Thursday, September 15, 2011

20110915 1843 FCPO EOD Daily Chart Study.


FCPO closed : 3078, changed : +13 points, volume : lower.
Bollinger band reading : side way range bound little upside biased.
MACD Histrogram : rising, buyer taking position.
Support : 3070, 3050, 3020, 2970 level.
Resistance : 3100, 3150, 3200, 3250 level.
Comment :
FCPO closed recorded small gain with declined volume participation while overnight soy oil ended lower weaker and currently rebounding higher while crude oil currently trading little lower after yesterday gains.
FCPO price closed higher despite export data from both ITS and SGS showing decline. News wise, Reuters reported from an industry source shows Indonesia Aug 2011 export increase by 13.1% and Sep palm oil export tax to kept at 15% while Reuters analyst seen higher than normal rainfall across Southeast Asia may hurt palm oil production.
Daily chart formed an up bar candle with small upper and lower shadow closed nearer to upper Bollinger band level after market opened lower, moved side way range bound for the entire morning session followed by after lunch upward rise and eased little lower toward the end but still closed near the high of the day.
Technical reading remained suggesting a side way range bound little upside 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.

20110915 1725 FKLI EOD Daily Chart Study.

FKLI closed : 1428.5, changed : -4.5 points, volume : lower. 
Bollinger band reading : downside biased.
MACD Histrogram : falling, seller taking position.
Support : 1425, 1405, 1395, 1385 level.
Resistance : 1445, 1458, 1470, 1485 level.
Comment :
FKLI closed recorded loss with slower volume transacted doing about 2.5 points discount compare to cash market that ended lower after heavy weight counter Sime Darby and HLBANK price sell down severely lower. Overnight U.S. market closed higher for the third day and Asia markets ended mostly higher while European markets currently trading higher. 
Market reacted positively to French and Germany leader statement that Greece to be remained as a member of European Union and news on Italy austerity package get parliamentary approval. on the other hand, news reported that UBS Bank has discovered a loss due to unauthorized trading by a trader in its investment bank of about $2 billion. 
Daily chart formed a down bar candle closed near lower Bollinger band level after market opened higher, slide downwards all the into negative territory before traded range bound to closed near the low of the day. 
Technical outlook still calling a downside biased market development testing support and resistance level with possible pullback correction.
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. 

20110915 1723 Regional Markets EOD Daily Chart Study.

DJIA chart reading : side way range bound.
Hang Seng chart reading :  side way range bound little downside biased.
KLCI chart reading : downside biased with possible pullback.

20110915 1616 Global Market & Commodities Related News.

European Stocks Gain on Backing for Greece (Bloomberg)
European stocks climbed for a third day as assurance from Germany and France that Greece will remain a member of the euro outweighed a $2 billion trading loss at UBS AG. (UBSN) Asian shares gained and U.S. futures fluctuated. Kingfisher Plc (KGF) gained 5.1 percent after Europe’s largest home-improvement retailer posted earnings that topped analyst estimates. UBS tumbled 5.6 percent after Switzerland’s biggest bank reported a trading loss of about $2 billion because of unauthorized deals at its investment bank. The benchmark Stoxx Europe 600 Index advanced 0.9 percent to 226.24 at 8:38 a.m. in London, extending yesterday’s 1.5 percent gain. The gauge has still fallen 22 percent from this year’s peak on Feb. 17 as European and U.S. economic reports trailed forecasts, adding to concern that the global economic recovery is at risk.

Asian Stocks Rise as Germany, France Say Greece’s Future is in Euro Area (Bloomberg)
Asian stocks climbed, with the regional benchmark index rebounding from its lowest level in more than a year, after French President Nicolas Sarkozy and German Chancellor Angela Merkel said Greece will stay in the euro zone. Westpac Banking Corp. (WBC) gained 2.6 percent in Sydney. Samsung Electronics Co., which receives 20 percent of its revenue from Europe, rose 2.4 percent in Seoul. S-Oil Corp. (010950), which refines and sells petroleum, surged 12 percent. Taiwan Semiconductor Manufacturing Co. advanced 2.8 percent on higher chip prices. Esprit Holdings Ltd. (330), the biggest Hong Kong-listed clothier, tumbled 9.7 percent after reporting profit plunged 98 percent.
“Germany and France’s commitment to continue supporting Greece’s European Union membership diminishes the likelihood that it will be allowed to default,” said Tim Schroeders, who helps manage $1 billion in equities at Pengana Capital Ltd. in Melbourne. “If Greece avoids default, it lessens any flow-on impact through the global banking system, which in turn is positive for Asian stocks.”

Asian stocks rebound on Europe debt hopes
HONG KONG/SINGAPORE, Sept 15 (Reuters) - Asian stocks bounced on Thursday after tentative steps by euro zone policymakers to tackle a crippling debt crisis, but investors remained wary that obstacles the bloc's leaders face could weigh on the euro and Asian currencies in the medium term.
"I'm a bit surprised by the move today. I was not expecting this and I don't expect it to stay here for the whole day," said Simon Burge, a portfolio manager at ATI Asset Management.

FOREX-Euro wobbles as relief over Greece fades
TOKYO/SYDNEY, Sept 15 (Reuters) - The euro slipped in Asia on Thursday, as initial relief over assurances from Germany and France about keeping Greece in the euro bloc wore off amid scepticism over whether euro zone policymakers can help Athens avoid default.
"It eased concern following the departure of key German officials from the ECB that the Germans' commitment to the euro may be weakening. That triggered a bit of short-covering," said Masafumi Yamamoto, chief FX strategist at Barclays Capital in Tokyo, referring to the resignations of Juergen Stark last week and Axel Weber earlier this year from the European Central Bank.

US corn near 4-week low on slowing demand; soy up
SINGAPORE, Sept 15 (Reuters) - Chicago corn fell around half a percent trading close to a four-week low as the market was pressured by prospects of weakening demand for U.S. supplies, while wheat edged lower on outlook for bigger global crops.
"At this stage the bad news that was being whispered has been priced in the market," said Abah Ofon, an analyst with Standard
Chartered Bank in Singapore.

Drought could hit Ukraine '12 grain crop  
KIEV, Sept 14 (Reuters) - Lack of moisture in soil across Ukraine could affect the yield of the next year's winter grain crops and reduce the harvest, a senior weather forecaster said on Wednesday as farms started the 2012 winter grain sowing.
"The situation is not critical but we have enough ground for concerns," Tetyana Adamenko, the head of the agricultural department of Ukraine's meteorological centre, told Reuters in an interview.

India's 2011 tea exports seen down 6.7 pct, output record
MUMBAI, Sept 14 (Reuters) - Tea exports by India, the world's second-biggest producer, could fall nearly 7 percent in 2011 to 180-185 million kilograms partly due to payments problems with Iran which also hurt oil trade, a senior industry official said.
"Unrest in the Middle East and payment problems with Iran affected exports. Now exports demand is improving, but total exports in 2011 will be lower," Deepak Atal, managing director of Amalgamated Plantations, told Reuters in an interview late on Tuesday.

China sees record 2011 grain harvest
BEIJING, Sept 15 (Reuters) - China is likely to reap another bumper grain harvest this year, with output rising 3 percent from a year ago to a record of more than 560 million tonnes, a senior government official said.
"The country's total grain output may hit a record again, the eighth year with a bumper harvest," Zhang Xiaoqiang, deputy head of the National Development and Reform Commission (NDRC), told reporters on Wednesday at the World Economic Forum in Dalian.

Indonesia govt says Sept palm export tax at 15 pct
JAKARTA, Sept 15 (Reuters) - Indonesia, the world's largest palm oil producer, will keep its crude palm oil export tax rate at 15 percent, Yamanah, a director of agricultural and forestry products at the trade ministry, said on Thursday.
Indonesia announced new palm oil export tax rules last month, which include setting the minimum for the CPO export tax at 7.5 percent versus 1.5 pct previously.

Argentina to approve 7.5 mln T of new corn exports -group
BUENOS AIRES, Sept 14 (Reuters) - Argentina's government will authorize 7.5 million tonnes of corn exports in 2011/2012 and up to 500,000 tonnes for 2010/11, an official at the Maizar corn industry group said on Wednesday.
Argentina is the world's No. 2 corn supplier after the United States. The government has an export quota system in place to ensure sufficient corn supplies for the domestic market as the country struggles with double-digit inflation.

Paraguay 2011/12 soy output seen at new record
ROSARIO, Argentina, Sept 14 (Reuters) - Paraguay's 2011/12 soy output should rise 7 percent to a record 9 million tonnes, a representative of the country's grain exporters chamber said Wednesday.
Paraguay is the world's No. 4 soybean exporter, though it ships far less of the oilseed than its giant neighbors Brazil and Argentina.

