Monday, September 5, 2011

20110902 1805 FCPO EOD Daily Chart Study.

FCPO closed : 3018, changed : -32 points, volume : lower.
Bollinger band reading : side way range bound little downside biased.
MACD Histrogram : rising, buyer testing market.
Support : 2970, 2930, 2900, 2850 level.
Resistance : 3020, 3050, 3070, 3100 level.
Comment :
FCPO closed recorded loss with quiet volume transacted while last Friday soy oil closed slightly higher and closed for today due to Labour day holidays while crude oil trading lower.
Fear of smaller soybean crop lead soy oil to move higher but however gain was limited after dissapointing jobless data reported lead financial market and crude oil to head south.
Daily chart formed a down doji bar candle closed near middle Bollinger band level after market opened little lower, edge upwards tested above resistance level and slide lower tested below support level before recovered slightly to clos near the low of the day.
Technical reading still 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.

20110905 1740 FKLI EOD Daily Chart Study.

FKLI closed : 1456, changed : -7 points, volume : lower.
Bollinger band reading : correction range bound downside biased.
MACD Histrogram : recovering, seller taking profit.
Support : 1445, 1425, 1405, 1395 level.
Resistance : 1458, 1470, 1485, 1500 level.
Comment :
FKLI closed recorded loss with slower volume changed hand doing 7 points discount compare to cash market that also closed lower. Last Friday U.S. market closed lower and Asia markets ended mostly in negative zone while European markets currently trading lower.
Disappointing non farm payroll data rise fears of renewed recession in the U.S. and sustained worries about the Euro zone debt crisis lead global markets to trade in negative sentiment.
Daily chart formed a small up doji bar candle positioned in between middle and lower Bollinger band level after market opened lower and traded side way within 7.5 points range bound market to closed near opening price.
Chart reading remained suggesting a correction range bound downside biased market development testing support and resistance level.
When to buy : buy at support or weakness with quick cut loss and profit target.
When to sell : sell at resistance or strength with quick cut loss and profit target.

20110905 1738 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.

20110905 1611 Global Market & Commodities Related News.

GLOBAL MARKETS-Asia stocks, euro fall on U.S. growth gloom
SINGAPORE, Sept 5 (Reuters) - Asian stocks fell and the euro slipped to a three-week low against the dollar as fears of renewed recession in the United States and sustained worries about the euro zone debt crisis prompted investors to sell riskier assets.
"In this atmosphere, foreign investors are likely to remain risk-averse and inactive," said Mitsushige Akino, chief fund manager at Ichiyoshi Investment Management Co in Tokyo.

GLOBAL MARKETS-Asia stocks, euro fall as U.S. job growth stalls
HONG KONG, Sept 5 (Reuters) - Asian stocks fell and the euro slipped to a fresh three-week low against the dollar on Monday as disappointing U.S. jobs data and sustained worries about the euro zone debt crisis prompted investors to sell riskier assets.
"Concerns about high debt in Europe has resurfaced, and those poor payrolls results certainly got people worried about the U.S. economy and the global economy as well, that's seen pressure on the euro and Aussie. I think that'll continue for the first half of the week," said Joseph Capurso, strategist at Commonwealth Bank in Sydney.

Canada wheat, canola stocks shrink - trade
WINNIPEG, Manitoba, Sept 2 (Reuters) - Canada's stocks of wheat and canola shrank to multi-year lows as of July 31, the result of last year's disappointing harvest and steady demand, according to 14 traders and analysts whom Reuters surveyed.
Statistics Canada will release on Sept. 7 its estimates of crop stocks as of July 31, which is the end of the 2010/11 marketing year.

China sugar deficit seen at 2.3 mln T in 2011/12
BEIJING/SINGAPORE, Sept 2 (Reuters) - China's sugar demand could outpace output by more than 2 million tonnes in the year to September 2012 after a prolonged drought hit the growing region, triggered a supply shortage and forced Beijing to release stocks to cool record high prices.  
China's appetite may ease worries about a global surplus in the new crop year starting in October as the country rebuilds inventory after selling 1.68 million tonnes of sugar from state reserves, according to a median forecast of 10 dealers and analysts.

Rice rally losing steam on plentiful supply
SINGAPORE, Sept 2 (Reuters) - Ample global rice stocks and buyers' reluctance to wade into a market many see as overpriced will put the brakes on a rally that saw the staple at 1-1/2 year highs this week and raised concerns about food inflation in Asia.
Speculation over aggressive intervention by the new government in Thailand, the world's biggest exporter, has pushed the benchmark white rice  to $615 a tonne, the highest since December 2009, even though demand has remained thin with top importers largely covered.

Global meeting to push for India sugar reforms
NEW DELHI, Sept 2 (Reuters) - Reform of India's tightly controlled sugar sector will top the agenda of an international conference kicking off on Sept. 5, as traders and analysts call for changes to allow the country to become a regular exporter, competing with top producer Brazil.
The New Delhi government, keen to ensure cheap availability of the sweetener and to restrain high food inflation, currently sets the price mills must pay to farmers and buys 20 percent of their output at a big discount for its welfare schemes.

Dry weather starts to hamper Argentine wheat-gov't
BUENOS AIRES, Sept 2 (Reuters) - The wheat crop in parts of Argentina's top producing province is starting to show the impact of dry and chilly weather in recent weeks, the Agriculture Ministry said on Friday in a weekly report.
Argentina, a leading global wheat exporter, has yet to forecast 2011/12 output, but the U.S. Department of Agriculture (USDA) sees production dipping to 13.5 million tonnes from 15 million last season.

EU to propose end of sugar quotas from 2016 -sources
BRUSSELS, Sept 2 (Reuters) - The European Union's executive will propose abolishing the bloc's system of sugar production quotas and guaranteed minimum prices from 2016, two EU sources with knowledge of the plans said on Friday.
Under proposals due to be published next month, the current quota system, which runs until 2015, will be extended until 30 Sept. 2016 "to allow for a reasonable period of adjustment for operators in the sector", said one source, speaking on condition of anonymity.

Share of milling wheat in Ukraine crop at 40-45 pct
KIEV, Sept 2 (Reuters) - The share of milling wheat in Ukraine's 2011 wheat harvest as at between 40 and 45 percent, down from the last year 55 percent, analyst UkrAgroConsult said in a report.
Ukraine's Farm Ministry last month said the share of milling wheat had reached 70 percent as of Aug 18 compared to about 60 percent a month earlier. The ministry gave no explanation for the change in the grain quality.

Sugar crop in key India state seen at record despite rains
MUMBAI, Sept 2 (Reuters) - Recent heavy rainfall in India's top sugar producing Maharashtra state will not hurt the cane crop, which is still expected to yield a record 9.3 million tonnes of sugar, a senior state government official said on Friday.
"Rainfall at this stage is beneficial for the crop's vegetative growth. We are expecting better cane yields," Anil Bansode, joint director at the state's sugar commissioner's office, told Reuters on Friday.

CNOOC says oil field suspension to hurt output
HONG KONG, Sept 5 (Reuters) - China's top offshore oil and gas producer, CNOOC Ltd , said its net production would be reduced by about 40,000 barrels per day due to the government-ordered suspension of operations at the entire PL19-3 oil field.
In a filing with the Hong Kong exchange late on Sunday, CNOOC said its net production had been reduced by about 22,000 barrels per day since the suspension of operations of Platforms B and C of PL19-3 oil field on July 13. A suspension of the entire oil field will further reduce output, it said.

Kuwait oil output above 2.8 mln bpd in Aug -minister
DUBAI, Sept 4 (Reuters) - Kuwait pumped more than 2.8 million barrels per day (bpd) of oil throughout August, state news agency KUNA on Sunday reported oil minister Mohammad al-Busairi as saying, the highest level since the global economic downturn in late 2008.
Kuwait has not produced over 2.80 million bpd since its output peaked at 2.85 million bpd in September 2008, according to official data provided by the Joint Data Initiative (JODI), just before oil demand dipped in the global economic crisis.

