure due to the strike, production has completely stopped," General Manager Raul Vera said, referring to a contract clause that frees it of liability over delays.

Chile Collahuasi stoppage less likely -union source
SANTIAGO, Sept 1 (Reuters) - A threatened 24-hour work stoppage at the world's No. 3 copper mine, Chile's Collahuasi, is now less likely after "advances" in negotiations with the mine's operator, a union source said on Thursday.
The union threatened to down tools on Sept. 2 after the operator of a mine that produces around 3 percent of the world's copper fired six workers following a 24-hour partial stoppage in late July. This came amid a rash of labor unrest in the world's top copper producer.

China cuts aluminium output due to power shortage
SHANGHAI, Sept 1 (Reuters) - Aluminium producers in China's Guangxi province will start cutting production in September due to power shortages there, a move that is expected to support prices in the fourth quarter, industry sources said.
Around 15 percent, or over 120,000 tonnes per year, of Guangxi's 810,000-tonne annual production capacity of aluminium may be affected by the power shortages.

Gold steady ahead of U.S. payrolls
SINGAPORE, Sept 2 (Reuters) - Gold prices held steady on Friday as investors stood on the sidelines ahead of a key U.S. payrolls report due later in the day, after recent data sent mixed signals about the status of the world's largest economy.  
"Gold seems to have a trading band of $1,810 and $1,840, and is unlikely to break the range ahead of the payrolls data," said David Thurtell, a Citigroup analyst.

20110902 1109 Global Market & Commodities Related News.

GLOBAL MARKETS - Bonds, Swiss franc rise on recession jitters
NEW YORK, Sept 1 (Reuters) - Government debt and the Swiss franc gained on Thursday after slowing factory output around the world renewed worries that the global economy is on the brink of recession, sparking a rally in safe-haven assets.  "At the end of the day, this does not remove the need for more stimulus from the Fed," Kathy Lien, director of research at GFT Forex in New York, said of the data. "The key is still job growth."

Brent dips on weak economy, US crude up on storm
NEW YORK, Sept 1 (Reuters) - Oil in London fell on Thursday on concerns about the European economy, while U.S. crude rose slightly as a brewing storm in the Gulf of Mexico shut nearly 6 percent of output in the key producing region.
"The stock market is lower and helping to pull U.S. crude back and the weak German and French data weighed on Brent," said Dan Flynn, analyst at PFGBest Research in Chicago.

US LNG imports dive 44 pct, hit 8-1/2 year low-DOE
NEW YORK, Sept 1 (Reuters) - U.S. imports of liquefied natural gas in July slid 44 percent to the lowest monthly level in more than eight years as ample U.S. gas supply and low prices deterred shipments, according to Department of Energy data on Thursday.
Imports fell to 20.2 bcf, the slowest since December 2002 and down from 36.3 bcf in July 2010.
U.S. imports have been declining throughout 2011 as shippers send gas to higher-paying markets in Europe and Asia. June imports fell 16 percent, May imports fell 12 percent.

Oil companies brace for possible U.S. Gulf storm
HOUSTON, Sept 1 (Reuters) - Major oil and gas producers in the Gulf of Mexico on Thursday shut down offshore platforms and evacuated workers ahead of a storm brewing offshore that was expected to bring flooding to Louisiana over the weekend.
The Miami-based National Hurricane Center said on Thursday evening that the system had formed into Tropical Depression 13 and was expected to become a tropical storm by the time it crosses the central Louisiana coast late Saturday.

NYMEX - Natural gas ends near flat after seesaw session
NEW YORK, Sept 1 (Reuters) - Front-month U.S. natural gas futures ended nearly unchanged on Thursday after a seesaw session, with a bullish inventory report and storm concerns before a long weekend countered by milder weather forecasts.
"What is seemingly offsetting any bullish sentiment from the tropics (or the EIA report) is the latest short-term weather forecast, which is showing the eastern half of the U.S. engulfed in normal to colder-than-normal temperatures," Energy Management Institute's Dominick Chirichella said in a report.

20110902 1105 Renewable Energy Related News.

LONDON, Aug 30 (Reuters) - More than one third of UK farmers want to install renewable energy projects on their farmland, most of them within the next year, and hope to generate average returns of 25,000 pounds ($40,565) per year, UK bank Barclays  said.
The bank's business arm on Tuesday launched a 100-million pound fund to help farmers finance renewable energy projects, including solar panels, wind farms, hydro plants and organic waste power as a growing number of agricultural businesses seek to benefit from government support tariffs.

MADRID, Aug 30 (Reuters) - Spanish water reserves, which are crucial to determining the extent of the country's hefty dependence on gas and grain imports, fell last week but are still above average, the latest official data showed on Tuesday.
Reservoirs set aside for hydropower plants held enough water to produce 12,589 gigawatt-hours of electricity, the Ministry for the Environment and Rural Affairs said .

Aug 29 (Reuters) - A unit of NextEra Energy Inc , the largest U.S. renewable energy operator, said it secured $935 million in construction and term financing to build a 250-megawatt solar thermal power generating facility in California.
The financing consists of $702 million in project bonds, a $150 million project term loan facility and an $83 million project letter of credit facility.

LOS ANGELES, Aug 29 (Reuters) - The United States was a net exporter of solar energy products last year, thanks to strong demand from China, Germany and Japan for U.S.-made polysilicon and capital equipment used to make solar panels.
U.S. photovoltaic-related exports totaled $5.6 billion in 2010, compared with imports of $3.7 billion, according to a study by GTM Research prepared for the Solar Energy Industries Association, a U.S. trade group.

BERLIN, Aug 29 (Reuters) - Chinese solar module maker Yingli  is unlikely to add production capacity in Europe, the head of its European operations told Reuters, pointing to slowing growth in the region after cuts in subsidies.
"It would be difficult to look at capacity expansion in Europe," Stuart Brannigan, also a member of Yingli's management board, said on Monday on the sidelines of the Handelsblatt conference for renewable energy, adding acquiring European solar companies was "probably not on our agenda".

Aug 26 (Reuters) - Collins Stewart upgraded First Solar Inc  to "buy," saying the solar company will benefit from the projects it received over the last one month.
The world's largest solar company by market value received contracts for building solar projects by Sempra Generation -- a unit of Sempra Energy  -- and NRG Energy in Nevada and California over the last month, Collins Stewart said.

LONDON/PRAGUE, Aug 26 (Reuters) - Wind power is surging in Poland and Romania, as is solar in the Ukraine, offering opportunities to investors who are facing tougher times in Europe's more established markets.
Despite fears of a double-dip recession in Europe and North America, central and eastern Europe are pressing on with energy infrastructure plans ailing after decades of underinvestment.

Aug 26 (Reuters) - German carmaker Volkswagen  will boost its planned commitment to renewable energy, investing almost 1 billion euros ($1.44 billion) in the production of environmentally friendly energy over two years, the Financial Times Deutschland reported.
This would be a substantial increase over the previous mid-term target of roughly 600 million euros Volkswagen, Europe's largest carmaker, announced at the end of June.

LONDON, Aug 26 (Reuters) - UK wind power generation surged by 131.1 percent in the second quarter compared with the same period last year, figures released by the Department of Energy and Climate Change show.
Higher production was due to increased capacity and much higher wind speeds during the quarter, according to trade group RenewableUK.

TOKYO, Aug 26 (Reuters) - Laws to promote renewable energy in Japan passed a final hurdle on Friday, with the upper house of parliament formally approving a scheme that investors hope will ramp up spending on solar, wind and other green energy.
The country is struggling to overhaul its energy policies after the March quake and tsunami triggered a nuclear disaster that shattered the public's confidence in the safety of the atomic industry and delayed the restart of idled plants. Costly oil and gas imports have soared.

NEW YORK/FRANKFURT, Aug 25 (Reuters) - A brutal 2011 has left the solar industry dazed, damaged and on the cusp of a major shakeout of weaker players who are more likely to shut down than be snapped up by their stronger rivals.
Solar subsidy cuts in top markets Italy and Germany prompted a 20 percent drop in the price of solar panels this year, bringing the fast-growing solar industry to a critical tipping point. Even companies that had been stock market heroes find themselves as the walking wounded, struggling to cut costs in a market awash with solar panels.

TOKYO, Aug 25 (Reuters) - Sales of solar cells in Japan rose 30.7 percent from a year earlier to 258.6 megawatts in April-June, slowing slightly from a 33.4 percent increase in the previous quarter, industry data showed on Thursday.
Exports of solar cells in the quarter soared 23.3 percent from a year earlier to 438.9 MW, the Japan Photovoltaic Energy Association data also showed, accelerating from a 9.8 percent rise in January-March.

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.

20110902 1104 Biofuels Related News.

BRASILIA, Aug 30 (Reuters) - Brazil's weather-ravaged sugar cane crop could rebound next year, helping the country begin to revive lagging ethanol production, an agriculture official said on Tuesday, but raising output to a comfortable level will take time and effort.
The world's top sugar producer has been unable keep output of cane ethanol biofuel in step with fast growing demand after adverse weather slashed yields and after mills recovering from the 2008 financial crisis slackened investments.