La Nina return spells bad news for coal, palm oil: Clyde Russell
-Clyde Russell is a Reuters market analyst. The views expressed are his own-
SINGAPORE, Sept 15 (Reuters) - The possible return of La Nina weather conditions spells bad news for Australian coal miners still recovering from once in a century floods that struck at the start of the year.
And higher-than-normal rainfall across Southeast Asia may hurt palm oil production as well, making for a potential third year of weather-related disruptions.

Ethanol industry to stay hungry for U.S. corn
KANSAS CITY, Mo., Sept 14 (Reuters) - The U.S. ethanol industry is keeping its foot on the gas pedal at production plants and if the trend continues it could defy a government forecast that the industry will have its first drop in corn use since the turn of the century.
The government forecast, which was issued on Monday, was based on expected weaker gasoline use and higher corn prices. Ethanol is blended with gasoline. In addition, some analysts said the expiration of an industry tax credit at the end of the year could also eat into profits.

The great European sweet crude crunch: Campbell
-Robert Campbell is a Reuters market analyst. The views expressed are his own-
NEW YORK, Sept 14 (Reuters) - Looking back at the impact of the Libyan civil war on the oil market the most remarkable fact is that the situation did not lead to an oil super-spike.
After all, a scramble for sweet crude in 2007 is widely seen as the trigger for the spiral in oil prices until they hit nearly $150 a barrel.

Oil slips on U.S. demand concerns, Europe debt woes
SINGAPORE, Sept 15 (Reuters) - Oil fell as rising fuel stocks and falling demand in top consumer the United States reinforced views that slowing economic growth and Europe's debt crisis will dent energy use, while a stronger dollar also kept prices under pressure.
"The concern is that what starts as a financial crisis will drive the cost of borrowing to levels where it is difficult for the corporate world to invest, depressing economic activity and putting pressure on oil," said Michael McCarthy, chief markets strategist at CMC markets in Sydney.

S.Korea's Aug LNG imports nearly flat yr/yr
SEOUL, Sept 15 (Reuters) - South Korea's imports of liquefied natural gas (LNG) were almost unchanged in August from a year earlier, customs data showed on Thursday.
South Korea, the world's second-largest LNG buyer after Japan, imported 2.02 million tonnes of LNG last month, compared to 2.04 million tonnes the year before, Korea Customs Service data showed.
 
Americas Petrogas finds oil in Argentina property
Sept 14 (Reuters) - Americas Petrogas  said it found oil in its asset in Argentina and intends to build test production facilities in the fourth quarter.
The company said the first test well on the Neuquen Basin in Argentina flowed at about 1,023 barrels of oil equivalent per day. Petrogas estimates an oil column thickness of about 197 feet from the zones tested, it said in a statement.

EU wants rare earth clarity from China -trade chief
WINDHOEK, Sept 14 (Reuters) - The European Union wants more clarity from Beijing on increased export quotas for rare earth minerals from dominant producer China in meetings next month and December, Europe's trade chief said.
EU Trade Commissioner Karel De Gucht told Reuters late on Tuesday that Brussels was insisting on higher quotas of the minerals that are needed in new technologies ranging
from electric cars to military surveillance.

LME copper up 1 pct on Europe debt hopes, mine strikes
SINGAPORE, Sept 15 (Reuters) - LME copper rose 1 percent on hopes for a resolution of the euro zone's debt crisis while sentiment was supported by strikes at two large copper mines, but the gloomy global economic outlook is likely to keep gains in check.
"Because these countries have a very subdued growth outlook, people are probably not too concerned by copper supply and strike action in places like South America and Indonesia, like they were two or three years ago," said Tom Price, global commodity analyst at UBS.

China copper demand to reach 8.5 mln T by 2015 - assn
SHANGHAI, Sept 15 (Reuters) - China's apparent consumption of refined copper will rise by nearly 40 percent to 8.5 million tonnes per year by 2015, an official from the China Non-Ferrous Metals Industry Association said on Thursday.
"Despite the prospect of a slowdown for major economies around the world, we believe real demand for copper in China will remain strong as the domestic economy continues to develop," Zhao Bo, director of the association's copper department, said on the sidelines of the Metal

METALS-LME copper up 1 pct on Europe debt hopes, mine strikes
SINGAPORE, Sept 15 (Reuters) - LME copper rose 1 percent on Thursday on hopes for a resolution of the euro zone's debt crisis while sentiment was supported by strikes at two large copper mines, but the gloomy global economic outlook is likely to keep gains in check.
"Because these countries have a very subdued growth outlook, people are probably not too concerned by copper supply and strike action in places like South America and Indonesia, like they were two or three years ago," said Tom Price, global commodity analyst at UBS.

PRECIOUS-Gold extends losses on eurozone debt hopes
SINGAPORE, Sept 15 (Reuters) - Gold slipped more than half a percent on Thursday after equities rose and the euro ticked up on optimism over tentative steps by European policy makers to resolve and limit the region's debt crisis.  
"We've seen in the last few days that gold has struggled to make any headway," said Darren Heathcote, head of Investec Australia in Sydney. "That is a sign of the market really waiting for something more substantial, either coming out of Europe or coming out of the United States."

Gold extends losses on eurozone debt hopes
SINGAPORE, Sept 15 (Reuters) - Gold slipped more than half a percent  after equities rose and the euro ticked up on optimism over tentative steps by European policy makers to resolve and limit the region's debt crisis.  
"We've seen in the last few days that gold has struggled to make any headway," said Darren Heathcote, head of Investec Australia in Sydney. "That is a sign of the market really waiting for something more substantial, either coming out of Europe or coming out of the United States."

Newmont to double Peru gold production by 2017
AREQUIPA, Peru, Sept 14 (Reuters) - Newmont Mining Corp's Peruvian subsidiary Yanacocha will produce 2.5 million ounces of gold per year by 2017, nearly doubling its current output once key projects are up and running, the company's regional vice president said on Wednesday.
Yanacocha, a joint venture between Newmont  and Peru's Buenaventura , is developing the $4.8 billion Minas Conga. It will be the largest investment in a Peruvian mine ever.

Gold Fields to produce 1 mln oz gold in S. America
AREQUIPA, Peru, Sept 14 (Reuters) - Gold Fields , the world's fourth-largest gold producer, aims to produce 1 million ounces of the precious metal per year in South America by 2015, the company's regional chief said on Wednesday.
Currently, just 10 percent of South African miner Gold Fields' output comes from South America, but it is moving ahead with key projects in the region.

20110915 1126 Global Market & Commodities Related News.

GLOBAL MARKETS-Global stocks, euro rise on Europe debt hopes
NEW YORK, Sept 14 (Reuters) - Global equities rallied and the euro rose on Wednesday as optimism over tentative steps to resolve Europe's debt crisis overcame still widespread fears that Greece will ultimately default on its debt.
"The focus today seems to be on whether or not Greece defaults, and the market is anticipating that the can will again be kicked down the road, avoiding a default," said Clark Yingst, chief market analyst at Joseph Gunnar & Co in New York.

Asia Stocks Rise From One-Year Low; Kiwi Falls (Bloomberg)
Asian stocks rose from a one-year low as German and French leaders said they’re certain Greece will remain in the euro zone. New Zealand’s dollar slid after the central bank held interest rates amid the risk of slowing global economic growth. The MSCI Asia Pacific Index rose 1.6 percent at 11:30 a.m. in Tokyo, rebounding from the lowest level since August 2010. Standard & Poor’s 500 Index futures rose 0.1 percent, indicating the U.S. stocks gauge will extend a three-day rally. The euro lost 0.2 percent to $1.3729 before a Spanish debt sale and the so-called kiwi dropped against all 16 major peers. Oil futures slipped a second day.
French President Nicolas Sarkozy and German Chancellor Angela Merkel said they’re convinced Greece will remain in the euro area after Greek Prime Minister George Papandreou committed to meet deficit-reduction targets. Spain plans to sell as much as 4 billion euros ($5.5 billion) of bonds today. Reserve Bank of New Zealand Governor Alan Bollard said there is now a greater risk the global economy will slow “sharply,” while data today may show U.S. inflation eased and industrial production stalled.

China Willing to Assist Debt-Crisis Nations: Zhang (Bloomberg)
China is willing to buy bonds from nations involved in the sovereign debt crisis, National Development and Reform Commission Vice Chairman Zhang Xiaoqiang said in an interview with the media in Dalian yesterday. China is willing to offer assistance, Zhang said without elaborating, adding that Premier Wen Jiabao made similar remarks earlier, according to a transcript distributed on the planning agency’s website yesterday evening. Caijing magazine attended the briefing and published an article earlier. Wen, speaking at the World Economic Forum in Dalian yesterday, signaled that that developed nations should cut deficits and open markets rather than rely on China to bail out the world economy. China can best contribute to the global economic recovery by ensuring steady growth at home, he said.