Iran says India paid all $5 bln oil debt
TEHRAN, Sept 4 (Reuters) - India has paid off all oil debts accumulated this year due to a sanctions-related problem, Central Bank Governor Mahmoud Bahmani told the official IRNA news agency on Sunday.
"Although all the $5 billion of India's oil debt has been cleared, because of selling oil again Iran will always be a creditor of that country," Bahmani said, adding the payment was received in cash and not in kind through a bartering system.

Russia 2011 oil production seen above 500 mln tonnes
MOSCOW, Sept 3 (Reuters) - Russia will produce more than 500 million tonnes of oil in 2011, while also steering its coal industry towards developing Eastern world rather than "stagnating" West, Energy Minister Sergei Shmatko said on Saturday.
"This year we will likely beat (2010 results) as in the first half of this year we have produced around 350 million tonnes," Shmatko told Russia 24 TV channel in an interview.

Brent falls below $112 on U.S. recession fears
SINGAPORE, Sept 5 (Reuters) - Brent crude fell below $112 a barrel, as fears of another U.S. recession slowing fuel demand overshadowed supply concerns over a major shutdown of offshore oil production forced by Tropical Storm Lee.  
"The macro situation is leading to fears of a double-dip recession. And there has been a recent trend of selling into strength when the market hits a soft patch," said Chen Xin Yi, a commodities analyst at Barclays Capital in Singapore.

CNOOC says oil field suspension to hurt output
HONG KONG, Sept 5 (Reuters) - China's top offshore oil and gas producer, CNOOC Ltd , said its net production would be reduced by about 40,000 barrels per day due to the government-ordered suspension of operations at the entire PL19-3 oil field.
In a filing with the Hong Kong exchange late on Sunday, CNOOC said its net production had been reduced by about 22,000 barrels per day since the suspension of operations of Platforms B and C of PL19-3 oil field on July 13.

Oil falls as U.S. job growth stalls
NEW YORK, Sept 2 (Reuters) - Oil fell on Friday as stalled U.S. job growth in August rekindled worries of another will be recession, which would slow fuel demand.
"The (jobs) data reinforces our concern that the U.S. economy has stalled, and we think there is a 60 percent chance it will fall into recession by the end of the year or at the start of next year," said Rachel Ziemba at Roubini Global Economics in London.

EU targets Syrian oil firms, says may get tougher
SOPOT, Poland, Sept 3 (Reuters) - The European Union imposed a ban on purchases of Syrian oil on Saturday and warned of further steps unless President Bashar al-Assad's government ends its five-month crackdown on dissent.
The sanctions mark the first time Europe has targeted Syrian industry in a bid to stem the violence, which claimed another four lives on Saturday and has so far killed more than 2,200 people, according to the United Nations.

NYMEX-Natural gas ends down 4 pct ahead of holiday weekend
NEW YORK, Sept 2 (Reuters) - U.S. natural gas futures ended down sharply on Friday, as comfortable supplies, a weak economy and forecasts for milder weather trumped concerns about a Gulf Coast storm ahead of a long holiday weekend.
"There's cooler weather coming, and the latest forecasts for the storm (Lee) indicate it's not going to be a hurricane, and it should be over before the end of the weekend," said Steve Mosley at SMC Advisory Services in Arkansas.

Euro Coal-Prices rise slightly, only one buyer seen
LONDON, Sept 2 (Reuters) - European prompt physical coal prices rose by around $1.00 on Friday on buying by one major utility.
"There's been only one buyer in the European market but plenty of sellers of prompt ARA cargoes," one major European utility said.

COMMODITIES-Gold up, oil down as US data feeds economic fears
NEW YORK, Sept 2 (Reuters) - Gold rose and industrial commodities fell on Friday after U.S. data showed job growth ground to a halt in August, feeding fear that the world's largest economy could fall into recession without stimulus.
"The data reinforces our concern that the U.S. economy has stalled and we think there is a 60 percent chance it will fall into recession, by the end of the year or at the start of next year," said Rachel Ziemba, senior analyst at Roubini Global Economics in London. "We think QE3 is coming."

METALS-Copper steady on hopes of QE3, dip buying
SHANGHAI, Sept 5 (Reuters) - Copper prices steadied, edging up 0.2 percent in early trade, as gloomy U.S. August non-farm payroll data raised hopes of further quantitative easing measures by the Federal Reserve.
Three-month copper on the London Metal Exchange  lifted to $9,093 a tonne by 0110 GMT, after falling 0.8 percent on Friday.

PRECIOUS-Gold edges lower; growth worry supports
SINGAPORE, Sept 5 (Reuters) - Spot gold edged lower, retaining most of its gains from the previous session, as a dismal growth outlook after the U.S. jobs data supported safe-haven interest in bullion.
"Even if you take out the effect from the Verizon strike, it is still a lousy number and people are concerned that growth is not there any more," said Dominic Schnider, head of commodity research of UBS Wealth Management in Singapore.

Ghana H1 2011 gold output up 3 pct-chamber of mines
ACCRA, Sept 2 (Reuters) - Ghana's gold production rose 3 percent in the first half of 2011 to 1,497,023 ounces from 1,455,234 ounces a year ago, the West African nation's chamber of mines said on Friday.
Revenues during the same period jumped 31 percent to $2.2 billion from $1.68 billion.

20110905 1606 Local & Global Economic Related News.

Rubber and oil palm smallholders across the country will benefit from the move to  provide fertilizer under the soon to be launched  “Baja Negara” programme later this  month. It is aimed at helping smallholders produce  quality commodities, Rural and  Regional Development Minister Datuk Seri Mohd Shafie Apdal said. As an encouragement,  smallholders were given RM9,000 in Peninsular Malaysia and RM4,000 in Sabah and  Sarawak to replant rubber on their land, said Shafie. (The Star)  

Human Resources Minister  Datuk Dr S. Subramaniam has asked the Indonesian  Embassy to convey whatever suggestion it has on the Government’s move to allow direct  maid recruitment to the Joint Task Force which was set up on the matter. He was  responding to a comment by the Indonesian Embassy head of information, social and  cultural affairs Suryana Sastradiredja on the move to allow the hiring of maids without  going through agencies.  
• Suryana said the move opened up loopholes for human trafficking and also violated  Indonesian regulations.
• Suryana also noted that the embassy had received many complaints from directlyrecruited maids, who had run away from their employers for alleged mistreatment and  non-payment of salaries. (The Star)

U.S. industry-wide car sales rose 7.5% yoy to an annual rate of 12.1m in Aug (12.2m in  Jul). Economists expected a reading of 11.95m. (CNNMoney, Bloomberg)  

Jobs woes sink Wall Street
The Dow Jones Industrial Average was down 253.16 points or 2.2% on Friday, 2 Sept after data showing zero jobs growth in August brought investors face-to-face with the prospect of another recession. The declines left Wall Street lower for the sixth week out of seven as declining issues far outweighed winners on a light-volume day ahead of the long US Labor Day holiday weekend. Stocks had rebounded recently on expectations the Federal Reserve would introduce new stimulus to boost the sluggish economy. But the Labor Department's latest report underscores that action by the Fed alone cannot address the economy's deep problems. (Financial Daily)

The  U.S. jobless rate held at 9.1% in Aug. The reading matched economists’  expectations. (Bloomberg)

U.S. nonfarm payrolls were unchanged (0) in Aug (+85,000 in Jul), the U.S. Labor  Department said. Economists had expected a reading of 95,000. Payrolls had gained in  each of the 10 previous months.  
• Health care employment rose by 30,000 in Aug. Employment in  mining continued to  trend up in Aug (+6,000). Within  professional and business services, computer  systems design and related services added 8,000 jobs in Aug. Employment in the  information industry declined by 48,000 in Aug. Elsewhere in the private sector,  employment in construction; trade, transportation,  and utilities; financial activities; and  leisure and hospitality changed little over the month.
• Manufacturing employment was essentially unchanged in August (-3,000).
• Government employment continued to trend down over the month  (-17,000).  (Bloomberg)  

U.S. average hourly earnings for all employees on private nonfarm payrolls decreased by  3 cents, or 0.1%, to US$23.09 in Aug. This decline followed an 11-cent gain in Jul.  Economists expected a rise of 0.2%. (Bloomberg)  