HAMBURG, Aug 30 (Reuters) - HAMBURG, Aug 30 (Reuters) - Germany's government and its oil industry association on Tuesday disagreed about whether the country can reach its 2011 biofuel use quotas as sales of a new gasoline blend with a higher biofuel content remain sluggish.
The German government this year raised the maximum permitted level of bioethanol blended in gasoline to 10 percent from 5 percent previously as part of Germany's programme to protect the environment by cutting CO2 emissions.

LONDON, Aug 30 (Reuters) - Rising global demand for cleaner energy from biomass could drive more land acquisition in poorer nations where food security and land rights are weak, an International Institute for Environment and Development report said on Tuesday.
"If left unchecked, the growing pressure on land access  could undermine livelihoods and food security in some of the world's poorest countries," the London-based non-profit research group said, calling for more public scrutiny into global biomass expansion plans.

COPENHAGEN, Aug 30 (Reuters) - Denmark's DONG Energy [DONG.UL] and local partners will explore the possibility of building a bioenergy complex, including a large-scale bioethanol plant to turn straw into fuel.
State-owned DONG has joined two local energy providers and a waste firm to form a consortium called Maabjerg Energy Concept, which will determine the feasibility of the project in western Jutland over the coming 15 months.

BRASILIA, Aug 29 (Reuters) - Brazil will cut the amount of ethanol biofuel it puts in its gasoline from October 1, the energy minister said on Monday, after a disappointing sugar cane crop too small to keep pace with growing demand.
Anhydrous ethanol content in gasoline will fall to 20 percent, down from the years-old 25 percent requirement, as a means to stretch projected supplies of ethanol.

BRASILIA, Aug 26 (Reuters) - The inability of Brazil's cane sector to keep up with growing demand for sugar and ethanol may worsen in the future if a government practice limiting land purchases by foreigners is maintained.
Foreign-controlled companies are now limited in the amount of land they can buy in Brazil after the Attorney General's office last year reinterpreted a law on the control of farm land by foreign capital. The decision was prompted by government concerns that alarming amounts of local land might be coming under control of foreign elements.

WASHINGTON, Aug 24 (Reuters) - Lax trade restrictions and high sugar prices should allow the United States to overtake Brazil in ethanol exports during the second half of 2011, the U.S. Energy Information Administration said on Wednesday.
During the first five months of 2011 U.S. ethanol exports more than doubled from the same period last year, the EIA said.

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.

20110902 1103 Local & Global Economic Related News.

Malaysia has performed overwhelmingly in wooing  foreign direct investments (FDIs) in  the first half of this year, having attracted RM21.3bn vis-a-vis RM12.1bn in the same period  last year. International Trade and Industry Minister Datuk Seri Mustapa Mohamed said with  such high FDI inflow, he believed the FDI for this year would exceed the RM29.3bn  attained last year (RM5.0bn in 2009).  
• The strong recovery in the FDI inflow would also ensure realisation of the projected  RM3.0bn private sector investment this year.  
• Between Jan and July, 514 manufacturing projects totalling RM31.7bn were approved.  He said 313 projects, with a cumulative investment  of RM15.9bn (50.2%) were new  projects, while 201 projects, with a combined investment of RM15.8bn (49.8%), were  expansion and diversification projects.
• The approved foreign investments are primarily in the electrical and electronics  industry, accounting for RM7.2bn; metal-based products (RM2.4bn); food processing  (RM1.8bn); chemical and chemical products (RM1.0bn); transportation apparatus  (RM902.4m); petroleum products, including petrochemical (RM520.8m); and  fabricated metal products (RM520.7m).
• The top investing countries are Japan, with RM2.4bn total investments, the U.S.  (RM2.3bn); Singapore (RM1.9bn); the Netherlands (RM1.2bn); and Taiwan  (RM1.2bn). (Bernama)

Singapore’s domestic loan book of banks grew by 27.8% yoy in Jul (26.2% in Jun), the fastest pace in 12 years. On a mom basis, loans rose 2%. (CNA, Straits Times)

Thailand: Inflation rate accelerates to fastest pace since 2008
Thailand’s inflation rate accelerated in August to the fastest pace since 2008 as rising food prices countered a decline in oil costs. An index of consumer prices climbed 4.29% y-o-y, the Ministry of Commerce said, compared with a 4.08% pace in July. The Bank of Thailand signaled it may be nearing the end of monetary tightening after raising the benchmark interest rate for the seventh straight meeting last month. (Bloomberg)

South Korea: Inflation accelerates to 3-year high of 5.3%
South Korea’s inflation accelerated to the fastest pace in three years in August on rising food prices, adding to pressure on the central bank to increase borrowing costs. Consumer prices rose 5.3% y-o-y, after a 4.7% gain in July, Statistics Korea said. Prices rose 0.9% from July. The Bank of Korea needs to weigh whether the threat of inflation is bigger than risks to growth as slowing global demand weighs on industrial output and corporate and consumer confidence. (Bloomberg)

China: Manufacturing index is near 29-month low in August
Chinese manufacturing index stayed near the borderline between expansion and contraction in August, signaling limits for more monetary tightening. The Purchasing Managers’ Index was at 50.9, from the 29- month low of 50.7 in July, the China Federation of Logistics and Purchasing said. Premier Wen Jiabao signaled yesterday that a faltering global recovery and turbulence in financial markets have yet to convince the government to switch from a focus on taming inflation. (Bloomberg)

China’s Purchasing Managers’ Index was at 50.9 in Aug, from the 29-month low of 50.7 in Jul, the China Federal of Logistics and Purchasing said. A reading above 50 indicates expansion. Economists expected a reading of 51.0. (Bloomberg)
Hong Kong's  retail sales soared 29.1% yoy in Jul (+28.8% in Jun)as an improving economy and increase in the number of tourist arrivals bolstered local spending.  After taking out the inflationary effect, retail sales by volume jumped 22.4% yoy. (China Daily)

Japanese household spending fell 2.1% yoy in Jul (-3.5% in Jun) in price-adjusted real terms , government data showed, with the pace of falls narrowing in a sign consumption is recovering from the Mar natural disaster. Economists forecast for a 3.0% decline. (Reuters)
Japan’s jobless rate stood at a worse-than-expected 4.7% in Jul (4.6% in Jun), excluding figures from the disaster-hit northeast of the country, the government said. The market had expected the rate to be flat at 4.6%. (AFP)
Japanese retail sales rose 0.7% yoy in Jul (+1.2% in Jun) to mark their second straight month of increases, government data showed, as consumer spending recovers following a large earthquake, tsunami and a nuclear crisis in Mar.  Economists  forecast for a 1.0% increase. (Reuters)
Japanese manufacturing activity slowed in Aug for the first time in two months as worries about a strong yen and subdued demand from  China weighed on new export orders, a survey showed. The Markit/JMMA Japan Manufacturing Purchasing Managers Index (PMI) fell to a seasonally adjusted 51.9 in Aug from 52.1 in Jul. (SBT)
Japan's industrial production rose by 0.6% mom in Jul (+3.8% in Jun), government data showed. Economists expected a 1.5% gain. (AFP)
Japan's vehicle production fell 8.9% yoy in Jul for the 10th consecutive monthly decline, an industry body said. Output of passenger cars in July declined 10.4% to 669,331 units. (Mainichi Japan)

India: Food inflation quickens, sustaining interest-rate pressure
India’s food inflation accelerated to a four-month high and exports surged, sustaining pressure on the central bank to raise interest rates even as growth slows. An index measuring wholesale prices of farm products including rice and wheat rose 10.05% in the week ended 20 Aug y-o-y, the commerce ministry said. Merchandise shipments jumped 81.8% to USD29.3bn in July y-o-y. Gains in food prices have kept India’s inflation rate the highest among major economies in Asia, prompting central bank Governor Duvvuri Subbarao to boost borrowing costs at a record pace since mid-March 2010. (Bloomberg)

Australia: Retail sales, business investment exceed estimates
Australian retail sales advanced for the first time in three months and mining projects boosted business investment, sending the nation’s currency higher and prompting traders to reduce bets on interest-rate cuts. Sales advanced 0.5% in July m-o-m, when they fell 0.1%. Australia, the only developed economy to avoid a recession during the global contraction of 2009, is undergoing what Reserve Bank Governor Glenn Stevens last week called a “structural adjustment” as the biggest mining boom in more than a century drives the nation’s currency to a record. The rising local dollar is hurting exporters, and the unemployment rate last month rose for the first time since October 2010. (Bloomberg)

UK: Manufacturing contracts most in more than two years
UK manufacturing shrank the most in more than two years in August as demand from domestic and overseas customers weakened. New orders fell the most in almost 2 1/2 years and employment declined for the first time in 17 months. Manufacturers said the drop in demand was due to weaker domestic and export sales and “rising global economic uncertainty.” (Bloomberg)