Crude Declines for a Second Day on U.S. Fuel Supplies, Economic Outlook (Bloomberg)
Oil dropped for a second day in New York as investors bet that increasing U.S. fuel stockpiles and signs of a weakening economy indicate demand will falter in the world’s biggest crude-consuming nation. Futures declined as much as 0.7 percent after an Energy Department yesterday showed gasoline supplies rose 1.94 million barrels last week, the biggest increase since June. U.S. data today may show industrial production stalled in August, according to a survey of economists by Bloomberg News. “The impact a weak U.S. economy is going to have on the oil price is probably largely factored in but if the outlook gets gloomier you’ll probably see more response there,” said David Land, head of analysis at CMC Markets Ltd. in Sydney.

Brent crude gains on euro zone optimism
NEW YORK, Sept 14 (Reuters) - Brent crude rose Wednesday on hopes the euro zone's debt crisis would ease, while U.S. oil futures fell following data showing a surprise increase in U.S. product inventories.
"The DOE data was a mixed bag and even though crude fell more than expected, the market has ignored that." said Andy Lebow, broker at MF Global in New York.

Brent expiry surges to subside as Libya oil returns
LONDON, Sept 14 (Reuters) - Surges in Brent crude oil for immediate delivery that since May have hit the market shortly before monthly futures contracts expire are based on tight supplies and are likely to subside as Libyan oil comes back on the market.
Such surges have become a regular feature of the market due to reduced supplies of oil related to Brent futures and the linked dated Brent physical market. They may also have been exaggerated by the popularity of trading the prompt spread.

Brazil's diesel shortfall to boost Asian market
SINGAPORE, Sept 14 (Reuters) - A diesel shortage in Brazil as refining capacity fails to keep pace with growing industrial demand will boost the country's imports of the fuel from Asia for at least the next two years, helping to mop up a regional surplus.
Growing competition for Asian supplies, coming at a time when fuel demand from China and India are expected to rise in line with their booming economies, will help tighten a market whose gains this year have been capped by high supplies.

French banks dial down Asian oil derivatives
SINGAPORE, Sept 14 (Reuters) - French banks have scaled back activity in the Asian oil swaps market this week, mainly in crude, traders said on Wednesday.
Counterparties and trading partners of Societe Generale , Credit Agricole  and BNP Paribas  told Reuters they were "watching developments" after credit downgrades for two of the banks and a negative outlook for the third.

Libya to begin exporting oil in 10 days - NOC
BENGHAZI, Libya, Sept 14 (Reuters) - Libya will begin exporting crude oil from the eastern port of Tobruk within ten days and could be producing 1 million barrels per day (bpd) within six months, the chairman of the National Oil Corporation (NOC) told Reuters on Wednesday.
The North African country badly needs revenues from its main industry to fund reconstruction after a nearly seven-month war, with violent clashes continuing between interim leaders and forces loyal to deposed leader Muammar Gaddafi.

S.Korea's Aug LNG imports nearly flat yr/yr
SEOUL, Sept 15 (Reuters) - South Korea's imports of liquefied natural gas (LNG) were almost unchanged in August from a year earlier, customs data showed on Thursday.
South Korea, the world's second-largest LNG buyer after Japan, imported 2.02 million tonnes of LNG last month, compared to 2.04 million tonnes the year before, Korea Customs Service data showed.

NYMEX-Natural gas ends up for second day, backed by cold
NEW YORK, Sept 14 (Reuters) - U.S. natural gas futures ended higher on Wednesday for a second day, with the first hint of cold this week stirring more technical buying despite mild extended forecasts, a soft economy and healthy supplies.
"People are starting to focus on the cold front moving into the Midwest and East. It should drive up demand and slow some storage injections this week," a Houston-based trader said.

Euro Coal-Prices drop another $1/T in active trade
LONDON, Sept 14 (Reuters) - Prompt physical coal prices fell by another $1.00 a tonne on Wednesday, having dropped steadily for the past few days on weak demand in Europe and Asia.
"There have been more sellers today, it's been fairly active and it's looking weaker every day," one European trader said.

COMMODITIES- Markets fret over Europe; US oil back under $90
NEW YORK, Sept 14, (Reuters) - U.S. crude oil fell on Wednesday, retreating from the previous session's five-week high, and many commodities saw subdued trading as investors remained on the sidelines due to Europe's debt crisis.
"The market is feeling very ambivalent," said Sterling Smith, futures analyst at Country Hedging in St Paul, Minnesota. "The dollar remains rather mixed and economic questions in broader markets have many traders pushing to the sidelines and not buying as aggressively as they might otherwise."

20110915 1114 Local & Global Economic Related News.

The government and Bank Negara Malaysia (BNM) will do everything, within their powers,  to create a conducive environment for financial sector growth, said PM Datuk Seri Najib  Tun Razak. "I want Malaysian banks to be out there  exploring potential, finding new  markets and new areas of growth," he said. The financial sector was resilient, dynamic,  competitive and strong, and had grown significantly to become a major contributor to the  country's GDP, he added. (Bernama)

The  demand for Malaysian products by China is still strong despite the increasing  inflation rate China, said Deputy Finance Minister Datuk Donald Lim Siang Chai. Demand  for conventional Malaysian products such as Liquefied Natural Gas (LNG), palm oil, timber,  electric and electronic products and rubber was still high, he noted. It is driven by demand  from the local industries. "This year, we expect China-Malaysia’s total trade to grow at a  rate of close to 20%,” he added.  "At the moment, there are no signs of decreasing imports  from Malaysia to China," he said. (Bernama)

US: Retail sales stall on lack of job growth
Retail sales in the US unexpectedly stagnated in August as a lack of employment and limited income growth restrained demand, highlighting the risk the economy will stall. The unchanged reading followed a 0.3% gain for July that was smaller than previously estimated, Commerce Department figures showed. Prices paid by producers were also unchanged in August, according to the Labor Department, while so-called core costs that exclude food and fuel rose less than forecast. Retailers like Best Buy Co. and Target Corp. are saying a struggling job market that has battered consumer confidence is hurting sales. The dim outlook for household spending, which accounts for about 70% of the economy, will make it harder for the two-year old recovery to gain speed, giving the Federal Reserve reason to take additional steps to spur growth. (Bloomberg)

US stocks rally as Germany, France express support for Greece
US stocks rose, sending the S&P 500 Index higher for a third day, as French President Nicolas Sarkozy and German Chancellor Angela Merkel said they are convinced Greece will remain in the euro zone. The S&P 500 gained 1.4% to 1,188.68, rallying 3% in three days and erasing its drop on 9 Sept, which had been driven by speculation Greece could default. The Dow Jones Industrial Average rose 140.88 pts, or 1.3%, to 11,246.73. German Chancellor Merkel is convinced the future of Greece is inside the euro area, following a telephone conversation with Prime Minister George Papandreou and French President Sarkozy. (Bloomberg)

The U.S. government’s budget deficit widened to US$134.2bn in Aug 11 (US$90.5bn in  Aug 10), according to the Treasury Department’s monthly budget statement. For the fiscal  year to date, the deficit increased to US$1.23tr, less than at the same point in 2010. The  Congressional Budget Office projected a shortfall of US$132bn in Aug 11. (Bloomberg)  

U.S. mortgage applications increased 6.3% from one week earlier, according to data  from the Mortgage Bankers Association’s survey for the week ended 9 Sep. Refinancing  was up 6%, while purchasing was up 7%. MBA said rates on 30-year fixed-rate mortgages  averaged 4.17%, down from 4.23%. (Wall Street Journal)  

U.S. wholesale prices were little changed in Aug as costs decreased  for energy and  automobiles. The producer price index was unchanged in Aug (+0.2% in Jul), Labor  Department figures showed. Economists projected no change. (Bloomberg)  

U.S. business inventories rose slightly less than expected in Jul, suggesting firms  remained cautious about future demand at the start of 3Q. Inventories climbed 0.4% in Jul  (+0.4% in Jun), the Commerce Department said. Economists had expected a rise of 0.5%  in Jul. (Bloomberg)  

A majority of Americans don’t believe President Barack Obama’s US$447bn jobs plan will  help lower the unemployment rate. The downbeat assessment of the American Jobs Act reflects a growing and broad sense of dissatisfaction  with the president. Americans  disapprove of his handling of the economy by 62% to 33%, a poll conducted 9-12 Sep  shows. (Bloomberg)  

U.S. Treasury Secretary Timothy F. Geithner will urge European governments to step  up their  crisis- fighting efforts amid Obama administration concerns that the region’s  woes may hurt the U.S. economy. Geithner will press European Union finance ministers  when he meets with them this week, a euroarea official said. The official spoke on  condition of anonymity because preparations for the meeting are confidential. (Bloomberg)  

Japan's industrial output rose 0.4% in Jul (3.8% in Jun), revised data showed, confirming  that the recovery from the Mar earthquake is losing steam as a surging yen and slowing  global demand cloud the outlook. (Reuters)  