A newly-formed congressional panel on deficit reduction will kick off months of arduous  negotiations that will be closely watched by financial markets hoping for a deal that puts  the  United States  on an improved fiscal path. The opening meeting of  the bipartisan  "super committee" will be held on 8 Sep, the co-chairs announced.  
• It will convene just hours before President Barack Obama unveils his latest jobs-creation  initiative to a joint session  of Congress. That initiative and the super committee's work  are both aimed at healing a U.S. economy that has been struggling to grow after a deep  recession which began at the end of 2007. (Reuters)  

A measure of  future U.S. economic growth  slipped in  the latest week, while the  annualized growth rate tumbled to its lowest level since Nov, a research group said. The  Economic Cycle Research Institute said its Weekly Leading Index eased to 122.5 in the  week ended 26 Aug from 122.7 the previous week. That was originally reported as 122.8.  The index's annualized growth rate fell to -4.3% from -2.1%, hitting its lowest level since  early Nov 10. (Reuters)  

Eurozone industrial producer prices index (PPI) picked up by 0.5% mom in Jul (0.0% in  Jun), according to a report published by Eurostat. On a yoy basis, the PPI for the eurozone  rose 6.1% in Jul (5.9% in Jun). Economists expected PPI to post 0.5% mom and 6.2% yoy  in Jul. (Xinhua, Eurostat)  

Japanese capital spending fell 7.8% yoy in 2Q (+3.0% in 1Q), as the strong yen and  slowing global demand weigh on the economy's recovery from the Mar earthquake and  tsunami. Economists expected a 1.2% rise. (Reuters)  

Japan: Eighth Japan Finance Chief Since 2008 Signals Eroding Influence
Japan’s revolving-door politics may be diminishing the nation’s global influence after Jun Azumi was appointed the eighth finance minister since 2008. Azumi, 49, was named in Tokyo last Thursday to replace Yoshihiko Noda, who became prime minister, the sixth person to have that job in five years. Already eclipsed by China last year as the world’s second- biggest economy, Japan may be impeded at international forums such as the G-7 and Group of 20 nations by the lack of continuity in its representatives. (Bloomberg)

China: ‘Hot Money’ concerns mount as yield premium jumps
Chinese government bonds’ yield advantage over US Treasuries increased in August by the most since November 2008, raising concern among officials that inflows of speculative funds will pick up. An appreciating yuan and relatively high asset returns encourage global investors to seek ways to circumvent China’s capital controls and deter overseas companies from repatriating profits, complicating efforts to tame the fastest inflation in three years. The State Administration of Foreign Exchange said last month the nation may face “relatively large” capital inflow pressure in the second half. (Bloomberg)

China’s  purchasing managers’ index dipped to 57.6 in Aug (59.6 in Jul), the China  Federation of  Logistics and Purchasing said. A reading above 50 indicates expansion.  (Bloomberg)  

China will tighten rules on  subsidies for energy-saving vehicles made by local  automakers, according to a government official. Cars will qualify for a subsidy if they have  an average fuel consumption of 6.3 liters of gasoline or lower per 100km, Xiang Dihai, a  director at the department of Economic Construction at the Ministry of Finance, said. The  current threshhold is 6.9 liters per 100km. (Bloomberg)  

Standard & Poor’s Managing Director of European Sovereign Ratings  Moritz Kraemer  said the rating of a common euroarea bond would reflect that of the “weakest” country if  jointly guaranteed. “If it is a joint and not a several guarantee, then it would be the weakest  link approach,” Kraemer said, adding that “it depends  on how the euro bond would be  structured.” (Bloomberg)

India: Manufacturing expands at slowest pace in 29 months
India’s manufacturing grew at the slowest pace in 29 months in August, adding to signs of a global slowdown and indicating interest-rate increases are curbing consumer demand. Factory output has slumped in Asia and Europe as the global recovery falters, leaving emerging markets facing the twin threats of elevated price gains and slowing economic growth. India’s inflation has exceeded 9% for eight straight months, weathering 11 rate increases since mid-March 2010 even as higher borrowing costs crimp domestic spending. (Bloomberg)

20110905 1605 Malaysia Corporate Related News.

DiGi.Com Bhd : Additional spectrum to boost DiGi coverage
DiGi.Com Bhd, among nine companies vying for a block of the 2.6GHz next generation spectrum, said having more spectrum would help it improve coverage quality to subscribers in both urban and rural areas. Its head of strategy and business transformation, Christian Thrane, said that getting the long-term evolution (LTE) spectrum would allow them to deliver higher speeds for customers in urban areas who would move into 4G and free up currently used spectra. DiGi is in the process of modernising its network with LTE-ready equipment so that rollout can be swift once the spectrum is available. Thrane said DiGi would be able to tap the experience of its parent, the Telenor Group, in rolling out LTE in Malaysia if the company is awarded the spectrum. He added that they have launched the LTE high-speed broadband in Sweden and Norway and hope to deliver LTE in Malaysia by end 2012. Telenor owns 49.0% of DiGi, which has a base of 9.4 million subscribers, some 56.0% or 5.3 million of which use mobile Internet on a monthly basis. – The Edge

Bandar Raya Developments Bhd Goes : mid-range with Verdana
Bandar Raya Developments Bhd (BRDB) expects its RM800.0mil Verdana project at north of Mont’ Kiara to set a benchmark in lifestyle development in the mid-range residential segment in Kuala Lumpur. Verdana is an extension of BRDB’s brand of cosmopolitan lifestyle developments and is the company’s first foray into the midrange segment. BRDB, which has been developing land in Bangsar for 45 years and luxury apartments, is expanding its wings to build products of a different price range. BRDB chief marketing officer KC Chong said that they are now looking to build properties within the affordable price range, yet offering the lifestyle that we have been providing in all our other developments. Verdana will be developed in two phases over 4.4ha. The first phase comprises two 25-storey towers and a six-storey block with 298 units. It is priced at an average RM580 per sq ft with unit sizes ranging from 1,450 sq ft to 3,020 sq ft. – Business Times

Everest Group aims to list on Bursa by 2015
Fast-growing local courier and logistics entity, Everest Group of Companies, aims to list on Bursa Malaysia by 2015. Group managing director M. Andy said the company, with an annual turnover of about RM4.0m, was already there but did not want to rush into listing. “Listing on Bursa Malaysia is one way for Everest to go global and tap into opportunities which arise in line with our core business. “There are records of many companies that went for listing in a rush and later ended up in failure, instead of success,” he told Bernama.(StarBiz)

EPF steps up accumulation of AirAsia shares
The Employees Provident Fund (EPF) Board continued to raise its stake in AirAsia, with the latest acquisitions involving nearly 10m shares. A filing with Bursa Malaysia showed the EPF bought 4.3m shares on 25 Aug and 5.7m shares the next day. The latest acquisitions saw the EPF increasing its shareholding to 346.0m shares or 12.5%. (Financial Daily)

In an interview with the Edge, Halim Alamsyah, Deputy Governor in charge of bank  supervision at Bank Indonesia, said that the possibility of  a ceiling on ownership in  Indonesian banks is part of an overall policy review to enhance governance in Indonesian  banks. It is not aimed at Malaysian and Singaporean  shareholders or intended to be a  demand for more flexibility for Indonesian banks to operate in these two countries. CIMB  Group and Maybank own close to 100% of two of Indonesia’s top 10 banks, CIMB Niaga  and Bank Internasional Indonesia (BII).  
• He said that should the ceiling be eventually imposed, shareholders would be given a  long enough transition period to divest their stakes.
• On 11 Aug, Indonesia’s central bank said that it was temporarily freezing approvals for  new mergers and acquisitions in the sector, pending a decision on the shareholding  caps. But according to Halim, it is not true that they have stopped the process of  acquisition of banks. (Edge)

RHB Banking Group has withdrawn its applications to Bank Negara Malaysia to seek the  appointment of Renzo Viegas as MD of RHB Bank. This is because the group is  undergoing an internal reorganisation as part of the group’s efforts to enhance its  competitiveness. (The Edge)    