Eurozone economic sentiment fell to 98.3 in Aug (103 in Jul) with optimism declining in all sectors. Economists expected a fall to 100.5. (Reuters)
Eurozone consumer sentiment declined to -16.5 in Aug from -11.2 in Jul. Economists expected a reading of -16.6. (Reuters, Bloomberg)
Eurozone services confidence halved to 3.7 in Aug from 7.9 in Jul. against Economists expected an easing to 6.3. (Reuters)
Eurozone industry sentiment index fell into negative territory -- at -2.9 in Aug (0.9 in Jul) -- for the first time since Sep 10, against expectations of a drop to -1.5. (Reuters)
Eurozone inflation was 2.5% yoy in Aug, the same as in Jul. The reading matched economists’ expectations. (Reuters)
Eurozone unemployment rate was 10% in Jul, unchanged from Jun. But the number of unemployed in the eurozone rose by 61,000 to 15.757m in Jul. (Reuters)
The eurozone manufacturing purchasing managers' index compiled by Markit logged 49.0pts in Aug, down from 50.4 in Jul. Any score below 50 indicates contraction, while anything above suggests expansion. Economists expected a reading of 49.7. (AFP, Bloomberg)

US: Consumer comfort falls as confidence in economy slumps
Consumer confidence declined last week as sentiment about the US economy slumped to the second lowest level in two years. Unemployment above 9%, limited wage growth and a volatile stock market are deflating consumers’ moods, posing a threat to household spending. The report showed confidence among homeowners was close to an all-time low as property values remain depressed. (Bloomberg)

US stocks retreat as treasuries gain before August jobs report
US stocks slid, halting a four-day rally, Treasuries advanced and commodities declined as investors turned their attention to tomorrow’s report on American jobs to gauge the outlook for the economy. The S&P 500 Index lost 1.2% to 1,204.42 after surging 5.1% in the previous four sessions. The gain in Treasuries drove 10-year yields down nine basis points to 2.13%. The Dow Jones Industrial Average fell 1.0% to 11,493.57. Payrolls may have climbed by 68,000 in August following a 117,000 increase in July, according to the median forecast. Concern about the employment data overshadowed an Institute for Supply Management report that showed growth in US manufacturing. (Bloomberg)

U.S. nonfarm business sector labor productivity decreased by 0.7% yoy in 2Q, the U.S. Bureau of Labor Statistics reported, with output and hours worked rising 1.3% and 2.0%, respectively. Economists expected a reading of -0.5%. (Bloomberg)
U.S. initial jobless claims fell to 409,000 in the week ended 27 Aug (421,000 in the prior week), the Labor Department said. Economists were predicting initial claims would fall to 407,000 during the week. Continuing claims -- which include people filing for the second week of benefits or more -- fell by 18,000 to 3.7m in the week ended 20 Aug, the most recent data available. (CNNMoney)
U.S. construction spending fell by 1.3% mom in Jul (+1.6% in Jun), the biggest since Jan, Commerce Department figures showed. Economists  called for a 0.2% increase. (Bloomberg)

20110902 1102 Malaysia Corporate Related News.

Sime Darby has purchased an approximately 30% stake in developer  Eastern and  Oriental  (E&O) for RM766m. The deal works out to be RM2.30 per E&O share or  approximately a 20% discount to E&O’s estimated Realisable Net Asset Value (RNAV) of  RM3.2bn. Sime Darby said in a statement today that it will acquire the stake from Dato’  Tham Ka Hon, the Managing Director of E&O and several other major shareholders of  E&O. The two companies also entered into a three-year collaboration agreement  to  formalise a broad collaborative framework with regard to their property development  businesses. “The decision to acquire the shares is  aligned with the Sime Darby Group’s  strategic direction to extend its presence in the property development and hospitality  sectors, beyond the Greater KL region, specifically  in Penang and Johor,” said Sime  Darby. (Malaysian Insider)    

Genting Group is further expanding its presence in Miami, Florida several months after it  unveiled its US$3bn Resorts World Miami mixed development project. Its latest acquisition  was in mid-August when it purchased a 17,500-sq-ft plot of land north of downtown Miami  for US$1.25m from former Sony Music executive Tommy Mottola. Genting’s 42%-owned  investment holding company Two Digital, had acquired the property. Miami-Dade County  property records showed Two Digital had also in August earlier acquired 3.6 acres of  mostly vacant land for US$29.4m. The 3.6 acres of land is within walking distance from the  Miami Herald headquarters building acquired by Genting. (Financial Daily)    

The development of new casinos and resorts in Singapore is not expected to materially  cannibalise the performance of  Genting’s Resorts World Malaysia given its monopoly  operation in Malaysia, according to Moody’s Investors Services. Moody’s said the outlook  for Resorts World Malaysia was stable. “Moreover, about 70% of Resort World's revenues  come from day-trippers and local residents. These customers are less mobile and form a  stable base for the Malaysian casino's revenue streams,” it said in a report. Moody's said  the outlook for the Asia-Pacific gaming sector was stable with a positive bias. (Financial  Daily)      

Johor Premium Outlets (JPO) in Kulaijaya is set to open its doors to shoppers on Nov 11,  or the auspicious 11-11-11 date.  Genting senior manager (Strategic Investments) Jean  Marie Pin Harry said that initially, JPO would offer about 80 branded items. "Shoppers will  enjoy between 25% and 65% discounts on branded items all-year round," said Pin Harry.  (Asiaone)    

Following the EPF's foray into overseas property markets,  Lembaga Tabung Haji and  Permodalan Nasional Berhad are looking to do the same and have sent out feelers about  this, industry players said. Like the EPF, both funds are looking to buy into existing premium properties for their yield. And also like the EPF, both had targeted London as their  first choice, followed by Australian cities, the insider said. (Starbiz)  

Tan Sri Khoo Kay Peng plans to take Pan Malaysian Industries (PMI) private, by buying  the remaining 44.2% stake he does not own for RM25.11m or 4.5 sen a share. In a Bursa  Malaysia announcement, PMI said it has received an unconditional takeover offer from a  consortium of three companies, namely Soo Lay Holdings, Hong Kong-incorporated  Norcoss and Cherubim Investment (HK), to acquire the remaining 558m shares it does not  own.  
• PMI,  a conglomerate, was formed 25 years ago. Today, its businesses include  Metrojaya and Laura Ashley retail outlets; 10 hotels in the UK and two in Malaysia,  including Corus Hotel KL; brokerage PM Securities Sdn Bhd; property development as  well as food and confectionery. Almost all of its businesses are profitable. (BT)  

Maxis  has lowered its capital expenditure (capex) for the year as its "disciplined" costmanagement programme has helped it save cost without jeopardising expansion plans.  
• The company, whose mobile voice network covers more than 95% of the country,  aims to expand the coverage and quality of its wireless broadband network, as well as  other services. Initially, Maxis had set aside RM1.5bn capex for this year. However,  during the announcement of the first quarter results three months ago, it shared that  cost-saving measures had resulted in reduction in capex to RM1.3bn. For the first half  this year, it spent RM482m on capex.    
• The company, which expects its non-voice revenue to contribute 50% of total revenue  by end-2012, now has a non-voice revenue contribution of 42.4%. Non-voice revenue  includes text messages, music downloads, Internet and data services. Its push on  smart phone packages, tablet packages, and wireless broadband is showing results,  as its Internet and data services now contributes 58% of non-voice revenue. (BT)  

Former MD of Sime Darby Plantation, Datuk Azhar, has been appointed as CEO of MRT  Co, a Ministry of Finance incorporated company.  MRT Co will be the project and owner of  the Klang Valley My Rapid Transit project effective 1 Sept 2011. (Bernama)    

Glomac Bhd’s Group managing director cum chief executive officer Datuk FD Iskandar FD  Mansor Iskandar said prices of properties in Malaysia have not "skyrocketed" as compared  with Hong Kong, China and Singapore. "We are in a highly-regulated industry so it won't be  possible to have an asset bubble here," Iskandar said. He said in general, property prices  in the local housing have been increasing by 5% to 10% per year, which he described as  healthy. He is confident that Glomac will record strong double-digit growth of 30% in the  next two years, led by sales from its current projects. (BT)  

The search for Malaysia Airlines' (MAS) new chief appears to have ended. It is learned  that the executive committee decided on the new managing director (MD) after a meeting.  Ahmad Jauhari Yahya, the former CEO of power producer Malakoff, has been offered the  job to lead the national airline.  
• However, it is unclear if he will take on the job since he has other interests to pursue, said sources familiar with the situation. Ahmad Jauhari is no stranger to the airline  industry since he also sits on the board of Malaysia Airports Holdings.  
• It is understood that Mohammed Rashdan Yusof, the new MAS executive director,  was also on the shortlist. Sources also said that Datuk Kamarudin Meranun, the cofounder of budget carrier AirAsia Bhd, and Datuk Seri Shazalli Ramly, CEO of mobile  operator Celcom Axiata Bhd, too, were considered for the job. (BT)    