Japan: S&P cuts growth forecast to near zero after quake
Standard & Poor’s cut its forecast for Japan’s economic growth and said the rebound from the 11 March earthquake is likely to be “less robust” than expected. Expansion in gross domestic product this year will be close to zero, compared with a pre-quake estimate of 1.3%, the ratings company said. Recent data suggest the rebound from the disaster has been weakening, with industrial production growth slowing and retail sales dropping. The government has been slow in responding to the crisis, which also spurred a nuclear accident that has curbed the nation’s electricity supply, the ratings company said. (Bloomberg)

UK: Public jobs fall by record as government cuts spending
UK public-sector employment fell by a record in the second quarter, offsetting a gain in hiring by companies, as the government cuts spending to reduce the budget deficit. Public-sector payrolls plunged 111,000 in the three months through June, while private-sector employment rose 41,000, the Office for National Statistics said today in London. In August, jobless-benefit claims increased 20,300. While that was less than the 35,000 median forecast of 23 economists in a Bloomberg News Survey, it’s a sixth straight increase and pushes the claims total to the highest since January 2010. (Bloomberg)

Eurozone industrial production  rebounded in Jul, driven by a surge in Germany, the currency area's manufacturing powerhouse. The Eurostat said industrial production rose  by 1% mom in Jul (-0.8% in Jun). On a yoy basis, industrial production rose 4.2% (+2.6%  in Jun). Economists estimated that output rose 1.5% mom and 4.7% yoy in Jul. (Wall Street Journal)  

European banks are  losing deposits as savers and money funds spooked by the  region’s debt crisis search for havens, a trend that could worsen economic and financial  conditions. Retail and institutional deposits at Greek banks fell 19% in the past year and  almost 40% at Irish lenders in 18 months. Meanwhile, European Union financial firms are  lending less to one another and U.S. money-market funds have reduced their investments  in German, French and Spanish banks. (Bloomberg)  

European policy makers are not living up to their commitment to the euro as the region’s  debt crisis threatens to spread, World Bank President Robert Zoellick said. “It is not  responsible for the eurozone to pledge fealty to a  monetary union without facing up to  either a fiscal union that would make monetary union workable or accepting the  consequences for uncompetitive, debt-burdened members,” Zoellick said. “We must all be  responsible stakeholders now,” he said. (Bloomberg)  

The European Central Bank said it will lend dollars to two euroarea banks, a sign they  are finding it difficult to borrow the U.S. currency in markets. The ECB allotted US$575m in  a regular seven-day liquidity-providing operation at a fixed rate of 1.1%. It’s the first time since 17 Aug that a lender requested dollars from the ECB. (Bloomberg)  

The  ADB revised down its  growth forecast for the region to 7.5% for the year (7.8%  previously). That cut was prompted by worsening economic conditions in developed  nations that are weighing on export-focused Asian economies. But private consumption will  cushion Asian economies from the worst of the global slowdown. (Wall Street Journal)  

Bank Indonesia intervened to curb losses in the rupiah, while traders said authorities in  India and  South Korea also sold dollars, a sign Europe’s debt crisis is undermining  confidence in Asian emerging markets. (Bloomberg)  

Indonesia’s central bank signalled it may join Brazil and Turkey among emerging  markets cutting interest rates as Europe’s debt crisis threatens Southeast Asia’s biggest  economy. (Bloomberg)  

India’s inflation accelerated to the highest level in more than a year, maintaining pressure  for further interest-rate increases even as economic growth slows. The benchmark  wholesale-price index rose 9.78% yoy in Aug after a 9.22% jump in Jul. Economists had  forecast a 9.64% gain. (Bloomberg)

20110915 1112 Malaysia Corporate Related News.

Proton and Mitsubishi to collaborate on manufacturing
Proton and Mitsubishi Motors are close to signing a working agreement which will entail the Japanese automaker utilizing Proton’s production facility in Tanjung Malim, Perak, sources said. The tie-up is said to give Mitsubishi access to Proton’s plant in Tanjung Malim for export to the Asean region. Sources also said both car manufacturers are looking to form a JV company to manufacture small vehicles, although the precise shareholding structure is currently uncertain. Proton is believed to be taking up a controlling stake. (Financial Daily)
Proton Holdings’ global compact electric and hybrid car, Emas, could enter the market in  two to three years, its chairman, Datuk Seri Mohd Nadzmi Mohd Salleh, said. Emas, short  for Eco Mobility Advance Solution, is a plug-in electric vehicle (EV) or hybrid Range  Extender Electric Vehicle (REEV). The compact car’s powertrain could include a  turbocharged small engine of 1.2-litre capacity, or lower. Proton is currently fleet-testing the  Exora REEV and Saga EV to assess their potential (BT)

Gas Malaysia plans 334m shares in IPO
MMC Corp’s subsidiary Gas Malaysia is offering 334.84m ordinary shares of RM0.50 each in its IPO. This represents 26% of the existing issued and paid-up share capital of the company. Its institutional offering would consist of 147.68m shares to be offered to bumiputra institutional and MITI investors and 155.8m shares to be offered to institutional and selected investors. The retail offering will consist of 4.66m shares to be offered to eligible directors and employees, and 25.68m shares to be offered to the public. (StarBiz)

Alstom signs 11-year contract with Malakoff
French engineering company Alstom has signed a 11-year long-term service agreement worth about EUR150m (RM633m) with Malakoff’s operations and maintenance company, Teknik Janakuasa SB (TJSB). The agreement covers all nine GT13E2 gas turbines and the scope includes the supply of new hot gas path components and provision of reconditioning services for all major inspections over the term of the contract. The contract follows an earlier 7-year service agreement with TJSB for the Lumut plant, which has been in operation since 2004. (Malaysian Reserve)

The current political and economic uncertainties may present opportunities in the future for  the banking world, especially for Asian banks, and CIMB Group is looking to capture them.  CIMB Group CEO,  Datuk Seri Nazir Razak said with what has happened in the Middle  East, within a year or so, it is going to be an exciting time to relook at the Middle East.
• Another region which Nazir said is a growth potential for Asian banks is the UK. The  recent proposed changes to UK banks as announced in a Vicars report would make UK  banks less competitive. (Financial Daily)  

CIMB Group Holdings has reiterated that it is not looking to buy smaller rival RHB Capital at this time. "I don't think RHB is on the table at this time," chief executive officer Datuk Seri  Nazir Razak told reporters. (BT)  

Khazanah Nasional Bhd's divestment plan for its  GLCs  is on track, says managing  director Tan Sri Azman Mokhtar. "We have identified the assets to be divested but the right  timing is crucial," he said. Azman declined to say when further divestments would be made  but explained that Khazanah had been divesting "in  quite a disciplined way". "We have  been divesting but plans can change. We need to be flexible and do this at the right time.  We have to be fleet-footed," he said. (Starbiz)  

Khazanah is waiting for more clarity on the financial and business model of  AirAsia X before it agrees to acquire a 10% stake in the airline. Khazanah wants more clarity on  AirAsia X’s plans, their timeline and how they want to evolve, when there will be an IPO  and also on the business model. (Star Biz)  

Khazanah has defended the collaboration agreement between MAS and AirAsia signed a  month ago, calling the decision a “necessary” move. Managing director,  Tan Sri Azman  Mokhtar acknowledged that the collaboration was not sufficient on its own to turnaround  MAS, but deemed it beneficial for both airlines.
• Azman cited route network, returns and management performance as areas of focus for  the collaboration to bear fruit. (Star Biz)

A Malaysian Airlines (MAS) workers’ union, which had earlier threatened to picket over  the airlines’ share swap deal has put the plan on hold until they are thoroughly briefed over  the matter. The announcement came after a two-hour  meeting between MAS Chairman  Tan Sri Mohd Nor Yusof and the  Malaysian Airlines System Employees’ Union (Maseu) which represents 15,000 of the company’s staff members. (Star Biz)

OSK Investment Bank stake in OSK Securities (Thailand) Public has risen to 97.28%  upon acceptance by shareholders to its mandatory tender for all the remaining shares.  (Malaysian Reserve)  

Glomac 90%-owned subsidiary, Glomac Thailand has proposed to dispose its entire 49%  equity interest comprising 15.1m shares held in  Thai’s WHA Glomac Alliance to WHA  Corp for approximately RM30.9m. The proposed disposal is expected to be completed by  end of September 2011. (Malaysian Reserve)  

Bandar Raya Development (BRDB) has received a letter of offer from its major shareholder Ambang Sehati to buy the former’s assets at the price to be determined later.  Ambang Sehati is keen to buy the company’s prime asset Bangsar Shopping Complex,  CapSquare Retail Centre in KL and Permas Jusco Mall in Johor. These properties carry a  total value of RM942m based on a revaluation exercise that was carried out at endDecember 2010. (Financial Daily)