Sime Darby has defended the seemingly high price it is paying for its proposed acquisition  of a 30% stake in Eastern & Oriental Bhd (E&O) on the grounds that it had acted quickly  on an opportunity that presented itself and one that has good long-term prospects.
• “The E&O block has been on the market for a while and several parties were still looking  at the deal. Sime Darby acted on an opportunity and did so fast,” Sime Darby said in an  email response.
• Sime Darby also said the E&O acquisition did not only bring with it “land bank on Penang  island where land is scarce, but also a level of unique talent, branding, and experience  and expertise in a niche premium development.”
• When asked why Sime Darby did not consider just doing a joint venture with E&O rather  than buying the 30% stake, to achieve the same results, its reply was: “We judged this to  be the most propitious means of securing the most strategic value for Sime Darby.  Acquiring 30% creates a more permanent relationship.”
• Sime Darby also said that E&O's Tham “has stated that he will stay (at E&O) for at least  another three years. (Starbiz)  

Sime Darby Healthcare expects both its soon-to-open hospitals will post profit after tax  within three to five years. The group will open the 220-bed Sime Darby Medical Centre Ara  Damansara in the next quarter while the 300-bed Sime Darby Medical Centre ParkCity will  start seeing patients in early 2013.
• MD of the healthcare group Raja Azlan Shah Raja Azwa said that for a start, the hospital  in Ara Damansara will operate 73 beds while the ParkCity hospital will start with 70 beds.  Both hospitals will reach full capacity within five years from the openings. (BT)    

The price of  oil palm seeds, now at RM1.85 each, will be raised by 30% to RM2.35  starting Jan 2012. BT also understands that the higher grade semi-clonal seeds will be  priced 45% more at RM2.70. "Over the years, we have invested heavily in oil palm  breeding. This has enabled us to improve the seeds for higher yields. Most of the major  seed producers in the country have also made similar price increases for 2012.  
• It has been RM1.85 per seed since 2007," said Applied Agricultural Resources Sdn  Bhd's (AAR) director of research Dr Kee Khan Kiang. AAR, which advises more than  350,000ha of oil palm and rubber estates in Malaysia and Indonesia, is an associate  company of Boustead Holdings Bhd and Kuala Lumpur Kepong Bhd.  
• Since 1986, AAR has been one of the 10 licensed seed producers in the country,  contributing to the replanting of unproductive trees so as to raise the national oil palm  yield. According to Malaysian Palm Oil Board, some 40m germinated seeds have  already been planted by farmers in the first seven  months of this year. Most of the  replanting of old trees have been carried out in Sabah and Peninsular Malaysia while  new plantings are undertaken in Sarawak.  
• For this year, Kee said, AAR is hoping to sell 8.5m oil palm seeds this year, having sold  7.2m last year."We already have confirmed bookings  for 8.6m seeds in hand with  deposits paid. Orders are still pouring in, but unfortunately, we cannot meet the demand  for this year," he said.(BT)  

Any new public listing of  Felda Global Group’s  units would not involve its settlers’ land  while the group would maintain a controlling interest of at least 51% post-listing, according  to its president Datuk Sabri Ahmad.
• On its successful business model of its maiden IPO of MSM Malaysia, Felda will  generally carbon copy the whole structure of MSM for future listing of its units.  (Malaysian Reserve)

The implementation of the heavy industrial park at Bagan Datoh, Perak will be undertaken  according to the terms of an agreement signed between Perbadanan Kemajuan Negeri  Perak (PKNP) and PEIH Holdings Sdn Bhd of which KYM Holdings Bhd will have a  37.5% interest.
• This agreement started off from a memorandum of understanding (MoU) entered on Dec  1, 2010 between KYM Development (Perak) Sdn Bhd, an indirect wholly owned  subsidiary company of KYM and PKNP.  
• KYM Perak and PKNP were to jointly evaluate the feasibility of the project. The MoU  expired on Wednesday. The project involves the reclamation of 3,400 acres and  construction of the infrastructure, including jetties. (Starbiz)    

AirAsia Philippines may start flights to Singapore, Hong Kong and Macau by the end of  next month once it gets regulatory approval. The unit targets to bolster its fleet to seven  planes by the end of 2012 and up to 16 jets in five years. (Bloomberg)  

Berjaya Corp  said the sale of its 50% stake in  Starbucks Coffee to  Berjaya Food at  RM71.698m or 13.5x P/E was based on Starbuck’s net profit of RM10.62m as at financial  year ended 30 Apr, 2011 and its potential for growth. Starbucks now has 119 stores across  Malaysia. (Malaysian Reserve)  

Salcon has been awarded a RM20.4m contract by Octagon Engineering to undertake  repair, upgrade and related works at Sungai Chukai near Kemaman, Terengganu. The  subcontract is for an 18-month period to Feb 2013. (Malaysian Reserve)  

Jaks Resources has come to contractual terms with relevant authorities and the  Vietnamese government on its proposed 2x600MW coal-fired power plant project in Hai  Duaong province, Vietnam. Construction of the plant  is slated to begin in the second quarter of 2013. (Malaysian Reserve)  

Toyota Motor will manufacture the Prius hybrid and its key parts in China in a bid to boost  sales in the world’s largest car market. This will  mark the first time the Japanese  automaker has produced key components such as motors and batteries for the petrolelectric hybrid in a facility outside Japan. (BT)  

Lion Forest Industries Bhd (LFIB) plans to acquire some 58,000ha of land in Kampong  Thom province, Cambodia, on a lease basis for the cultivation of oil palm and rubber trees.  The land would cost RM78.3m or RM1,350 per hectare. (Malaysian Reserve)

20110905 1537 Global Market Related News.

Global Investors Should Brace For ‘More Pain’ on China Outlook, CICC Says (Source: Bloomberg)
Global investors should brace “for more pain” as manufacturing growth slumps and prospects that Chinese monetary policies will loosen have faded, said China International Capital Corp., Asia’s biggest investment bank. China’s August manufacturing data was one of the lowest since the end of the global financial crisis, while factory output in South Korea, Taiwan, France, Italy, the UK and Sweden all dropped below expansion levels, Hao Hong, a Beijing-based global strategist at CICC, wrote in a report. CICC and Shenyin & Wanguo Securities Co. cut their earnings forecasts for publicly traded companies this year on speculation the central bank may not halt measures to curb credit growth and tame inflation. “Our view has been that rebounds are likely to be fleeting and feeble unless fundamentals start to improve,” Hong said. “For now, we should brace ourselves for more pain.”

Asian Stocks Decline After U.S. Employment Report Fuels Recession Concerns (Source: Bloomberg)
Asian stocks fell, with the benchmark regional index headed for its biggest decline in two weeks, as mining companies and exporters dropped after the U.S. jobs market stalled in August, fueling concern the world’s largest economy may be headed for a recession. Samsung Electronics Co., a South Korean exporter of consumer electronics that gets 22 percent of its revenue from America, sank 4.9 percent in Seoul. Toyota Motor Corp. (7203), the world’s biggest carmaker by market value, declined 2.6 percent in Tokyo. Clothier Fast Retailing Co. sank 1.7 percent after reporting sales fell at its Uniqlo stores. BHP Billiton Ltd. (BHP), the world’s largest mining company and Australia’s No. 1 oil producer, retreated 2.1 percent after crude and metal prices slipped.
The MSCI Asia Pacific Index dropped 2.6 percent to 120.98 as of 3:20 p.m. in Tokyo, headed for its biggest drop since Aug. 19. Almost six 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.

Stagnant August Payrolls in U.S. Add to Signals of Renewed Recession Risk (Source: Bloomberg)
The U.S. may be on the cusp of a recession for the first time in more than two years. Stagnant payrolls in August reported last week added to data over the past month showing the economy is faltering, including slowing manufacturing, plunging consumer confidence, falling home values and lower bond yields and stock prices. “At this stage of the typical expansion we expect above- average growth and instead we are barely seeing any growth at all,” said James Hamilton, an economics professor at the University of California, San Diego, who has advised Federal Reserve banks and studied what tips the U.S. into downturns. “We have to be more worried. Overall, the economy is in a delicate position and another shock could send us down.”