The opposition has derided Putrajaya’s plan to hire a public relations firm to boost popular  support for nuclear power as more spin from an administration that they claimed was  becoming known for more talk than action. PKR communications director Nik Nazmi Nik  Ahmad said the revelation that the government will  pick one of three shortlisted public  relations agencies to help get greater buy-in for its planned nuclear power plants showed  that the Najib administration was still more concerned with form over function. “That  speaks volumes about what the Najib administration is about. It’s about PR,” he added.  (Malaysian Insider)    

Sarawak has introduced a new land management system modelled after  Federal Land  Consolidation and Rehabilitation Authority (Felcra) to develop Native Customary Rights  (NCR) land in the state. According to state land development minister Tan Sri Dr James  Masing, the pilot project involving the new land management model was carried out in  Pasai Siong, near Sibu. He said under the new land management model, NCR landowners  would hold 90% shares, with the remainder to be held by Sarawak Land Custody  Development Authority (LCDA). Felcra will source all the funding required and will only  charge management and marketing fees. (Starbiz)    

Labelling of  vegetable oils in the US, Europe and Malaysia has been accepted as  the  industry norm due to health reasons. However in other parts of the world, such as Australia  and New Zealand, the vegetable oils labelling is not carried as there are no laws requiring food manufacturers to do so. Since 2009 however, some of Australia's lawmakers have  been taking steps to change all that. They want to ask food manufacturers to specify the  vegetable oil content, especially palm oil. This has riled up Malaysia, which sees the move  as unfair and discriminatory and can be seen as a non-tariff barrier on palm oil. Plantation  Industries and Commodities Minister Tan Sri Bernard Dompok said it is okay to label palm  oil on food products but Australia must compel other vegetable oils to do the same. The  playing field must be fair. (BT)  

State-owned  POIC Sabah inked a memorandum of understanding on the Joint  Development of EFB (Empty Fruit Bunch) Treatment in Sabah with Kuala Lumpur-based  Global Green Synergy (GGS) to boost up-take of value-adding industries using  oil palm  biomass. POIC Sabah, which is involved in the development of the palm oil industrial  cluster in south eastern Lahad Datu (POIC Lahad Datu) since 2005, is determined to make  a success of the waste to wealth philosophy in the mass utilisation of oil palm biomass.  GGS, which is at the forefront of biomass utilisation in Malaysia, has been exporting fibres  from empty oil palm fruit bunches and is involved with Malaysia Palm Oil Board in a pilot  project in Perak to produce pellets from palm fibres and palm kernel shells. (Starbiz)  

The Malaysia Automotive Institute (MAI) is collaborating with various local universities to  develop skilled human capital for the Malaysian automotive industry. MAI CEO Madani  Sahari said MAI had been collaborating with several local universities to develop  programmes for five levels of talent within the manufacturing sector, namely executives,  engineers, designers, technicians and operators. (Starbiz)  

Up to 60% of Malaysians between 20 and 40-years-old are planning to buy life or health  insurance  products in the next 12 months, representing huge business opportunities for  insurers here. The Generation X and Y segment's strong need for insurance and financial  planning is fuelled by worries about medical expenses and the risk of living longer, a  survey sponsored by global reinsurance firm Swiss Re revealed. The study shows that  61% of the respondents in Malaysia are concerned about the amount they have to pay for  medical expenses relating to major illness, while 62% are concerned that their medical or  health insurance premium will increase beyond their affordability in the future.  (BT)  

A US-based private equity firm is eyeing a  forest plantation project in Sarawak. The  investor plans to invest as much as US$200m to grow highly commercial timber.
• The investor may also like to have local partner and get involved in the whole process  from growing timber, felling, processing, manufacturing and exports. (BT)  

Standard & Poor has lowered MISC’s long-term corporate credit rating to 'BBB+' from 'A-'  with a negative outlook.
• S&P cautioned the inherent risks of the shipping industry, which was volatile and  capital intensive, plus existing global overcapacity and MISC's leverage.
• The outlook also factors in some uncertainty surrounding the company's capital  expenditure plan, which includes a significant expansion in its petroleum tanker fleet, a  segment that is more volatile than the stable LNG business. (Financial Daily)  

English Premier League soccer champions  Manchester United's US$1bn initial public  offering in Singapore will use a two-tier share structure, the Financial Times reported. The  newspaper cited people with knowledge of the transaction as saying the ability to use a  dual share structure was an important reason for the club's decision to switch the IPO from  Hong Kong to Singapore. A two-tier structure, in which some shares have more voting  rights than others, will minimise the influence of outside shareholders over the U.S.-based  owners, the Glazer family. (Reuters, Financial Daily)

Technip eyes USD1bn oil & gas contracts in Malaysia
France’s Technip is eyeing contracts worth about USD1bn (RM2.98bn) in the Malaysian oil and gas industry this year. Top on the list of projects that Technip has tendered for is the Malikai deepwater project offshore Sabah, the third deepwater development in Malaysia after Kikeh and Gumusut-Kakap, also located offshore Sabah. The company, via its Malaysian unit, is bidding for the tension-leg platform (TLP) for the Malikai deepwater development offshore Sabah. (BT)

Glove makers set to raise prices
Rubber glove makers are set to raise prices of their products, in view of costlier labour, fuel, packaging and a weakening US dollar. According to Malaysian Rubber Glove Manufacturers Association (Margma) president Lim Kwee Shyan, “fuel and labour costs have gone up considerably. The US dollar, too, has weakened further against the ringgit by around 10% from a year ago.” In view of the higher costs of doing business, Lim said Margma has had no choice but to advise members to adjust glove pricing accordingly. (BT)

US private equity firm eyeing forest plantation project in Sarawak
A US-based private equity firm is eyeing a forest plantation project in Sarawak. Malaysian Timber Council CEO Cheah Kam Huan said should the plan go through, the investor plans to invest as much as USD200m (RM596m) to grow highly commercial timber. The investor may also like to have a local partner and get involved in the whole process from growing timber, felling, processing, manufacturing and exports. He, however, declined to reveal the identity of the private investor. (BT)

Harrisons to return RM34.25m to investors
Harrisons, a consumer goods distributor, plans to return RM34.25m to its shareholders as a special interim gross dividend, equivalent to RM0.50 a share. The dividend will go ex on 20 Sept and the entitlement date is 13 Oct. Harrisons, which also has shipping and warehousing business, had some RM114m in cash at the end of last year and debts of about RM35m. (BT)

20110902 1023 Global Market Related News.

Asian Stocks Snap Six-Day Win Streak (Source: Bloomberg)
Asian stocks snapped a six-day streak of advances ahead of reports expected to show the U.S. jobless rate remained above 9 percent, adding to signs growth in the world’s largest economy is weakening. Sony Corp., Japan’s biggest exporter of consumer electronics, declined 4.3 in Tokyo on speculation exports to the U.S. will fall. Honda Motor Co., which gets about 44 percent of its sales from North America, fell 1.8 percent. BHP Billiton Ltd., the world’s No. 1 mining company lost 1 percent in Sydney after a gauge of metal prices in London dropped. The MSCI Asia Pacific Index slipped 0.3 percent to 125.06 as of 10:02 a.m. in Tokyo, paring this week’s advance to 4 percent. About two stocks fell for each that rose on the gauge. The measure slumped 8.6 percent last month, the most since May 2010, amid concern global economic growth is slowing as Europe’s sovereign debt crisis spreads and after Standard & Poor’s cut the U.S. credit rating.

GLOBAL MARKETS - World stocks slide on poor Europe data
LONDON, Sept 1 (Reuters) - Financial markets kicked off September in a grim mood on Thursday with poor European economic data prompting a regional sell off that ended a four-day winning streak.
"The global economy is clearly going through a marked slow-down in economic activity and the market is trying to assess whether this will be just a soft patch or whether we are heading towards a recession," said Audrey Childe-Freeman, EMEA head of currency strategy at JP Morgan Private Bank.

U.S. Manufacturing Unexpectedly Expanded (Source: Bloomberg)
Manufacturing in the U.S. unexpectedly expanded in August, allaying concern the world’s largest economy is headed for another recession. The Institute for Supply Management’s factory index fell to 50.6 last month from 50.9 in July, the Tempe, Arizona-based group said today. Figures greater than 50 signal expansion. Economists projected the gauge would drop to 48.5, according to the median forecast in a Bloomberg News survey. Receding commodity prices and a recovery from setbacks related to Japan’s natural disaster have helped keep U.S. manufacturing from shrinking amid a global slowdown that’s curbing overseas demand. Another report today showed consumer sentiment declined to the second-lowest level in two years, posing a threat to the household spending that accounts for 70 percent of the economy.

U.S. Consumer Confidence Slumps With Economic Outlook in Bloomberg Index (Source: Bloomberg)
Consumer confidence declined last week as sentiment about the U.S. economy slumped to the second- lowest level in two years. The Bloomberg Consumer Comfort Index was minus 49.1 in the week to Aug. 27 compared with a minus 47 reading the previous period. The gauge dropped to a record low among the lowest- income Americans. Unemployment above 9 percent, limited wage growth and a volatile stock market are deflating consumers’ moods, posing a threat to the household spending that accounts for 70 percent of the world’s largest economy. The report showed confidence among homeowners was close to an all-time low as property values remain depressed.
“Since peaking in February earlier this year, consumer sentiment has steadily declined, mostly due to the lagged impact of rising gasoline and food prices, as well as flat wages,” said Joseph Brusuelas, a senior economist at Bloomberg LP in New York. “The decline in consumer sentiment will likely curb the appetite of consumers to continue spending at levels observed in July.”