Reinsurer MNRB Holdings says it will continue to look for a suitable partner following the  fallout of the stake sales of its subsidiary Takaful Ikhlas to composite insurer  Allianz  Malaysia. According to news report, MNRB was mulling disposing up to 49% of Takaful  Ikhlas. (Malaysian Reserve)  

Mamee-Double Decker has sealed a sponsorship agreement with English Premier  League champions Manchester United. The agreement is to be signed this week and is expected to contribute to Mamee-Double Decker's global presence and to its export sales.  Mamee-Double Decker expects to see export sales contribution improve to as much as  50% from some 30% currently over the next few years on the back of its sponsorship deal, said business development manager Vuitton Pang. "It is a three-year agreement with the  English soccer club," he said. (Financial Daily)  

BHPetrol is aiming to open between 8-10 new service stations every year with an annual  investment of RM50m. There are 312 stations in Peninsular Malaysia but there was no  plan in the pipeline to venture into Sabah and Sarawak at the moment. (Bernama)  

Notion VTec is looking for interested parties to purchase the entire 70% equity interest it  holds in Swiss Impression on an “as is where” basis. Due to the uncertainty of Swiss’s  future financial performance as well as the challenging outlook and prospects of the  industry in which Swiss operates in, the board of Notion has decided to dispose of Swiss.  (Malaysian Reserve)    

The  Malay Mail announced a strategic change in its business model – from a free  afternoon daily to a paid morning newspaper. The paid morning paper will be launched  within the next few weeks. (Malaysian Reserve)  

The Securities Commission (SC) is still reviewing circumstances surrounding  Sime  Darby's acquisition of a 30% stake in  Eastern & Oriental (E&O). "We will make the  announcement in due time. There is nothing to add," SC chairman Tan Sri Zarinah Anwar  said. (BT).

20110915 1047 Renewable Energy Related News.

MOLYCORP INVESTS IN WIND ENERGY TECHNOLOGY COMPANY
Sept 13  (Reuters) - Molycorp Inc , the largest U.S. producer of rare-earth metals, said it invested in Boulder Wind Power in a deal that gives it board representaion and makes it the preferred supplier of rare earth materials to the wind turbine maker.  
Boulder Wind has developed a technology to make rare earth permanent magnets without dysprosium, a relatively scarce rare earth. This could lower the cost of producing power and allow it to compete directly with fossil fuel-based power generation.

US DOE FINALIZES LOAN AID FOR ABENGOA SOLAR PROJECT
WASHINGTON, Sept 13 (Reuters) - The U.S. Energy Department on Tuesday said it has finalized a $1.2 billion loan guarantee for a solar project sponsored by Abengoa Solar Inc .
The Mojave Solar Project, located in San Bernardino County, California, is supposed to help create more than 900 construction and permanent operations jobs.

BROOKFIELD TO CREATE RENEWABLE ENERGY HEAVYWEIGHT
VANCOUVER, Sept 13 (Reuters) - Brookfield Asset Management  said on Tuesday it will merge the power generating assets of one of its units with Brookfield Renewable Power Fund  to form one of the world's largest, listed renewable power businesses.
The combination of Brookfield Renewable Power Fund with the power assets of Brookfield Renewable Power Inc will create a business with 4,400 megawatts of installed power-generating capacity in Canada, the United States and Brazil.

JAPAN PLANS FLOATING WIND POWER FOR FUKUSHIMA COAST
TOKYO, Sept 13 (Reuters) - Japan will join the race to develop floating wind turbines to use in deepwater off its tsunami-stricken northern Pacific coast as it rethinks energy sources after the Fukushima nuclear disaster.
It aims to outpace the leaders in the sector in Europe, trade ministry official Masanori Sato said on Tuesday.

HIGH WINDS LEAD UK TO HALT TURBINES FOR 3RD NIGHT
LONDON, Sept 13 (Reuters) - Britain's energy network operator National Grid  stopped a number of wind turbines in Scotland for a third consecutive night on Monday, the operator said, as high winds threatened to cause an overload in power output and block the grid.
"There was some curtailment again last night due to high wind generation and low demand - 650 MW (megawatts), about 13 wind farms," a spokesman for National Grid said.

SAMSUNG, PATTERN BUY ONTARIO WIND PROJECT
TORONTO, Sept 12 (Reuters) - South Korea's Samsung  and Pattern Energy Group have acquired a wind power project in Ontario for an undisclosed price.
The companies, which bought the project from Spain's Acciona , will increase the planned capacity of the Armow project in Kincardine, Ontario, to 180 megawatts. Construction will begin in 2013 and finish the next year.

UK SHUTS DOWN WIND TURBINES AS STORM KATIA HITS
LONDON, Sept 12 (Reuters) - Britain's energy network operator National Grid  may need to shut down a number of wind power farms on Monday night as strong winds threaten to overload the transmission system with electricity at times when demand is low, a spokesman said.
"If we've got constraints and too much generation we'll go back in there. Nothing (is decided) yet today but if it stays this windy, we may have to look at it," he said.

CZECHS FACE HIGHER POWER PRICES DUE TO SOLAR RISE
PRAGUE, Sept 9 (Reuters) - Czechs face higher electricity bills starting in 2013 due to a bigger-than-expected jump in solar power production, according to the country's energy regulator.
An Energy Regulatory Office spokeswoman said on Friday that as a result of the higher solar production so far this year consumers would need to pay out an extra 3.7 billion Czech crowns ($207 million) in 2013 to cover incentives guaranteed to generators.

ITALY TOTAL SOLAR CAPACITY TO HIT 12,000 MW END-2011-GSE
MILAN, Sept 8 (Reuters) - Italy, a major solar market in the world, is expected to boost its total installed photovoltaic capacity to 12,000 megawatt at the end of 2011 fuelled by generous production incentives, Italy's energy services agency GSE said on Thursday.
Italy's total installed photovoltaic (PV) capacity -- which turns sunlight into power -- has already exceeded 10,000 MW with about 6,500 MW that have come on stream so far this year, Italy the world's top market in terms of new capacity installed in 2011, GSE said in a statement.

GERMAN SOLAR INCENTIVES FACING BIG CUT-SOURCES
BERLIN, Sept 7 (Reuters) - A pick-up in solar panel installations in Germany in recent months is likely to cut industry incentives more than expected next year, government and industry sources said on Wednesday.
About 1,250 megawatts (MW) of solar power capacity was installed in June and July, more than in the first five months of the year combined, two people familiar with the figures told Reuters on Wednesday.

20110915 1046 Biofuel Related News.

ETHANOL INDUSTRY TO STAY HUNGRY FOR U.S. CORN
KANSAS CITY, Mo., Sept 14 (Reuters) - The U.S. ethanol industry is keeping its foot on the gas pedal at production plants and if the trend continues it could defy a government forecast that the industry will have its first drop in corn use since the turn of the century.
The government forecast, which was issued on Monday, was based on expected weaker gasoline use and higher corn prices. Ethanol is blended with gasoline. In addition, some analysts said the expiration of an industry tax credit at the end of the year could also eat into profits.

BIOENERGY TARGETS BASED ON FLAWED SCIENCE -REPORT
BRUSSELS, Sept 14 (Reuters) - Existing targets for biofuels and other forms of bioenergy are based on flawed carbon accounting and should be revised downwards, a draft report by a panel of 19 top European scientists showed.
"It is widely assumed that bioenergy is inherently carbon-neutral. However, this assumption is flawed," said the Scientific Committee of the European Environment Agency, the European Union's environment watchdog.

BRAZIL 2011 ETHANOL IMPORTS TO TOP 1 BLN LTS-UNICA
SAO PAULO, Sept 12 (Reuters) - Brazil will import 1.1 billion liters of anhydrous ethanol in the 2011/12 season (April-March) to meet increasing local demand and to cover local supply shortfalls, sugar cane industry association Unica said on Monday.
The world's second largest ethanol producer, after the United States, imported 78 million liters of the fuel in the previous season.

USDA TRIMS CORN USE FOR ETHANOL TO 5 BLN BU IN 11/12
WASHINGTON, Sept 12 (Reuters) - Ethanol makers will use slightly less corn to make the renewable motor fuel as higher corn prices and lower gasoline use curtail demand, the U.S. government said Monday.
The U.S. Agriculture Department lowered its estimate of corn used to produce the renewable fuel to 5 billion bushels in 2011/12, down 100 million bushels, or 2 percent, from 5.1 billion bushels forecast during August. The estimate was nearly in-line with usage during 2010/11 when 5.020 billion bushels were used to produce ethanol.

US ETHANOL OUTPUT BUMPS HIGHER, EXPORTS STRONG
KANSAS CITY, Mo., Sept 8 (Reuters) - U.S. ethanol production rose slightly in the last week but stocks decreased as export demand for the corn-based alternative fuel increased.
The Energy Information Administration said on Thursday that U.S. ethanol production totaled 896,000 barrels per day in the seven days to Sept. 2, up 8,000 barrels per day from the previous week.