Job Growth Stagnates in U.S. in August as Unemployment Rate Holds at 9.1% (Source: Bloomberg)
Job growth in the U.S. unexpectedly stagnated in August, adding to pressure on Federal Reserve Chairman Ben S. Bernanke and President Barack Obama to rouse an economy that’s at risk of stalling two years after the last recession ended. Payrolls were unchanged, the weakest reading since September 2010, the Labor Department said yesterday in Washington. The median forecast in a Bloomberg News survey called for a gain of 68,000. The jobless rate held at 9.1 percent. “It’s a very, very difficult labor market,” said John Silvia, chief economist at Wells Fargo Securities LLC in Charlotte, North Carolina. “We have an economy that’s just muddling through.”

Services Industry in U.S. Probably Grew at Slowest Pace Since January 2010 (Source: Bloomberg)
Service industries in the U.S. probably expanded in August at the slowest pace in more than a year, adding to concern the recovery is losing steam, economists said before a report this week. The Institute for Supply Management’s non-manufacturing index fell to 51 last month, the lowest since January 2010, from 52.7 in July, according to the median of 59 forecasts in a Bloomberg News survey ahead of the Sept. 6 release. A reading of 50 is the dividing line between expansion and contraction. A Sept. 8 report from the Commerce Department may show the trade deficit shrank from the highest level since October 2008. The recovery risks stalling without a pickup among the non- manufacturing industries that account for about 90 percent of the economy. A stagnant labor market and bleaker business and consumer sentiment may require more effort from President Barack Obama and Federal Reserve Chairman Ben S. Bernanke to spur growth.

U.S. Stocks Fall as Employment Data Fuels Recession Concerns (Source: Bloomberg)
U.S. stocks fell this week as the Standard & Poor’s 500 Index posted its biggest monthly decline in more than a year and a report showing employment stagnated in August fueled concern the economy may slip into a recession. Bank of America Corp. (BAC) and JPMorgan Chase & Co. (JPM) lost at least 4.4 percent as the Federal Housing Finance Agency sued lenders over residential mortgage-backed securities. AT&T Inc. (T) declined 3.4 percent after the government sued to prevent its planned purchase of T-Mobile USA Inc. First Solar Inc. (FSLR) dropped 11 percent after the International Energy Agency said the price of solar power may fall. The S&P 500 fell 0.2 percent to 1,173.97 this week as a 2.5 percent slide on the last day wiped out gains from earlier in the week. The Dow Jones Industrial Average decreased 44.28 points, or 0.4 percent, to 11,240.26. Both gauges posted their biggest monthly losses since May 2010 in August.

Dollar Debt Drops Most Since Lehman as Bank Concerns Mount: China Credit (Source: Bloomberg)
Chinese companies’ dollar debt is handing investors the biggest losses in almost three years as concern bad loans will climb cools appetite for the securities amid signs the global recovery is losing steam. The notes fell 1.5 percent in August, the most since global credit markets seized up in October 2008 following the collapse of Lehman Brothers Holdings Inc., according to the HSBC Asian U.S. Dollar Bond Index. Only India’s debt performed worse among issuers from Asia’s 10 biggest economies excluding Japan and Taiwan. Bonds sold by firms in Singapore, the only regional economy to be rated AAA by the three largest ratings companies, gained 1.3 percent, while U.S. Treasuries rose 2.8 percent.
Chinese companies have sold a record $33 billion of dollar- denominated bonds this year as the yuan strengthened 3.3 percent versus the greenback and domestic interest rates were raised three times. The cost to protect the Asian nation’s sovereign debt against default jumped the most in two years in August amid fears the banking system will need to be bailed out as loans to local governments turn sour.

China’s Stocks Decline to Lowest in Year on Services Slump, U.S. Jobs Data (Source: Bloomberg)
China’s stocks fell to the lowest level in almost 14 months as a drop in a Chinese services index to a record low and a report showing no U.S. jobs growth last month boosted concerns global economic growth is stalling. Anhui Conch Cement Co., China’s biggest maker of the building material, plunged 6.2 percent after a purchasing managers’ index slid to 50.6 in August from 53.5 in July. PetroChina Co. sank to its record low, and Jiangxi Copper Co. slumped more than 2 percent after the U.S. unemployment rate stayed at 9.1 percent last month. Shenzhen Development Bank Co. (000001) led declines for lenders after the China Securities Journal said new reserve requirements for 14 listed banks may increase by about 700 billion yuan ($110 billion) over the next six months. The Shanghai Composite Index, which tracks the bigger of China’s stock exchanges, lost 42.2 points, or 1.7 percent, to 2,486.08 at 1:08 p.m., the lowest since July 19, 2010. The CSI 300 Index retreated 1.9 percent to 2,751.99.

China HSBC August Services PMI Drops to Record Low as New Business Slows (Source: Bloomberg)
A Chinese services index fell to a record low in August as new business growth moderated, adding to evidence the economy is slowing after the government raised interest rates, curbed lending and limited property purchases. A purchasing managers’ index dropped to 50.6 from 53.5 in July, according to a statement issued by HSBC Holdings Plc and Markit Economics. The reading, near the borderline of 50 that marks expansion or contraction, was the lowest since the series began in November 2005, HSBC said. The data “reflects the effect of property and credit tightening measures,” Qu Hongbin, chief China economist at HSBC in Hong Kong, said in the statement. Tightening is probably approaching an end and consumer spending is resilient, “suggesting China’s service sector is likely to see a moderation in growth and not a meltdown.”

Megabank Default Risk Falls From Record High After Downgrade: Japan Credit (Source: Bloomberg)
The cost of insuring Japan’s largest lenders’ bonds is falling more than for any domestic company after the Moody’s Investors Service downgrade of the nation’s credit rating sent bank credit-default swaps to a record. The top banks occupied five of the six biggest swap declines last week, according to a Bloomberg ranking of derivative price changes from data provider CMA. Five-year contracts covering subordinated bonds of Sumitomo Mitsui Financial Group Inc. (8316)’s main banking unit dropped 48 basis points in the five days ended Sept. 2 to 277.5 basis points. By comparison, swaps for JPMorgan Chase & Co. subordinated debt rose to 125 basis points from 118.5 last week. Debt ratings for Mitsubishi UFJ Financial Group Inc. (8306), Sumitomo Mitsui and Mizuho Corporate Bank Ltd. were cut one step by Moody’s on Aug. 24 following its downgrade of Japan to Aa3 from Aa2, reflecting reduced government support in a crisis scenario.
The banks’ debt risk fell last week on optimism a 20- month slide in Japanese loan demand will reverse in the fiscal year ending in March, analysts said.

Indian Services Grow at Slowest Pace in Two Years After Record Rate Rises (Source: Bloomberg)
India’s services industry grew at the slowest pace in more than two years in August after the central bank’s record interest-rate increases and a weakening global economy restrained consumer demand. The Purchasing Managers’ Index fell to 53.8 last month from 58.2 in July, HSBC Holdings Plc and Markit Economics said in an e-mailed statement today. That’s the lowest level since June 2009. A reading above 50 indicates an expansion. Asia’s growth has slowed as a faltering recovery in the U.S. and Europe’s debt crisis hurt the region’s exports, complicating monetary policy for central banks still grappling with price pressures. India’s manufacturing grew at the slowest pace in 29 months in August, a report showed last week, while inflation has exceeded 9 percent for eight straight months even after 11 rate increases since mid-March 2010.

BOE Needs Better Governance: Darling (Source: Bloomberg)
Bank of England Governor Mervyn King has too much individual power and a board of directors should be put in place to improve governance of the central bank, former Chancellor of the Exchequer Alistair Darling said. Darling said his efforts to tackle the financial crisis in late 2007 had been hampered by disagreements with King, who he considered not reappointing for a second term. The former chancellor was speaking yesterday on BBC 1 television’s “Andrew Marr Show” before the publication this week of his book, “Back from the Brink.” “The present government wants to make the Bank of England not just responsible for interest rates, but also for the supervision of banks, where its track record is mixed, and also it’s got this overall responsibility for trying to iron out the peaks and troughs of the economic cycle,” Darling said. “That is an awful lot of things to invest in one person.”