Goldman Cuts U.S. August Payroll Forecast to a Gain of 25,000 From 50,000 (Source: Bloomberg)
Economists at Goldman Sachs Group Inc. said the slow pace of hiring recently in the U.S. led them to cut their August payroll forecast to a 25,000 gain. The new estimate is down from a prior projection of a 50,000 increase, the economists said. Their forecast for the unemployment rate was unchanged at 9.1 percent. “The main reason is the accumulation of evidence of weak hiring in late July and August,” the economists, led by Jan Hatzius, wrote in a note to clients today. “The recent pickup in layoff announcements is a concern.”
Among the reports citing weak employment figures are the Conference Board’s consumer confidence survey and its separate gauge of online help-wanted advertising for August, yesterday’s ADP Employer Services report that measures private payroll data and today’s employment component in the Institute for Supply Management’s factory index, the New York-based economists wrote.

Jobless Claims in U.S. Decline by 12,000 as Impact of Verizon Strike Wanes (Source: Bloomberg)
Applications for U.S. unemployment benefits fell last week as the influence of the strike at Verizon Communications Inc. waned. Jobless claims fell by 12,000 to 409,000 in the week ended Aug. 27, Labor Department figures showed today in Washington. Economists surveyed by Bloomberg News projected a drop to 410,000, according to the median forecast. The figure remains higher than it was three weeks earlier, before the labor dispute at Verizon pushed the numbers up. Companies like American Superconductor Corp. (AMSC) are stepping up job cuts, which may prompt consumers to pull back on the spending that accounts for about 70 percent of the economy. A report tomorrow may show employers added 70,000 workers to payrolls in August, down from 117,000 the prior month, and the jobless rate held at 9.1 percent, according to the median forecast in a Bloomberg survey.

Treasuries Hold Advance Before Reports on Nonfarm Payrolls, Unemployment (Source: Bloomberg)
Treasuries held onto gains before government reports today forecast to show U.S. companies created fewer jobs in August and the unemployment rate exceeded 9 percent for a fourth month, adding to signs of economic slowdown. U.S. government bonds are set for a weekly gain as Asian stocks followed U.S. shares lower, bolstering demand for the relative safety of debt. Two-year notes yielded 0.18 percent, or seven basis points below the upper range of the Federal Reserve’s target rate, as the central bank last month pledged to keep borrowing costs low until mid-2013. “The U.S. economy is certainly still weak,” said Khoon Goh, head of market economics and strategy at ANZ National Bank Ltd. in Wellington. “That means U.S. yields will stay low.”

U.S. Stocks Retreat Ahead of Tomorrow’s Report on Employment for August (Source: Bloomberg)
U.S. stocks retreated, snapping a four-day advance for the Standard & Poor’s 500 Index, as banks fell and investors speculated that tomorrow’s jobs report will show the world’s largest economy continues to struggle. Financial stocks dropped the most within 10 groups in the S&P 500, sliding 2.4 percent. Goldman Sachs Group Inc. (GS) slumped 3.5 percent after agreeing to pay future Federal Reserve penalties and write down $53 million of mortgage loans in New York to gain approval for its sale of Litton Loan Servicing LP. Caterpillar Inc. (CAT) and Alcoa Inc. (AA) fell at least 2.4 percent, pacing losses among companies most-tied to economic growth. The S&P 500 declined 1.2 percent to 1,204.42 at 4 p.m. in New York. The benchmark gauge rallied 5.1 percent during a four- day streak through yesterday. The Dow Jones Industrial Average lost 119.96 points, or 1 percent, to 11,493.57.

Japanese Stocks Fall, Snap 6-Day Rally, Before U.S. Employment Report (Source: Bloomberg)
Japanese stocks fell, snapping a six-day rally, ahead of a report forecast to show the U.S. added fewer jobs in August as the world’s largest economy continued to struggle. Sony Corp. (6758), Japan’s No. 1 exporter of consumer electronics, slid 4.2 percent, falling the most in the Nikkei 225 (NKY) Stock Average. Mizuho Financial Group Inc. (8411), Japan’s third-largest lender by market value, dropped 2.6 percent after bank shares dropped in the U.S. Mitsubishi Corp. (8058), Japan’s biggest trading company, slid 1.5 percent after commodity prices declined. KDDI Corp. (9433), which sells mobile devices, gained 2.1 percent after its stock rating was raised to “buy” from “hold” by Deutsche Bank Ag. The Nikkei 225 Stock Average fell 0.8 percent to 8,987.03 as of 10:02 a.m. in Tokyo. The broader Topix index declined 0.8 percent to 772.02. For the week, the Nikkei has risen 2.1 percent, set for a second weekly gain, while the Topix is up 2.1 percent.

Shadow Council Urges ECB to Cut Interest Rates to Avoid Another Recession (Source: Bloomberg)
The European Central Bank should reverse this year’s rate increases to prevent the euro-area economy from slipping back into recession, members of the so- called shadow ECB council said. A contraction in European manufacturing and plunging business and consumer confidence suggest the sharp slowdown in economic growth in the second quarter may continue in the third, they said. The ECB shadow council is a group of 15 economists and portfolio managers who watch economic developments and monetary policy in the euro region and issue recommendations each month. The Frankfurt-based ECB has raised its benchmark rate twice in 2011, taking it to 1.5 percent from 1 percent. “My recommendation is for the ECB to lower the policy rate by 50 basis points as insurance to lower the risk of outright recession re-emerging,” said Julian Callow, chief European economist at Barclays Capital in London. “The economic deterioration has become sufficiently rapid and alarming to warrant an immediate unwinding of the ECB’s rate hikes.”

U.K. Manufacturing Shrinks Most in More Than Two Years as Orders Decline (Source: Bloomberg)
U.K. manufacturing shrank the most in more than two years in August as demand from domestic and overseas customers weakened. A gauge by Markit Economics and the Chartered Institute of Purchasing and Supply fell to 49, the lowest in 26 months, from 49.4 in July, according to an e-mailed report in London today. That matched the median forecast of 27 economists in a Bloomberg News survey. A level below 50 indicates contraction. New orders fell the most in almost 2 1/2 years and employment declined for the first time in 17 months. Manufacturers said the drop in demand was due to weaker domestic and export sales and “rising global economic uncertainty.” While data today showed U.S. manufacturing unexpectedly expanded in August, figures from Europe and Asia showed a broader factory slowdown may be unfolding.

U.K. House Prices Decline Most in 10 Months Amid Slowdown, Nationwide Says (Source: Bloomberg)
U.K. house prices fell the most in 10 months in August as a slowing economic recovery threatens to undermine demand, Nationwide Building Society said. The average cost of a home dropped 0.6 percent to 165,914 pounds ($269,800) from July, the Swindon, England-based customer-owned lender said in an e-mailed report today. From a year earlier, values were down 0.4 percent. While a shortage in the supply of homes for sale and record-low Bank of England interest rates have supported prices, the housing market is struggling to gain momentum as banks restrict lending and Britons’ spending power is eroded by inflation. The British Chambers of Commerce cut its economic growth forecast today as the U.S. recovery slows, Europe’s debt crisis escalates and Britain’s government implements the biggest fiscal squeeze since World War II.

Bank of England Keeps Record-Low Rates Until August 2012 in BCC Forecast (Source: Bloomberg)
The British Chambers of Commerce cut its U.K. economic growth outlook and said the Bank of England will keep interest rates on hold until the second half of next year. The central bank will leave the rate at a record-low 0.5 percent until August 2012, when it will raise it by a quarter point, BCC Chief Economist David Kern said in an e-mailed statement today. The London-based lobby group said in May that the bank would increase the benchmark this year. The Bank of England’s Monetary Policy Committee is holding off raising interest rates as a faltering economic recovery outweighs the risk of inflation that is more than double its target. The BCC sees gross domestic product rising 1.1 percent this year and 2.1 percent in 2012, cutting a June projection for 1.3 percent and 2.2 percent respectively.

Euro Set for Biggest Weekly Slump Since July Before German Factory Orders (Source: Bloomberg)
The euro was set for the biggest weekly drop against the dollar in almost two months before a German report next week that economists say will show factory orders fell for the first time in four months. The 17-nation currency slid versus most of its 16 major counterparts in the past five days before the European Central Bank holds a policy meeting on Sept. 8. The dollar was poised for the biggest gain against the yen in a month before President Barack Obama speaks on jobs and the economy next week. “The outlook for the euro is pretty bad,” said Daisuke Karakama, a market economist in Tokyo at Mizuho Corporate Bank Ltd., a unit of Japan’s third-biggest bank by market value. “For the past six months, there’s been no good news for it. Probably there’ll be none going forward either.”