EU TO DELAY ACTION ON BIOFUELS' INDIRECT IMPACT
BRUSSELS, Sept 8 (Reuters) - The European Union's top climate and energy officials have agreed to delay by up to seven years rules that would penalise individual biofuels for their indirect climate impacts, according to minutes of a meeting, seen by Reuters.
The political compromise is designed to protect EU farmers' incomes and existing investments in the bloc's 17 billion euro-a-year ($24 billion) biofuel sector, while discouraging new investments in biofuels that do nothing to fight climate change.

PETROCHINA PLANS TO BOOST BIOFUELS CAPACITY
TIANJIN, China, Sept 8 (Reuters) - PetroChina  plans to add 1.1 million tonnes of biofuels production capacity and import 470,000 tonnes of those fuels by 2015, a company official said on Thursday, as the oil firm aims to tap more alternative energy sources.
Of the planned production capacity, fuel ethanol will be 933,000 tonnes a year and biodiesel will be 165,000 tonnes a year, Fu Xingguo, deputy chief engineer of PetroChina's Petrochemical Research Institute, said at an industry conference.

20110915 1045 Global Market Related News.

GLOBAL MARKETS-EU bond comments lifts European shares, euro
LONDON, Sept 14 (Reuters) - European shares rose and the euro pared losses on Wednesday after the head of the European Commission said it would soon present options for the introduction of euro area bonds, offering a glimmer of hope for an easing of the sovereign debt crisis.
"It (Barroso) could be a turning point and a major step forward as countries with higher debt levels will have the ability again to finance themselves," said Klaus Wiener, chief economist at Generali Investments, which manages 330 billion euros ($451 billion).  

European stocks, euro reverse losses
LONDON, Sept 14 (Reuters) - European shares turned positive and the euro pared losses  after the head of the European Commission said it would soon present options for the introduction of euro area bonds.
"A lack of leadership is really a matter of concern for the market. A lot of worries are now focussed on Germany in terms of splits there on how to deal with the region's debt crisis," said Keith Bowman, equity analyst at Hargreaves Lansdown.

Asian Stocks Rise as Germany, France Say Greece’s Future is in Euro Area (Source: Bloomberg)
Asian stocks climbed, with the regional benchmark index rebounding from its lowest in more than a year, after French President Nicolas Sarkozy and German Chancellor Angela Merkel said Greece will stay in the euro area. Commonwealth Bank of Australia (CBA), the nation’s largest lender by market value, jumped 2.5 percent in Sydney. Samsung Electronics Co., which receives 20 percent of its revenue from Europe, rose 3.3 percent in Seoul. BHP Billiton Ltd. (BHP), the world’s biggest mining company by market value, rallied 1.9 percent after copper prices gained. Chipmaker Elpida Memory Inc. (6665) surged 7.3 percent in Tokyo after saying it may shift some domestic production overseas to counter a strong yen.
“Germany and France’s commitment to continue supporting Greece’s European Union membership diminishes the likelihood that it will be allowed to default,” said Tim Schroeders, who helps manage $1 billion in equities at Pengana Capital Ltd. in Melbourne. “If Greece avoids default, it lessens any flow-on impact through the global banking system, which in turn is positive for Asian stocks.”

U.S. Stocks Rally as French, German Leaders Express Support for Greece (Source: Bloomberg)
U.S. stocks rose, sending the Standard & Poor’s 500 Index higher for a third day, as French President Nicolas Sarkozy and German Chancellor Angela Merkel said they are convinced Greece will remain in the euro zone. All 10 groups in the S&P 500 advanced. General Electric Co. (GE), Home Depot Inc. (HD) and Monsanto Co. (MON) rose at least 2.4 percent, pacing gains in companies most-tied to economic growth. The Dow Jones Transportation Average, a proxy for the economy, added 2 percent, as FedEx Corp. (FDX) climbed 1.4 percent. Dell Inc. advanced 3.3 percent as the second-largest personal-computer maker approved an additional $5 billion for its stock repurchases.
The S&P 500 gained 1.4 percent to 1,188.68 at 4 p.m. New York time, rallying 3 percent in three days and erasing its drop on Sept. 9, which had been driven by speculation Greece could default. The index pared a gain of as much as 2.5 percent in the final minutes of trading today. The Dow Jones Industrial Average rose 140.88 points, or 1.3 percent, to 11,246.73.

U.S. Retail Sales Stall on Lack of Job Growth (Source: Bloomberg)
Retail sales in the U.S. unexpectedly stagnated in August as a lack of employment and limited income growth restrained demand, highlighting the risk the economy will stall. The unchanged reading followed a 0.3 percent gain for July that was smaller than previously estimated, Commerce Department figures showed today in Washington. Prices paid by producers were also unchanged in August, according to the Labor Department, while so-called core costs that exclude food and fuel rose less than forecast. Retailers like Best Buy Co. and Target Corp. (TGT) are saying a struggling job market that has battered consumer confidence is hurting sales. The dim outlook for household spending, which accounts for about 70 percent of the economy, will make it harder for the two-year old recovery to gain speed, giving the Federal Reserve reason to take additional steps to spur growth.

U.S. Equities Will Stall on Slow Economic Growth, Yardeni Says: Tom Keene (Source: Bloomberg)
U.S. stocks will stay at current levels in 2011 as companies struggle to beat analyst estimates amid slower economic growth, according to Edward Yardeni, chief investment strategist at Yardeni Research Inc. “For the S&P 500, I don’t expect we will cover much ground when we look at the trend over the rest of the year,” Yardeni said in an interview on Bloomberg Radio’s “Bloomberg Surveillance” with Tom Keene and Ken Prewitt. “The main reason is that earnings estimates are just too high,” he said. “For the past nine quarters, industry analysts were too low and there were lots of positive surprises. That’s going to be a little more challenging going into the upcoming earnings season.”
S&P 500 earnings are poised to reach a record $99.74 a share this year, according to the average of securities industry estimates compiled by Bloomberg, after companies beat projections for 10 straight quarters. Analysts are more optimistic about earnings since the S&P 500 peaked at a three- year high on April 29, driving their forecast up from $98.73 a share that day.

Wholesale Prices in U.S. Are Little Changed as Energy, Vehicle Costs Drop (Source: Bloomberg)
Wholesale prices in the U.S. were little changed in August as costs decreased for energy and automobiles. The producer price index was unchanged after a 0.2 percent increase in July, Labor Department figures showed today in Washington. Economists projected no change, according to the median estimate in a Bloomberg News survey. The so-called core measure, which excludes volatile food and energy, rose 0.1 percent, less than forecast. Slowing growth overseas and in the U.S. is helping restrain raw-material costs, underscoring Federal Reserve Chairman Ben S. Bernanke view that price gains are “transitory.” Cooling prices make it easier for policy makers to take additional steps when they meet next week to keep the economy expanding.

Treasury 10-Year Yields Head for Weekly Gain on Europe Optimism (Source: Bloomberg)
Treasury 10-year note yields were poised for a weekly advance as Asian equities rose after Germany and France signaled a commitment to keeping Greece in the euro area, damping demand for the safest assets. Benchmark bond yields were 11 basis points from a record low as Greek Prime Minister George Papandreou pledged to meet deficit-reduction targets demanded as a condition for an international bailout, according to statements from governments in Athens, Berlin and Paris. The Federal Reserve is today scheduled to purchase up to $3.5 billion of Treasuries. “Equity markets have recovered with a decent bounce and bond yields have gone back up toward the 2 percent mark,” said Grant Hassell, head of fixed income at AMP Capital Investors in Wellington, New Zealand. “This will be temporary and we will see long-end Treasury yields drift back down again and equities will remain volatile. There is no easy silver bullet solution to the issues facing the globe at the moment.”

Wen Says World Must Cut Debt, Stem Euro Crisis as Pressure Grows on China (Source: Bloomberg)
Chinese Premier Wen Jiabao, facing calls to widen support for indebted European countries, signaled that developed nations should cut deficits and open markets rather than rely on China to bail out the world economy. “Countries must first put their own houses in order,” Wen said today at the World Economic Forum in the Chinese city of Dalian. “Developed countries must take responsible fiscal and monetary policies. What is most important now is to prevent the further spread of the sovereign debt crisis in Europe.” China can best contribute to the global economic recovery by ensuring steady growth at home, Wen said, calling on the European Union and U.S. to allow more Chinese investment in return. Stocks dropped in Asia as the comments damped optimism that China would help stabilize the euro region, after Italy this month followed Spain, Portugal and Greece in seeking investment from the world’s fastest-growing major economy.