Spain’s Rajoy May Win Parliament Majority, Enabling Tax Cuts, Bank Reform (Source: Bloomberg)
Spanish opposition leader Mariano Rajoy may win a parliamentary majority in elections in November, a poll indicated, strengthening his hand to implement pledges of tax cuts to aid growth and financial-industry reform as Spain’s debt crisis deepens. The People’s Party may win 47.1 percent of the vote, compared with 32.3 percent for the ruling Socialists, El Mundo reported yesterday, citing a poll. That would give the party a majority of seats in the 350-member Parliament in Madrid, the newspaper said. Rajoy, who has lost two general elections since becoming PP leader in 2004, promised a “law for entrepreneurs” that would include a 5 percentage-point cut in company tax. In a Sept. 3 speech, he also promised a “true restructuring of the financial sector” and changes to labor and energy-market laws.

Dollar Rises Against Euro, Kiwi, Aussie in Early Trades on Risk Aversion (Source: Bloomberg)
The U.S. dollar advanced against the euro, the Australian and New Zealand currencies, extending gains from last week that had come amid concern Europe’s sovereign- debt crisis will worsen. The dollar climbed to $1.4167 per euro in early Asia- Pacific trading from $1.4205 at the end of last week in New York, and rose to 76.87 yen from 76.80 yen. The greenback strengthened against the New Zealand dollar to 84.44 cents from 84.81 cents and advanced to $1.0617 per Australian dollar from $1.0645. The euro fell last week versus most peers as the premium European banks pay to borrow in dollars through the swaps market increased to the most since May 2010, a sign of concern that officials in the region are struggling to contain the fiscal crisis.

20110905 1536 Global Commodities Related News.

Funds Increase Bullish Agriculture Bets on ‘Explosive’ Supply Constraints (Source: Bloomberg)
Funds increased bullish bets on agricultural commodities by the most in more than a year on signs of tightening supplies amid adverse weather conditions. In the week ended Aug. 30, speculators raised their net- long positions in 11 commodities by 18 percent to 915,341 futures and options contracts, government data compiled by Bloomberg show. That was the biggest gain since Aug. 3, 2010. Holdings in wheat more than tripled, bullish corn bets reached an 11-week high, and soybean positions jumped to the highest since November 2010. Corn prices have jumped 70 percent in the past year and soybeans have gained 43 percent. The hottest July since 1955 means that U.S. production of both crops may miss government estimates, according to researcher and broker INTL FCStone Inc. The costliest drought in Texas history has hampered U.S. supplies of cotton, while dry weather in the U.S. Great Plains may curb planting of winter wheat.

Corn (Source: CME)
US corn futures finish sharply higher on talk crop-forecaster Lanworth slashed its yield estimate to nearly 143 bushels/acre. That is 6% below the USDA's latest estimate and well below most traders' projections. Lanworth declined to comment on the chatter. Word of the cut sparked buying as traders are nervous about tight inventories and damage from hot, dry weather this summer. Farmers won't know the full impact of the poor weather until harvest picks up speed in the coming weeks. CBOT December corn climbs 21 1/2c to $7.60 a bushel.

Wheat (Source: CME)
US wheat futures close higher on spillover support from the surging corn market. Corn climbed on increasing concerns about low supplies, dragging up wheat because both grains are used for livestock feed. Livestock producers are increasingly feeding wheat to their animals because corn prices have soared. Yet, wheat would struggle to advance without a rally in corn because world wheat supplies are ample, analysts say. CBOT December wheat ends up 14 1/2c to $7.75 1/2 a bushel, while KCBT December wheat gains 8c to $8.80 and MGEX December advances 10 3/4c to $9.42 3/4.

Rice (Source: CME)
US rice futures climbed with other grain markets on supply concerns. Spillover strength from climbing prices for wheat and corn help lift rice, with wheat and rice linked because both are global food staples. Traders are worried about poor US grain harvests this fall due to hot, dry weather this summer. Farmers say high night time temperatures in the southern US stressed the rice crop. CBOT November rice rises 26c to $18.22 1/2/hundredweight.

Wheat Climbs Most in Week as Dry U.S. Great Plains May Cut Winter Crops (Source: Bloomberg)
Wheat futures rose the most in more than a week on speculation that persistent dry weather in the U.S. Great Plains will curb winter-crop planting. Parts of southern Kansas and western Oklahoma have had less than half of the normal rainfall this year, while areas of Texas had 25 percent or less, according to the National Weather Service. Farmers usually plant hard, red winter wheat, the variety grown in the Plains that’s used to make bread, in September and October. Crops sown in dry soil may not emerge from the ground before the winter dormancy period. “In a lot of areas of Oklahoma and Texas, and some areas in southwest Kansas, they probably couldn’t get any wheat up at this time,” Larry Glenn, an analyst at Frontier Ag, said by telephone from Quinter, Kansas. “There’s been talk about some moisture for the Plains states. Some will help, but they really need a lot.”

Corn, Soy Rise on Speculation Bad Weather Hurt Crop More Than Estimated (Source: Bloomberg)
Corn futures rose the most in a week and soybeans extended their rally on speculation that hot, dry weather in the U.S., the world’s largest grower and exporter, damaged crops more than forecast by the government. Production of corn will drop to a three-year low of 12.35 billion bushels, researcher and broker INTL FCStone Inc. said yesterday. That’s below last month’s U.S. Department of Agriculture estimate of 12.914 billion. FCStone forecast a soy crop of 3.03 billion bushels, less than the USDA’s estimate of 3.056 billion and last year’s harvest of 3.329 billion. “U.S. crop forecasts are falling, and that will continue to support the markets,” Chad Henderson, a market analyst for Prime Agricultural Consultants Inc. in Brookfield, Wisconsin, said in a telephone interview. “Until we hear actual farmer harvest results, the uncertainly about supplies keeps end-users and speculators buying on price dips.”

China Aims To Boost Grain, Meat Output By 2015 (Source: CME)
China is targeting an 8% rise in grain production capacity by 2015 from 2010 levels and has kept unchanged its 95% grain self-sufficiency rate target, the Ministry of Agriculture said Friday. The world's largest grain consumer is facing challenges in stabilizing grain production amid rising demand and declining arable area due to rapid urbanization. Grain output reached 546.4 million metric tons in 2010, rising for the seventh year in a row, and China is now aiming at an annual capacity of more than 540 million tons in the 12th Five-Year Plan [2011-2015], from around 500 million tons in 2010, the ministry said in a statement on its website. "Guaranteeing supply of grain and other major agricultural products will remain top priority [between 2011 and 2015]," it said. The government also aims to maintain grain acreage above 1.07 billion hectares by 2015, compared with actual acreage of 1.1 billion hectares last year.
Demand for corn is growing faster than domestic supply of the most popular animal feed, amid a rise in meat consumption. China has reportedly bought more than 3 million tons of corn from the U.S. so far this year to replenish reserves, more than twice the total imports in 2010. Its annual corn output is around 180 million tons. It is also aiming to boost cotton output to more than 7 million tons in 2015 compared with actual output of 5.96 million tons in 2010, the ministry said. China is the world's largest cotton importer. The ministry said the country's 2015 oilseed output target would be 35 million tons compared with 32.3 million tons in 2010, in its attempt to stabilize edible oil self-sufficiency rate at about 40%. China's edible oil self-sufficiency is only 37%, industry data showed. Output of sugar crops, which include sugar cane and sugar beets, is expected to reach 140 million tons compared with actual output of 120 million tons in 2010.
The ministry said it aims to raise meat output--including pork, beef and poultry--to 85 million tons in 2015 from 79.3 million tons in 2010.

NE Australian Wheat Crops Remain Of Concern (Source: CME)
Wheat crops in dry soils in northern New South Wales and Queensland states remain a matter of concern despite rainfall in some areas over the past week or so, Michael Southan, general manager of grower development at lobby and services concern Grain Growers Ltd., said Friday. "It's really northern New South Wales and parts of Queensland that are getting quite desperate" for rain, he said in a telephone interview. Other factors to watch include how quickly the weather warms up during the spring growth period and the amount of damage that mice inflict on crops, he said. Crops in the northern wheat belt of Western Australia are in pretty good shape, though crop quality in that state deteriorates to the east and the south, while crops in South Australia and Victoria states are generally in good condition, Southan said. "We're still going to need some good rains through spring to get the crops home," he said. "The potential is still there for a good harvest, but there's still so much variability."
As for national production, the spring rains will determine whether output will reach the 21.8 million metric tons forecast this week by National Australia Bank Ltd. (NAB.AU), the 23.5 million tons estimated by Commonwealth Bank of Australia (CBA.AU) or a 26.2 million tons projection by the Australian Bureau of Agricultural and Resource Economics and Sciences. Actual output last crop year ended March 31 was a was a record 26.3 million tons, and production from the new crop will help determine export availability in Australia, usually one of the world's top five wheat exporters after domestic demand of 6 million tons is met.