Swiss Economy Grows at Weakest Pace Since ’09 as Strong Franc Cuts Exports (Source: Bloomberg)
The Swiss economy expanded in the second quarter at the weakest pace since emerging from a 2009 slump as the franc’s appreciation sparked a drop in exports and companies cut spending. Gross domestic product rose 0.4 percent from the first quarter, when it increased 0.6 percent, the State Secretariat for Economic Affairs in Bern said today. That’s in line with the median forecast of 18 economists in a Bloomberg News survey and the worst performance since the economy returned to growth in the third quarter of 2009. Foreign sales slumped 1.3 percent from the first quarter, when they rose 3.4 percent, and investment dropped 2 percent, down from a 1.1 percent gain. Switzerland’s economy is cooling as the franc’s 8 percent ascent against the euro this year undermines exports just as global growth weakens. Manufacturing growth slowed last month, the KOF economic barometer fell and the central bank said that the economic outlook “deteriorated substantially.”

20110902 1022 Global Commodities Related News.

Commodities Decline as Speculation of Slower Growth Curbs Materials Demand (Source: Bloomberg)
Commodities slumped, paced by wheat and zinc, on speculation that slowing manufacturing will curb demand for raw materials. The Standard & Poor’s GSCI index of 24 commodities fell 0.5 percent to 671.02 at 2:31 p.m. New York time after dropping as much 0.8 percent. Zinc retreated as much as 2.9 percent in London, and wheat fell the most in two months on signs that demand for U.S. supplies is slowing. The GSCI slumped below its 200-day moving average, signaling further declines. Euro-area manufacturing contracted more than initially estimated in August while Chinese manufacturing growth stayed near a 29-month low, purchasing managers’ indexes showed. Similar gauges for Sweden, the U.K., South Korea and Taiwan all indicated contraction.

Corn (Source: CME)
US corn futures closed with steep losses as traders take profits ahead of three-day US holiday weekend. They had money to take off the table after most-active December corn reached contract highs earlier this week. The contract ended up 15% for the month, looking "way overbought," says John Kleist of CBOT December corn slides 29c to $7.38 1/2 a bushel. The exchange will close Monday for Labor Day.

Wheat (Source: CME)
US wheat futures finished sharply lower as traders book profits following strong gains last month. Traders took money off the table ahead of the three-day holiday weekend and after CBOT wheat approached a three-week high earlier this week. Prices were up since early August. Spring wheat futures at MGEX suffer milder losses due to concerns about a poor harvest. CBOT December wheat drops 30 1/2c to $7.61 a bushel; KCBT December loses 23c to $8.72 and MGEX December stumbles 14 1/2c to $9.32.

Rice (Source: CME)
US rice futures finished flat, avoiding sharp losses that hit other grain markets. Concerns about tightening global inventories underpin prices, as traders worry about government policies keeping rice at home in Thailand and India. Rice farmers are holding on to their supplies in Thailand, the world's top exporter, as they wait for the government to increase the price at which it buys the grain in November. CBOT November rice rises 2c to $17.96 1/2 per hundredweight.

US wheat down 0.8 pct, corn dips on weather outlook
SINGAPORE, Sept 1 (Reuters) - Chicago wheat lost ground, falling 0.8 percent, while corn and soy slid around half a percent as the agricultural markets took a breather on forecasts of rains in key U.S. producing regions after a strong rally last month.
"I think today's fall has to do with rain and also there is profit-taking as well after the sharp move higher," said Abah Ofon, an analyst with Standard Chartered Bank in Singapore.

Libya set to ramp up grains purchases - trade
LONDON/HAMBURG, Aug 31 (Reuters) - Libya is set to step up commercial purchases of wheat and flour in the coming weeks although western sanctions imposed on ousted leader Muammar Gaddafi and worries over port security will hinder the pace of shipments, trade and shipping sources say.
The country's interim council, trying to heal scars left by Gaddafi's 42-year rule, is keen to assert its grip and relieve hardship after six months of war. Libya was a big importer of food before fighting interrupted supply chains.

German farm ministry sees grain crop down 6 pct
HAMBURG, Sept 1 (Reuters) - Germany's 2011 grain crop of all types is likely to fall by 6 percent on the year to around 41 million tonnes, Germany's agriculture ministry said on Thursday.
German grain has suffered from a springtime drought followed by repeasted harvest-time rain, it said.

Linn Group cuts US corn yield forecast to 149.1 bpa
CHICAGO, Aug 31 (Reuters) - The Linn Group, a Chicago-based commodity research and brokerage firm, on Wednesday lowered its forecast of the 2011 U.S. corn yield to 149.1 bushels per acre, from 152.1 early this month.
The firm cut its estimate of U.S. 2011 corn production to 12.391 billion bushels, from 12.775 billion previously.The estimates fell below the U.S. Department of Agriculture's current corn yield forecast of 153.0 bushels per acre and production forecast of 12.914 billion bushels.

Relief from heat for US Midwest, Plains crops
CHICAGO, Aug 31 (Reuters) - Cooler temperatures and some light rainfall are expected from the weekend through next week in most of the U.S. Midwest and Plains crop regions, an agricultural meteorologist said on Wednesday.
"A system Friday through Sunday should bring from 0.25 to 0.75 inch to 85 percent of the Midwest and from 0.10 to 0.75 inch in the Plains with about 70 to 75 percent coverage," said Drew Lerner, meteorologist for World Weather Inc.

Ukraine grain exports at 963,000 T Aug 1-27
KIEV, Aug 31 (Reuters) - Ukraine grain exports totalled 962,800 tonnes in August 1-27 against about 1.3 million in the same month a year earlier, analyst UkrAgroConsult said on Wednesday.
The consultancy said in a statement that the volume included 511,600 tonnes of barley, which was exported mainly to Saudi Arabia and Israel, and 437,400 tonnes of wheat, exported mainly to the European Union and Syria, amongst other grains.

Ukraine trader HIB exports 300,000 T grain Jul-Aug
KIEV, Aug 31 (Reuters) - Ukraine's major grain exporter HlibinvestBud (HIB) had exported about 300,000 tonnes of grain in the first two months of the 2011/12 season covering about 30 percent of the total Ukrainian exports this period, it said on Wednesday.
HIB, which plans to export 5 million tonnes of grain this season ,also said it had bought 1.0 million tonnes of grain from local producers for the future exports.

GMO Soy Seed Sales To Argentina Approved (Source: CME)
Germany's Bayer AG has received approval for its strain of genetically modified soybeans in Argentina, clearing the way for sales to one of the world's top soy producers. Argentina approved the Liberty Link soybean technology, which involves transgenic seeds resistant to the herbicide glufosinate-ammonium, according to the company. Bayer CropScience is now moving to obtain approval for seeds with multiple transgenic traits, generally a formality in Argentina, which is one of the world's leading supporters and producers of genetically modified agricultural goods. Liberty Link will be combined with stacked traits and launched in Argentina "in the forthcoming years," the company said in a statement. Argentina is the world's leading exporter of soyoil and meal, and ranks third behind the U.S. and Brazil in soybean exports. Virtually all of Argentina's soybeans incorporate U.S. grain giant Monsanto Co.'s (MON) technology, which makes soybeans resistant to the herbicide glyphosate.
Monsanto introduced the seeds to Argentina over a decade ago, but it failed to get a patent and has struggled to collect royalties since. Monsanto is now on a push to get farmers to voluntarily sign an agreement to pay royalties in exchange for access to the company's second generation of modified soy seeds, which it says may boost yields by 10% to 15%. Meanwhile, Bayer is hoping to cash in on the spread of a host of weed varieties which have developed resistance to glyphosate, after years of repeated spraying across Argentina's farmlands. "Weed resistance is evolving rapidly, driving the need for sustainable solutions like new herbicide tolerance traits, especially in soybeans," Bayer said. "The Liberty Link trait will deliver an important and effective weed management tool as an alternative to using glyphosate herbicides in genetically modified soybeans which are currently grown on 18 million hectares in Argentina."

Ukraine Grain Export Duties Challenged (Source: CME)
Ukraine's farmers are barely making profits on their grain due to government export tariffs, the local European Business Association said Thursday in an open letter urging the removal of the duties. The EBA's Grain and Oilseeds Committee, which represents 17 of the country's largest agricultural companies, said in a letter to Prime Minister Mykola Azarov that the duties imposed this year are sapping Ukraine's export potential. "As a result of export duties enforcement product prices of Ukrainian grain on world agricultural markets increased, giving birth to the sharp decline of grain exports volume," said the EBA. "The introduction of export duties from 1 July 2011 adversely affected farmers who are actually working on the verge of loss as the domestic prices tend to fall constantly," said the EBA. Kiev imposed duties on all grain shipments in July after lifting export quotas put in place during 2010.
But traders argue the taxes mean Ukrainian wheat is no longer competitive compared with Russian produce on international markets. Ukraine's grain export fell in July to 300,000 metric tons from 1.5 million tons in June as a result of the tariffs, the deputy head of the ministry's agricultural markets department Anatoly Razgon said last week. "We support the initiative of the Ministry of Agriculture and Food policy on amending the Law of Ukraine 'On Customs Tariff' and kindly ask to cancel export duties on some crops as soon as possible," said the EBA. Local dealers also say Ukraine's farmers are currently unwilling to sell as domestic prices have been kept low by the lack of exports. "We see that if Ukraine is lifting the export tax then the interior market prices will immediately adjust," said one trader. Yet while the Ministry of Agriculture and Food is pushing to have the quotas removed, people with knowledge of the matter say the Ministry of Finance continues to block the process.
Dealers now seem increasingly concerned the duties will be kept in place until the end of 2011. The export duty on wheat is 9% and no less than EUR17 a metric tons. On barley, the duty is 14% and no less than EUR23/ton. The duty on maize is 12% and no less than EUR20/ton.