Japanese Stocks Advance as Germany, France Express Support for Greece (Source: Bloomberg)
Japanese stocks rose, with the Nikkei 225 (NKY) Stock Average headed for its biggest gain in a week, after German and French leaders said they are convinced Greece will remain in the euro zone and speculation grew that China may help the region’s most-indebted nations. Mitsubishi UFJ Financial Group Inc. (8306), Japan’s largest publicly traded lender, gained 1.2 percent. Sony Corp. (6758), which depends on Europe for more than 20 percent of its sales, climbed 1.7 percent after the euro appreciated against the yen, boosting the exporter’s earnings outlook. Toyota Motor Corp. (7203), the biggest carmaker by market value, advanced 1.3 percent. The Nikkei 225 rose 1.6 percent to 8,653.92 as of 9:24 a.m. in Tokyo, set for its biggest increase since Sept. 7. The broader Topix added 1.3 percent to 751.31, with about 10 shares rising for each that fell.

Korea Finance Offers Samurais as Yields Diverge From World: Japan Credit (Source: Bloomberg)
Korea Finance Corp., the state- owned financier, is poised to tap Japan’s debt market, where the relative cost to borrow is the lowest since February 2009 compared with the rest of the world. Formed in 2009, Korea Finance will offer so-called Samurai bonds today, selling 30 billion yen ($391 million) of securities, a person with direct knowledge of the matter said. Sales of yen-denominated debt by Korean borrowers have more than doubled to a record 245 billion yen this year from the same period in 2010, data compiled by Bloomberg show. Foreign borrowers are able to raise cash in Japan at yields averaging 112 basis points more than benchmarks, compared with 246 in the global corporate bond market, Bank of America Merrill Lynch indexes show. The difference of 134 basis points has expanded from 43 in April as investors assigned a higher risk to holding debentures outside Japan while the global economic recovery slows and the fiscal crisis in Europe deepens.

Indonesia Joined by India, South Korea in Intervening to Buoy Currencies (Source: Bloomberg)
Indonesia’s central bank intervened to curb losses in the rupiah, while traders said authorities in India and South Korea also sold dollars, a sign Europe’s debt crisis is undermining confidence in Asian emerging markets. Bank Indonesia “intervened in the rupiah and bond markets,” Deputy Governor Hartadi Sarwono said in an interview in Jakarta. The Reserve Bank of India sold the greenback as the rupee weakened beyond 48 per dollar for the first time since 2009, a Mumbai-based trader at a state-owned bank said, declining to be identified because he isn’t authorized to speak to the media. The Asian Development Bank cut its 2011 growth forecast for Asia excluding Japan today to 7.5 percent from 7.8 percent on signs a global economic recovery is faltering. Greece’s budget deficit widened 22 percent in the first eight months of the year, fanning speculation the country will fail to meet conditions for further bailout funds.

European Stocks Advance Amid Speculation China May Buy Euro Region Bonds (Source: Bloomberg)
European stocks rose for a second day amid speculation China may still buy the region’s government bonds even after Premier Wen Jiabao said indebted countries must not rely on bailouts. Finmeccanica SpA (FNC) soared the most in 13 years on a report that Italy’s biggest arms company may sell railway units to General Electric Co. Next Plc (NXT) rallied to a record as earnings increased. Societe Generale (GLE) SA slid 2.9 percent after Moody’s Investors Service downgraded the French bank’s credit rating. The benchmark Stoxx Europe 600 Index advanced 1.5 percent to 224.17 at the 4:30 p.m. close in London. The gauge erased an earlier loss of as much as 1 percent after Caijing magazine reported that China is still willing to buy bonds of nations hit by the debt crisis, citing Zhang Xiaoqiang, a vice chairman of the National Development and Reform Commission.

Sarkozy, Merkel ’Convinced’ Greece to Stay in Euro (Source: Bloomberg)
French President Nicolas Sarkozy and German Chancellor Angela Merkel said they are “convinced” Greece will stay in the euro area as they faced international calls to step up efforts in fighting the region’s debt crisis. The euro rose after the leaders of Europe’s two biggest economies issued a statement yesterday following a telephone conversation with Greek Prime Minister George Papandreou. Papandreou committed to meet deficit-reduction targets demanded as a condition for an international bailout, according to statements from governments in Athens, Berlin and Paris. The remarks were “a good thing,” said John Doyle, a strategist in Washington at currency-trading firm Tempus Consulting Inc. “They’re just words at this point, but that’s why we’re seeing the euro pop against the dollar.”

BOE’s Posen Steps Up Push for Stimulus as Bond-Purchase Debate Intensifies (Source: Bloomberg)
Bank of England policy maker Adam Posen’s signal that he may need to double his call for bond purchases will intensify the debate at the U.K. central bank for more stimulus as the economy falters. Posen said yesterday the central bank may need to buy as much as 100 billion pounds ($158 billion) in securities within three months and warned that officials’ delay in acting has made economic prospects “worse.” He has voted since October for a 50 billion-pound increase in the bond plan. Posen’s attempt to convince his colleagues on the Monetary Policy Committee that they are damaging the economy by doing nothing comes as central banks from the Federal Reserve to the Swiss National Bank seek new ways to bolster their recoveries. He has been the sole voice on the MPC voting for more so-called quantitative easing, and minutes of this month’s meeting on Sept. 21 will show if anyone else joined him.

U.K. Stocks Advance for a Second Day as Next, Kingfisher Shares Increase (Source: Bloomberg)
U.K. stocks rose for a second day as Next Plc (NXT) reported a jump in first-half earnings and investors speculated that the slump in shares during the past two months isn’t commensurate with the outlook for companies’ earnings. Next posted its steepest advance in a year after the U.K.’s second-largest clothing retailer increased its annual profit forecast. Kingfisher Plc (KGF) climbed 2.4 percent. The benchmark FTSE 100 Index (UKX) rose 52.77, or 1 percent, to 5,227.02 at the 4:30 p.m. close in London. The gauge last month slumped 7.2 percent, dragging equities to their cheapest valuation compared with estimated earnings since March 2009, according to data compiled by Bloomberg. The FTSE All-Share Index also gained 1 percent today, while Ireland’s ISEQ Index advanced 1.9 percent.

Swiss 1970s Inflation Specter Seen in Central Bank’s Unlimited Franc Sales (Source: Bloomberg)
Swiss central bank President Philipp Hildebrand’s pledge to protect the economy with unlimited currency purchases may come at a higher cost than billions of francs: faster inflation. Hildebrand’s decision risks flooding the financial system with cash and undermining the Swiss National Bank’s job of delivering price stability, said economists at Credit Suisse Group AG and Barclays Capital. While central banks around the globe are seeking to ward off a recession through additional stimulus or rate cuts, the franc’s ascent forced Swiss policy makers into measures that sparked a decade of surging inflation when last introduced in the 1970s. “You can’t have your cake and eat it,” said Claude Maurer, an economist at Credit Suisse in Zurich. “You can either pursue a ceiling on the exchange rate or you can fight price pressures. The SNB apparently sees medium-term inflation threats as the lesser of two evils.”

Spain Faces Rating Risks on ‘Downside’ as Regions Lag Targets, Fitch Says (Source: Bloomberg)
Spain faces risks “on the downside” to its credit rating as growth slows and regional governments fall behind schedule on deficit-reduction targets, Fitch Ratings Director Douglas Renwick said.  “Risks for the credit rating are clearly on the downside,” London-based Renwick said in a telephone interview yesterday. “The regional deficit performance adds to pressure on the central government to make the needed cuts.” Fitch rates Spain AA+ with a “negative” outlook, and Renwick said weaker growth, failure to meet deficit targets, or larger-than-forecast use of public funds to rescue banks could be “clear triggers for the rating.” The company cut the ratings of five Spanish regions today, including Catalonia and Andalusia, citing a surge in debt and weak growth prospects.

Borrowings by Spanish Banks From ECB Surged to $96 Billion in August (Source: Bloomberg)
Spanish banks increased their borrowings from the European Central Bank in August, a month in which the ECB began buying bonds from Spain and Italy to curb Europe’s sovereign-debt crisis. Net ECB borrowings surged to 69.9 billion euros ($95.5 billion), an 11-month-high, from 52.05 billion euros in July, the Bank of Spain said on its website today. Divisions among European governments over how to tackle the region’s debt crisis have helped drive up borrowing costs for banks from countries including Spain and Italy, narrowing their access to the wholesale debt markets they need to fund their business. Investors monitor bank use of ECB borrowings to gauge pressure on their ability to tap financing from other sources.