Indian Panel May Consider Wheat, Rice Exports (Source: CME)
An Indian ministerial panel may consider allowing wheat exports as well increasing shipments of common-grade rice by private traders on Sept. 6, Food Minister K.V. Thomas said Friday. "We are open to allowing 1.0 million tons of parboiled rice as well as 1.0 million tons of ordinary rice," Thomas told Dow Jones Newswires, adding that small quantities of premium rice exports may also be permitted. He said the food ministry is also in favor of allowing 2.0 million tons of wheat exports.

Ukraine Wheat Crop Quality Questioned (Source: CME)
Ukraine's 2011-12 wheat crop may be more than half feed wheat due to poor weather during the harvest, local analyst UkrAgroConsult said in a report Friday. UkrAgroConsult expects milling wheat to make up 40% to 45% of the crop, down from 55% a year earlier. Traders say even that could be optimistic, with some predicting feed wheat will account for 70% of the harvest. In August, the country's farm ministry forecast the share of milling wheat in this year's bumper harvest would be 70%, up from its estimate of 60% a month earlier.

India Cautious About High Food Inflation (Source: CME)
The Indian government is "cautious" about high food inflation but that won't weigh on grain export prospects, Food Minister K.V. Thomas said Friday. The comments come a day after government data showed that wholesale price index-based food inflation in the week ended Aug. 20 accelerated to 10.05% from a year earlier. That compares with a 9.80% rise in the previous week and is the highest level in more than four months. Thomas told Dow Jones Newswires that inflation was being driven by problems in supplies of vegetables including onions in some regions, but added that it wasn't worrying. The long-term solution to curbing food prices is to improve storage and processing capacities, he said. Analysts say food prices are high mainly because of poor management as the government's grain stocks have piled up to nearly double its requirement and state-run warehouses have run out of space.
Also, nearly a third of the country's fruit and vegetable produce goes waste due to lack of cold chains and efficient transport linkages between producing and consuming centers. Some relief from high food prices is expected in coming months with the country expected to receive normal monsoon rain this year, after a pick up in the second half of the June-September rainfall season that is the main source of irrigation for most farm land. "Food inflation should come down, but the point is to what level. I don't see it coming below 7%-8%," said D.H. Pai Panandikar, an economist and president of the RPG Foundation, a think tank. "The worry is that the frequency of price hikes in fruits and vegetable is increasing," he said, attributing it to both supply shortages as well as huge gaps between retail and wholesale prices.
Food Minister Thomas said that inflation worries won't derail prospects of grain exports as there were ample stocks, and that a ministerial panel may consider allowing wheat and rice exports on Sept. 6. "We are open to allowing 1.0 million tons of parboiled rice as well as 1.0 million tons of ordinary rice," Thomas said. He added that permission for export of small quantities of premium rice as well as 2.0 million tons of wheat may also be considered. In July, the government permitted shipments of common-grade rice for the first time in three years after setting a minimum export price of $400/ton and imposing a cap of 12,500 tons for each applicant, but the exports got locked up in a legal dispute over rules.

Coffee, sugar down, inline with commodity complex
LONDON, Sept 2 (Reuters) - Arabica coffee and raw sugar futures on ICE edged lower, as commodities eased ahead of U.S. jobs data
due later in the session.
Harvest of top producer Brazil's crop is near completion and output is expected to come in at the low end of expectations, which is
helping support the market, dealers said.

US Grain Exports-Soy sales dip as S.America competes
CHICAGO, Sept 1 (Reuters) - U.S. soybean export sales last week fell about 10 percent from the prior week due to competition from South American suppliers, analysts said after Thursday's weekly U.S. Agriculture Department export sales report.
The sales were within trade expectations, but the pace of new-crop sales, which typically accelerate in late summer  remained behind last year, they said.

China sugar deficit seen at 2.3 mln T in 2011/12
BEIJING/SINGAPORE, Sept 2 (Reuters) - China's sugar demand could outpace output by more than 2 million tonnes in the year to
September 2012 after a prolonged drought hit the growing region, triggered a supply shortage and forced Beijing to release stocks to cool
record high prices.  
China's appetite may ease worries about a global surplus in the new crop year starting in October as the country rebuilds inventory after
selling 1.68 million tonnes of sugar from state reserves, according to a median forecast of 10 dealers and analysts.
Honduras, Costa Rica coffee exports fall in Aug
TEGUCIGALPA, Sept 1 (Reuters) - Coffee exports from Honduras, Central America's top producer, fell 25 percent in August compared
to the same month last year, while shipments from the region's No. 2 grower Guatemala rose slightly.
Costa Rica, another regional producer, saw exports fall in August as well.

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.

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.

Costa Rica sees 2011/12 coffee output down slightly y/y
SAN JOSE, Sept 1 (Reuters) - Costa Rica's national coffee institute revised down on Thursday its forecast for the 2011/12 coffee harvest,
which begins in October, due to a calculation error and now sees production just below the 2010/11 season.
The institute, known as Icafe, said the Central American country, famed for its high-quality arabica coffee exports, will produce 1.58
million 60-kg bags of coffee in the upcoming season, lower than the 1.65 million previously estimated.

ISO sees jump in global sugar surplus in 2011/12
LONDON, Sept 1 (Reuters) - The International Sugar Organization (ISO) forecast a sharp jump in the global sugar surplus to 4.2 million
tonnes in 2011/12 from 843,000 tonnes a year earlier as output surges to a record high.
In its latest quarterly report on Thursday, the ISO projected global sugar production would rise 4.0 percent year-on-year to 172.4 million
tonnes in 2011/12.

Germany sees higher sugar output in 2011/12
HAMBURG, Sept 1 (Reuters) - German output of refined sugar in the new 2011/12 season is likely to rise to 4.47 million tonnes against
3.6 million tonnes in the previous season, the country's Agriculture ministry said on Thursday.
This was the same as forecast by the German sugar industry association WVZ on Aug. 19.

Philippines sees more sugar exports to non-U.S. mrkts
MANILA, Sept 2 (Reuters) - The Philippines expects sugar output in crop year ending August 2012 of around 2.4 million tonnes, nearly flat from the previous year, and may sell the sweetener to other countries on top of its U.S. quota for a second year in a row, a senior official said.
The Southeast Asian country closed the 2010/11 crop year on Aug. 31 with total raw sugar output of 2.39 million tonnes, the highest in three years and up 21 percent from 2009/10.

Malaysia imports LNG in struggle to eliminate subsidies
KUALA LUMPUR/PERTH, Sept 2 (Reuters) - Malaysia, one of the world's top liquefied natural gas exporters, is making plans to import LNG to meet its growing domestic needs as it struggles to push through gas pricing reform and brace for its own declining gas production.  
The Southeast Asian nation, the world's third largest LNG exporter, will begin importing the super-cooled fuel next year into its Melaka LNG terminal, a move that will help it protect the large amount of revenue it receives from its LNG exports.

Oil falls, awaits US jobs data, storm
LONDON, Sept 2 (Reuters) - Oil futures fell as the market nervously awaited U.S. jobs data for new evidence on whether the world's largest crude consumer can avoid recession.
"It's wait and see at the moment," said Rob Montefusco, oil trader at Sucden Financial.

Russia may boost oil exports via Baltic in 2012
MOSCOW, Sept 2 (Reuters) - Russia is likely to increase its crude oil exports via the Baltic Sea ports in 2012 by 40 percent to around 100 million tonnes, an official at Russian oil pipeline monopoly Transneft  told reporters on Friday.
"There is potential to increase exports in the Baltic to 100 million tonnes in 2012," Transneft Vice President Mikhail Barkov said.  