Libya Turns To Russian Grain (Source: CME)
Libya's new government is already turning to Russian grain to meet food demand despite initial concerns that Moscow's support of the former regime could hamper its exports. Traders said international merchants like France's Soufflet and Glencore International PLC (GLEN.LN) are already moving to meet the needs of the desert country, which depends on imports for nine-tenths of its food supplies. Months of violence have caused serious upheaval to Libya's import routes and the regions that supply its limited food production around the war-torn eastern port of Benghazi. United Nations agencies, including the World Food Program, have distributed hundreds of thousands of tons of food to the country to stave off a humanitarian crisis. But the private sector is now stepping up its own efforts to meet demand.
Traders said Thursday the Russian unit of commodities giant Glencore chartered two shipments of 25,000 metric tons of wheat to the North African country from the Black Sea port of Novorossiisk on Saturday. A ship broker said a vessel named the Sea Dream Bulker arrived at Benghazi port after traveling via Turkey. Glencore's Russian unit, International Grain Co., declined to comment. But a manager at a major Russian grain exporter said he expected the company to remain a major supplier to Libya in the future, even though they had previously supplied the country under the deposed regime of Col. Moammar Gadhafi. "I think Glencore have a good position either with the old government in Libya and also with the new power over there," he said. "They represent Western capital so they should be welcomed."
A person at industry association the Russian Grain Union agreed, adding that 50,000 tons of Russian wheat had made its way to Libya in July through Egyptian and Tunisian traders. "Although the rebel leaders there said they would punish the countries that had been slow in recognizing their regime, including Russia, China and Brazil, Russian wheat is still cheap and can be delivered quickly," he said. To be sure, Libya is in dire need of food supplies. Guma El-Gamaty, the U.K.-based coordinator and spokesman for the National Transitional Council, said hundreds of thousands of tons of flour, oils and other foodstuffs from Turkey are being "unloaded as we speak" to provide aid for thousands of people. Abber Etefa, spokeswoman for the WFP, said they are "acting to avert a crisis."
Andree Dufois, managing editor of grains analyst Strategie Grains, said she expects the country's wheat imports to remain broadly in line with the 1.3 million tons imported in the 2010-2011 crop year, although any disruption to the country's milling sector could switch demand to wheat flour instead of grain. Traders agreed that much of this is likely to come from Russia, which has become an increasingly important supplier to Libya and other north African countries in recent years. The release of $6 billion in frozen assets from the Gadhafi regime held in Europe's banks is also easing the passage of food exports from other parts of Europe. A person at French grain tradehouse Soufflet said the company has signed a deal to supply 60,000 tons of wheat as humanitarian aid, with the shipment due to arrive "in a few days." He declined to comment on the price but dealers said the contract could be worth around $22 million.
Shipping companies too are tentatively moving back into the country after the European Union Thursday lifted its sanctions on Libyan ports. Brokers and people nearby said aid ships were unloading in Tripoli port and shipping companies, including the world's largest container shipper by volume, Maersk Line, and CMA CGM said they will resume full services into the capital as security improves. "The Group will continue obviously to ensure a high quality of service in Libya as soon as the situation is back to normal," GMA CGM said in a statement.

Russia's Grain Snarled In Backlog (Source: CME)
Russia has halted grain cargoes snaking their way from the fields to a key port, underscoring doubts about the reliability of the country's supplies. The move comes two months after Russia lifted a ban on grain exports and gives U.S. wheat growers the chance to reclaim their edge in the global market. This week, Russia's railway authority banned further shipments of grain to the Black Sea port of Novorossiisk because a bottleneck of more than 3,500 railcars, about 40 trains, had clogged an entire branch of the network. Normally, a line of 10 trains is waiting to be unloaded. The stoppage began on Saturday. On Wednesday, local railway managers said it is likely to last another five or six days. Demand for Russia's grain has surged since the export ban expired on July 1, putting heavy pressure on the country's creaking Soviet infrastructure. Buyers have been eager to snap up cheap Russian wheat, snubbing U.S. exporters, whose grain comes with a higher price tag.
Any snag in Russian grain exports "bodes well for other exporters, including the U.S.," said Mike Krueger of Money Farm, a commodities brokerage in North Dakota. Stronger demand for wheat from the U.S. would support benchmark prices on the Chicago Board of Trade. Although U.S. wheat futures trade near three-month highs, traders say the recent intense competition in the export market has weighed. The most actively traded wheat contract, for December delivery, on Wednesday closed 0.1% higher at $7.915 a bushel on the CBOT. September wheat fell 0.7% to $7.4525. Buyers like Egypt, the world's top wheat importer, quickly returned to procuring wheat from Russia after the export ban was lifted. Egypt is now Russia's largest customer and its purchases account for the bulk of grain waiting at Novorossiisk to be loaded onto ships.
Prior to the ban, grain dealers said Russian exports were expected to reach a near-record 3 million metric tons in September, outstripping the monthly capacity of all the country's southern ports. Exporters had placed orders to deliver 500 to 600 railcars a day -- double the amount the port could handle, according to Russia's railway authority. "It has taken everybody in the industry off guard that they are so aggressively selling," said Dan Manternach, wheat analyst for Doane Advisory Services, an agricultural advisory firm. The U.S. Department of Agriculture forecasts Russia's wheat exports will more than quadruple this year to 16 million tons. Hiccups in Russia's transportation system could convince foreign buyers to shift grain purchases to the U.S., particularly if the rail jam persists longer than expected, Mr. Manternach said. The U.S. is the world's top grain exporter and stepped in last year to fill the vacuum created by Russia's export ban.

Wheat Futures Decline Most in Three Weeks in Chicago as U.S. Exports Slump (Source: Bloomberg)
Wheat futures fell the most in three weeks on signs that demand for U.S. supplies is slowing. U.S. exporters sold 369,162 metric tons of wheat in the week ended Aug. 25, trailing analyst expectations and 64 percent less than the same week last year, the Department of Agriculture said today. Prices touched a three-month high on Aug. 29. The dollar climbed to the highest in almost three weeks today against a basket of six currencies, making commodities priced in the greenback more expensive for importers. “We’ve been losing a little bit of demand as these prices have gone up,” Dewey Strickler, the president of Ag Watch Market Advisers, said by telephone from Franklin, Kentucky. “What has hurt things in the grains is the fact that the dollar is up a little. That’s probably the case today.” Wheat futures for December delivery fell 30.5 cents, or 3.9 percent, to settle at $7.61 a bushel at 1:15 p.m. on the Chicago Board of Trade, capping the biggest drop since Aug. 8.

Corn, Wheat Futures Fall Most in Two Weeks in Chicago; Soybean Prices Drop (Source: Bloomberg)
Corn and wheat fell the most in two weeks on the Chicago Board of Trade, and soybeans declined. Corn futures for December delivery dropped 8.5 cents, or 1.1 percent, to $7.59 a bushel at 9:36 a.m. in Chicago, heading for the biggest decline since Aug. 18. Wheat futures for December delivery slipped 19.25 cents, or 2.4 percent, to $7.7225 a bushel on the CBOT. A close at that price would mark the biggest drop since Aug. 18. Soybean futures for November delivery declined 11.5 cents, or 0.8 percent, to $14.46 a bushel in Chicago.

LONDON/HAMBURG, Aug 31 (Reuters) - Libya is set to step up commercial purchases of wheat and flour in the coming weeks although western sanctions imposed on ousted leader Muammar Gaddafi and worries over port security will hinder the pace of shipments, trade and shipping sources say.
The country's interim council, trying to heal scars left by Gaddafi's 42-year rule, is keen to assert its grip and relieve hardship after six months of war. Libya was a big importer of food before fighting interrupted supply chains.  

ICE coffee, sugar ease as commodities retreat
LONDON, Sept 1 (Reuters) - Arabica coffee and raw sugar futures on ICE eased in early trade, tracking a setback in a wide range of commodity markets including grains and base metals.
Arabica coffee futures were lower with the market seen technically overbought after rising for 17 straight sessions.

Brazil coffee may be at risk from La Nina dryness
BRASILIA, Aug 31 (Reuters) - Brazil's coffee belt may face more weather risks in the coming weeks if rainfall is erratic,  as some forecasters fear, during the critical flowering phase that will define next year's crop.
The forecasters have ruled out further frosts for the region. Rains due in September could be erratic with signs a drought-provoking La Nina is forming, forecasters said. That could dent next year's output as trees now have low soil moisture reserves to rely on.

Swiss trade urges action on Vietnam coffee defaults
LONDON, Aug 31 (Reuters) - The Swiss Coffee Trade Association plans to alert Swiss and Vietnamese authorities to defaults on coffee contracts by local Vietnamese exporters, which have cost the coffee industry millions of dollars, the president of the association said on Wednesday.
"We will be asking Vietnamese authorities to only allow companies that respect contractual terms to be in business," said Nicolas Tamari, president of the Swiss Coffee Trade Association and director-general of Sucafina, a Geneva-based coffee trading house.

Insecurity, lack of workers may hit Ivorian cocoa
ABIDJAN, Aug 31 (Reuters) - The scarcity of migrant workers and continued insecurity in Ivory Coast's main cocoa growing areas may hit the size and quality of the up-coming main crop harvest, farmers said on Wednesday.
The top grower's cocoa industry is usually awash with migrant workers but many fled their homes during months of post-election violence this year and have not yet returned. Many others say it is not safe to work in the fields.

Brent below $114 as Europe manufacturing slows
LONDON, Sept 1 (Reuters) - Brent crude fell below $114 a barrel on Thursday as European data showed a sharp slowdown in manufacturing, raising fears of slower economic growth and a decline in fuel demand.
"The main thing putting pressure on oil this morning is the really bad PMI (Purchasing Managers' Index) readings in Europe," Olivier Jakob from Petromatrix said. "We have an contraction overall in Europe in the PMIs; this is confirmation that the economy is slowing down."

Crude Oil Erases Decline as Tropical Depression Forms in Gulf of Mexico (Source: Bloomberg)
Oil erased its decline in New York after a tropical depression formed in the Gulf of Mexico, shutting production platforms. Crude for October delivery was unchanged at $88.93 a barrel in electronic trading on the New York Mercantile Exchange after earlier falling as much as 31 cents. The contract yesterday climbed 12 cents to settle at the highest level in four weeks as the weather system developed. The tropical depression has shut nearly 6 percent of the region’s oil output and could approach the southern coast of Louisiana this weekend, according to the National Hurricane Center. The system, about 225 miles (360 kilometers) southwest of the Mississippi River mouth, is traveling northwest at 6 miles per hour and may strengthen into a tropical storm before reaching Louisiana’s coast Sept. 3, the Miami-based center said in an advisory issued before 8 p.m. East Coast time.

Russia, China to discuss oil debt -Transneft source
MOSCOW, Sept 1 (Reuters) - Russia and China are set for new talks over disputed debt for Russian oil as Moscow struggles to secure lucrative gas contracts with the world's top energy user, a source at Russia's Transneft  told Reuters on Thursday.
Russian oil pipeline monopoly Transneft and Russia's top crude producer Rosneft  started pumping oil to China in January via the first stage of the East Siberian-Pacific Ocean (ESPO) pipeline after receiving $25 billion in loans from Beijing.

Oil floating storage off Malaysia given reprieve on eviction
SINGAPORE, Sept 1 (Reuters) - Seven floating oil storage facilities offshore Southern Malaysia have been given a two-week reprieve from eviction as required  by a government notice that expired a day ago, industry sources said on Thursday.    
The reprieve for the converted Very Large Crude Carriers (VLCCs), which have a capacity to hold up to about 1.9 million tonnes of crude and fuel oil, off Pasir Gudang port could be extended to a month, as had been requested by the owners of the facilities, they added.

Global miners seen keeping iron ore prices steady in Q4
MANILA, Sept 1 (Reuters) - Global miners will keep iron ore contract prices mostly steady in the fourth quarter with spot prices stabilising on firm Chinese demand and tight supplies, Reuters calculations showed.
Based on Platts index prices  for June to August, which top iron ore miners like Vale  and Rio Tinto   use in fixing fourth-quarter contract prices, the 62-percent grade averaged $175.63 a tonne, cost and freight, down marginally from $176.96 in March-May.

Iron ore emerging as Asia's industrial demand gauge
SINGAPORE, Aug 31 (Reuters) - Iron ore could soon become a leading economic indicator in emerging markets such as China, since the absence of speculative froth makes the sandy steelmaking raw material a better gauge of demand than industrial metals like copper.
With the uses of steel nearly as diverse as copper, from manufacturing to construction and power, the volume of iron ore consumed by developing economies shows whether their industrial expansion is on track or if they are curbing fixed-asset investment amid weakness in key export markets in the West.

BarCap buys stake in metals warehouse firm
LONDON, Aug 31 (Reuters) - Commodities heavyweight Barclays Capital has bought a stake in a small metals warehouse, a source said, as the bank scrambles to catch up with rivals by securing a foothold in the profitable storage business.
The UK bank, a major player among commodity investors but not as large in the physical markets, has bought into UK-based Erus Metals Ltd, a little-known metals firm seeking approval to join the network of warehouses monitored by the London Metal Exchange's (LME), a source with knowledge of the matter told Reuters.

Chile Collahuasi sees copper output 500,000 T 2011
SANTIAGO, Aug 31 (Reuters) - Chile's giant Collahuasi copper mine expects to produce around 500,000 tonnes of copper this year, with output stabilizing around 600,000 tonnes in coming years as it seeks to implement an expansion plan, the operator's chief executive said on Wednesday.
Collahuasi, the world's No.3 copper mine and jointly owned by global miners Xstrata  and Anglo American ,, produced 504,000 tonnes of copper in 2010, when output was hit by a month-long strike. The mine accounts for around 3 percent of global mined copper output.

Copper Little Changed at $9,136 a Ton After Slumping on Weak China Orders (Source: Bloomberg)
Copper in London traded little changed at $9,136 a metric ton after declining yesterday for the first time in seven days after export orders slid in China, the world’s biggest consumer of the metal.

METALS-LME copper down; China export orders fall weighs
SHANGHAI, Sept 1 (Reuters) - LME copper fell 0.7 percent on Thursday, weighed down by a fall in China's export orders and wider concerns about the global economy ahead of Friday's key U.S. employment data.
But supply disruption threats and the possibility of further quantitative easing in the United States may limit losses.    

PRECIOUS-Gold steady after U.S. data; eyes on Fed
SINGAPORE, Sept 1 (Reuters) - Spot gold held steady on Thursday, as investors weighed the possibility of further easing moves by the U.S. Federal Reserve after better-than-expected manufacturing and labour market data.
After recent data showed plunging consumer confidence, Thursday's batch of numbers suggested a strong rebound in demand for manufactured goods in July and increasing hiring from private employers, easing fears the economy would slip back into recession.

Gold Futures Drop After U.S. Manufacturing Unexpectedly Expands (Source: Bloomberg)
Gold fell for the first time in three days after a report showing unexpected growth in U.S. manufacturing bolstered optimism in the economy and eroded demand for the precious metal as a haven asset. The Institute for Supply Management reported its factory index was at 50.6 last month, topping analyst estimates’ of 48.5. Prices also fell as the dollar headed for the biggest gain in two weeks against a six-currency index. Prices touched a record $1,917.90 an ounce on Aug. 23 amid escalating debt woes in the U.S. and Europe. “The manufacturing data is putting some pressure on gold, and a stronger dollar is not helping matters,” David Meger, the director of metal trading at Vision Financial Markets in Chicago, said in a telephone interview. “We will probably see some consolidation at current levels.”

20110902 1020 Soy Oil & Palm Oil Related News.

ITS CPO export down 0.6% to 1,622,731 tonnes for the period of 1~31 Aug 2011.
SGS CPO export down 0.5% to 1,620,408 tonnes for the period of 1~31 Aug 2011.

Soybeans (Source: CME)
US soybean futures ended lower, succumbing to pressure from profit-taking. Absence of fresh supportive news to extend the recent rally, and no confirmation that yields and production are worse than what traders have already factored into prices, encouraged traders to reduce some risk exposure, analysts say. Many traders were content to trim risk heading toward long holiday weekend, banking some profit while looking to reassess crop potential after the weekend, analysts add. CBOT Nov soybeans end down 23c or 1.6% at $14.34 1/2/bushel.

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

China soy crushing picks up this week-CNGOIC
BEIJING, Sept 1 (Reuters) - China's soybean crushing this week is likely to show an increase following the recovery of soy meal  and soy oil  prices, which have given positive margins for some crushers for the first time this year, said an official think-tank on Thursday.
Plants are likely to crush more than 1.3 million tonnes of soy this week, up from 1.1 million tonnes last week, said the China National Grain and Oils Information Centre (CNGOIC0) (

Argentina July soy crushing falls 9.4 pct year/year
BUENOS AIRES, Aug 30 (Reuters) - Argentine soy crushing fell 9.4 percent year-on-year in July to 3.2 million tonnes, following a record 2009/10 crop and a smaller 2010/11 harvest, the government said in its latest crushing report.
Argentina is the world's largest supplier of soyoil and soymeal and the No. 3 exporter of the unprocessed oilseed.