Oil Drops on Signs of Economic Slowdown; Gulf Workers Return After Storm (Source: Bloomberg)
Oil declined for a second day in New York as investors speculated that signs the Chinese and U.S. economies are weakening indicate fuel demand will falter in the world’s biggest crude-consuming nations. Futures slipped as much as 1.3 percent after a Chinese services index fell to a record low in August. Prices slumped 2.8 percent on Sept. 2 after a report showed U.S. employment stagnated. Crude also declined as Exxon Mobil Corp. and Royal Dutch Shell Plc returned workers to some oil and natural gas platforms after Tropical Depression Lee moved out of the Gulf of Mexico. London-traded Brent widened its premium to U.S. prices for a second day. “The sentiment is negative as a result of the employment data and people are starting to think the economy is kaput,” said Jonathan Barratt, a managing director of Commodity Broking Services Pty in Sydney. “Equity prices are under pressure, crude is under pressure. Confidence will have to be rebuilt.”

Bolivia plans to hike mining royalties
LA PAZ, Sept 1 (Reuters) - Bolivia's leftist government plans to raise mining royalties to take advantage of high global metals prices and bolster the state's role in the industry, Deputy Mining Minister Hector Cordova told Reuters.
President Evo Morales, a close ally of Venezuelan President Hugo Chavez, has steadily increased state control over natural resources in the mineral- and natural gas-rich country, which is home to one of the world's largest silver mines, San Cristobal.

Iron Ore-Spot prices firm on healthy outlook
SHANGHAI, Sept 2 (Reuters) - Spot iron ore prices were steady on Friday, as miners held offers firm amid an anticipated pick-up in Chinese steel demand as well as the continued tightness in supply from India, pushing up global indexes to nearly four-month highs.  The persistent shortage of iron ore exports from India's southern Karnataka state as well as the approaching peak consumption season in China have sustained the strength in iron ore offers.

China imported iron ore stocks hit record in wk to Sept 2
BEIJING, Sept 2 (Reuters) - Inventories of imported iron ore at major Chinese ports rose 0.5 percent to a record 95.59 million tonnes by the end of this week, according to data from industry consultancy Mysteel on Friday.
Inventories originating in Brazil fell slightly from last Friday, but that was offset by increases in deliveries from India and Australia.

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.

Global miners seen keeping iron ore prices steady in Q4
MANILA, Sept 1 (Reuters) - Global miners are likely to keep iron ore contract prices  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 such as 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, the basis for third-quarter pricing.

Copper in London Drops for 3rd Day as U.S. Jobs Data Stokes Growth Concern (Source: Bloomberg)
Copper declined for a third day amid stalling U.S. job growth and concern that Europe’s sovereign- debt crisis will worsen, fueling fears that a weaker economy may reduce demand for industrial metals. Three-month delivery copper on the London Metal Exchange fell as much as 0.8 percent to $9,005 a metric ton, the lowest level since Aug. 26, and traded at $9,010 at 3:09 p.m. Tokyo time. The metal earlier gained as much as 0.4 percent. Asian stocks and oil fell for a second day, following the 2.5 percent slump in Standard & Poor’s 500 Index futures on Sept. 2 after the U.S. Labor Department reported the weakest payrolls reading since September 2010. The Dollar Index headed for its longest winning streak in eight months, reducing the appeal of copper as a rise in the greenback makes metals priced in U.S. dollars more expensive to investors holding other currencies.

Copper May See Shortage for Third Year (Source: Bloomberg)
Copper will remain in short supply for a third straight year in 2012 as China-led demand boosts prices, Japan’s top producer said. Demand will likely exceed supply by 495,000 metric tons in 2011, the biggest deficit since 2004, compared with 214,000 tons last year, said Akira Miura, executive officer of the marketing and raw-material department at Pan Pacific Copper Co., Japan’s biggest producer. The shortage may shrink to 31,000 tons in 2012, he said. Copper, used in wires and pipes, has climbed 18 percent in the past year, reaching a record $10,190 a ton in February, as the global economy recovers from its worst recession since World War II. Higher prices benefit major producers such as BHP Billiton Ltd. (BHP) and Freeport-McMoRan Copper & Gold Inc. (FCX) The metal is favored by Goldman Sachs Group Inc. because of its “superb supply-demand fundamentals.”

Gold May Fall as Investors Seek Cash as Equities Slump on Growth Concerns (Source: Bloomberg)
Gold fell as some investors sold the metal for cash to cover losses in other markets after equities slumped on concern that economic growth in the U.S. is slowing and the sovereign-debt crisis in Europe is worsening. Immediate-delivery gold traded 0.3 percent lower at $1,876.65 at 1:02 p.m. Singapore time after swinging between gains and losses of 0.5 percent. The metal reached a record $1,913.50 on Aug. 23. December-delivery futures were little changed at $1,879.30 an ounce, paring a 0.9 percent advance. Bullion priced in euros and sterling jumped to all-time highs. “Given the economic uncertainties in the world, any drop in gold will be limited as it benefits from the risk aversion trade,” said Li Ning, an analyst China International Futures (Shanghai) Co.

Baltic index rallies, capes at near 9-month high
LONDON, Sept 1 (Reuters) - The Baltic Exchange's main sea freight index, which tracks rates to ship dry commodities, rose to its highest in nearly eight months on Thursday as a surge in coal and iron ore bookings on the larger capesizes bolstered sentiment and earnings.
Brokers said a growing ship glut was set to cap dry bulk freight rate gains in the coming months.      
The overall index rose 3.89 percent or 63 points to 1,682 points, in a second day of gains and was at its highest since Jan. 4. Before Wednesday's rise it had fallen for three sessions. The index had hit a near seven-month high last month.

Asia Dry Bulk-Panamax rates to rise on China demand
SINGAPORE, Sept 1 (Reuters) - Rates for panamax dry bulk carriers on key Asian freight routes are expected to rise over the next week, supported by increased iron ore and coal shipments to China, shipbrokers said on Thursday.
For larger capesize vessels, rates are seen hovering near nine-month highs as the Pacific basin finds support from tight ship supplies in the Atlantic.

China COSCO to merge freight units to boost bargaining power
SINGAPORE, Sept 1 (Reuters) - China's state-owned COSCO Group will merge its dry bulk freight units to improve its bargaining power with shipowners, as it struggles with a severe market downturn and payment disputes that have tainted its reputation.
The country's top shipping conglomerate hopes to consolidate COSCO Bulk Carrier, COSCO Hong Kong Shipping and Qingdao Ocean Shipping into one firm as soon as possible, a COSCO official said.

20110905 1535 Soy Oil & Palm Oil Related News.

Soybeans (Source: CME)
US soybean futures end higher, fueled by ongoing fears of smaller crop potential. Private forecasters continue to point to smaller yield outlooks, raising concerns of tighter supplies in 2012, analysts say. Supply concerns enabled traders to look past the negative financial market influences that arose from a weak August job report, analysts say. However, advances were limited by threat of slowing demand and acknowledgment of traders that soybean yields still have room to improve from late-season rains. CBOT Nov soy end up 11 1/4c at $14.45 3/4.

Soybean Meal/Oil (Source: CME)
Soy product futures bounce, following the lead of soybeans. Soymeal rallied on the threat of smaller available soybean supplies for crushing in 2012, while soyoil gains were muted by spillover weakness from sharp declines in crude oil futures. CBOT Dec soymeal finish up $1.50 at $385.00/short ton, and Dec soyoil ends up 0.03 cents at 58.26 cents/pound.

Palm gains as vegoils, crude strengthen
JAKARTA, Sept 2 (Reuters) -     Malaysian palm oil futures climbed as much as 2 percent, boosted by gains in other vegetable oil markets,
but worries about the health of the global economy put a cap on prices.
"Chicago Board of Trade markets rose over the week," said a Indonesia-based palm trader. "Palm is playing catch up."

Germany may spoil outlook for EU rapeseed sowings
HAMBURG, Sept 1 (Reuters) - Rain in Germany may spoil an otherwise positive picture for European Union rapeseed sowings for the
2012 harvest after bad weather caused a huge drop in the 2011 German crop, traders and analysts said on Thursday.
"It looks like the problem with German rain threatening EU rapeseed supplies will not end with this year's terrible German rapeseed
crop. Unless the weather really dries up fast, smaller German sowings could also threaten the EU's 2012 crop," one trader said.