Swan Restricts Central Bank in Setting Salaries (Source: Bloomberg)
Australia’s central bank, which pays its governor more than Federal Reserve Chairman Ben S. Bernanke and European Central Bank PresidentJean-Claude Trichet combined, will for the first time lose its sole power to set compensation for its board and executives, Treasurer Wayne Swan said. The salaries at the Reserve Bank of Australia will be fixed within benchmarks that exist in the Remuneration Tribunal, a body that decides how much politicians and civil servants earn, Swan said. The independent authority determines, reports on or provides advice about pay, including allowances and entitlements for federal lawmakers, judicial and non-judicial offices of federal courts and tribunals.
“I’ve put in place a set of arrangements that mean that future decisions taken about those salaries will be in the context of other salaries paid to comparable people in the public sector,” Swan, 57, said in an interview in Canberra yesterday. “I have taken that action so that when the board takes its decision, it takes its decision within a framework set by government.”

N.Z. Delays Rate Rise During Global Slowdown (Source: Bloomberg)
New Zealand’s central bank left interest rates unchanged and signaled no urgency to raise them until the global recovery strengthens, weakening the local currency it called overvalued. “The exchange rate is significantly penalizing some activity in the traded sector, hurting some New Zealand firms and that’s a medium-term effect not a short-term effect,” Governor Alan Bollard told reporters in Wellington today after leaving the official cash rate at 2.5 percent. New Zealand’s currency, the best performer among 16 major counterparts tracked by Bloomberg, fell after the statement as investors reduced bets on a rate rise this year. Bollard said there is now greater risk that global economic activity slows “sharply,” and he wants to be sure that won’t occur before contemplating a rate increase.

20110915 1042 Global Commodities Related News.

Corn (Source: CME)
US corn futures end slightly higher, rebounding from early losses amid supply worries. Forecasts calling for freezing temperatures in the northwest corn belt underpinned the market, as traders say supplies are too tight to lose some of this year's crop to a cold snap. A rebound in equities added to the support, as corn shook off early losses. Questions about demand at historically high prices limited the upside, traders say. Sep CBOT corn end up 3 3/4c to $7.13 a bushel while Dec, the most active contract, ends up 1 1/4c to $7.24 1/4.

Wheat (Source: CME)
US wheat futures end mixed, with CBOT wheat rebounding slightly after falling to a one-month low Tuesday. Prices were supported by a rebound in equities. Kansas City wheat sagged, however, on forecasts calling for rain in the southern US Plains, which will aid planting in the drought-ravaged reason. Poor export demand has loomed over the market, as buyers choose Russian wheat instead of US. Dec CBOT wheat ends up 2 1/2c to $7.04 1/2 per bushel, while KCBT Dec wheat ends up 10 1/2c to $7.92 and MGEX Dec wheat down 12c to $8.64 3/4.

Rice (Source: CME)
US rice futures close sharply lower, extending a retreat from a nearly three-year high. Traders were taking profits following the rally earlier this week. "It seems like today people just kind of tossed in the towel," says Jack Scoville of Price Futures Group, adding he attributed most of the losses to selling by speculative traders. CBOT November rice drops 29c, or 1.6%, to $17.79 1/2/hundredweight.

US corn, wheat tick higher after selloff; soy dips
SINGAPORE, Sept 14 (Reuters) - Chicago grains edged higher , with corn recovering from a 4-week low and wheat rising 0.3 percent after sliding to its lowest in more than a month in the last session, amid concerns over declining demand for U.S. supplies.
"Yesterday, we saw a sharp selloff in corn and wheat and in early trading for today there is some bargain hunting as corn supplies are tight," said Lynette Tan, an analyst with Phillip Futures in Singapore.

Drought could hit Ukraine '12 grain crop
KIEV, Sept 14 (Reuters) - Lack of moisture in soil across Ukraine could affect the yield of the next year's winter grain crops and reduce the harvest, a senior weather forecaster said on Wednesday as farms started the 2012 winter grain sowing.
"The situation is not critical but we have enough ground for concerns," Tetyana Adamenko, the head of the agricultural department of Ukraine's meteorological centre, told Reuters in an interview.

Canada farm department adjusts crop estimates
WINNIPEG, Manitoba, Sept 13 (Reuters) - Canada's farm department raised its harvest forecast for wheat and lowered it for canola to match Aug. 24 forecasts by Statistics Canada.
Agriculture Canada released its grain and oilseed outlook, which is based on analysis not a farmer survey, on Tuesday.

Canadian Prairie frost seen as minor crop threat
WINNIPEG, Manitoba, Sept 13 (Reuters) - The Canadian Prairies' first widespread frost of the growing season will probably do minimal damage to cereal and canola crops, with the harvest well ahead of the usual pace.
Environment Canada is forecasting freezing temperatures for Tuesday night in southern and central Saskatchewan -- the top crop-growing province -- ranging from minus 2 degrees C (28.4 Fahrenheit) at Kindersley, North Battleford and Maple Creek down to minus 5 degrees C (23 Fahrenheit) in Melfort and Yorkton.

Farm body lifts French soft wheat crop estimate
PARIS, Sept 13 (Reuters) - French farm office FranceAgriMer lifted its estimate of France's soft wheat crop this year to 33.4 million tonnes against 33.3 million seen last month and said crop quality was satisfactory.
Compared with last season, the French soft wheat harvest would still be down by 6.4 percent after a severe drought hit plant development in the spring, it said.

Pakistan rains cause little damage to rice, sugarcane
ISLAMABAD, Sept 13 (Reuters) - Heavy monsoon rains in Pakistan's southern Sindh province have caused only minor damage to the sugarcane and rice crops, officials said on Tuesday, though weeks of heavy downpour have already destroyed about 13 percent of the cotton crop.    
The floods have made about 280,000 homeless, and ruined crops over 1.7 million acres of land in Sindh, where the cotton crop has been hit the hardest, with an estimated loss of up to two million bales.

UK Wheat Harvest More Resilient Than Hoped - NFU (Source: CME)
The U.K.'s wheat harvest in 2011-12 is expected to come in only 1.5% below the average of recent years despite the impact of drought early in the season, the National Farmers' Union said. Preliminary results from the NFU's survey of U.K. farmers indicated that wheat yields will come in at around 7.5 metric tons a hectare--only slightly below the 7.8 ton/hectare average for the past five years. With the cropping area up 3% this crop year, wheat production is expected to come in only 189,000 tons below the average since 2006-07 at around 13.64 million tons, the survey, which will be completed later this month, showed. Ian Backhouse, the NFU's combinable crops chairman, said the fall was due to dry conditions during the crop formation period earlier this year. The Environment Agency declared drought across several counties in the southeast of England, including in East Anglia, which grows 17% of the U.K.'s wheat.
"Survey responses have pointed to a large variability in yields," Backhouse said. "Where sufficient rain fell in June and July onto later maturing crops, yields have been exceptional. However, towards the latter part of harvest there was more variability in quality." Full U.K. yield results for wheat, barley and oilseed rape crops will be released later this month.

India Foodgrain Output Likely To Cross Target - Minister (Source: CME)
India's foodgrain output will likely cross the government's target of an all-time high of 245 million metric tons this crop year with above average monsoon rains boosting the production prospects of both wheat and rice, Farm Minister Sharad Pawar said. The output of rice during the main summer season is estimated to rise by about 8% to 87.10 million tons, while that of wheat--which is grown in winter--is expected to cross last year's level of 85.93 million tons. "Monsoon has been very encouraging this year...It will provide us the necessary impetus," the minister told a conference to discuss crop prospects and estimates of the summer-sown output. Until Sept. 14, monsoon rains were 3% above normal, eroding previous concerns that the seasonal rains would drop below average this year. Most of India's farmlands depend on the monsoon for crop cultivation.
The fillip to farm output will not only help to roll out a food security law that guarantees cheap foodgrains to 75% of the population, but will also likely enable the government to hammer down persistent food inflation--the most vexing problem facing policymakers. India invited comments from the public for fine tuning the draft of the proposed food security law that is expected to be introduced in parliament during its winter session. Besides foodgrains, favorable weather has also improved the prospects of other summer-sown crops including oilseeds, sugarcane and cotton. The output of summer-sown oilseeds is expected to rise to 20.89 million tons from 20.84 million tons last year. Of the total oilseeds, the output of soybean is estimated at 12.57 million tons as against 12.65 million tons last year. The output of sugarcane is expected to rise nearly 1% to 342.19 million tons and cotton by 8% to 36.10 million bales. Each bale of cotton weighs 170 kilograms.
However, the output of summer-sown pulses is expected to drop to 6.43 million tons from 7.12 million tons last year.

China Likely To Produce Record 2011 Corn Harvest - Report (Source: CME)
China is likely to produce a record corn harvest of more than 180 million metric tons this year, China Daily said, citing an expert at a cabinet-level think-tank. Rising demand may outpace the increase in output, meaning imports are set to rise, Xu Xiaoqing, director of the department for rural economic development of the State Council's Development Research Center, told the paper. The state-backed China National Grain and Oils Information Center last month raised its forecast for 2011 corn output to 182.5 million tons, a 3% increase from 2010. China's corn is mostly harvested in October and November. China uses 105 million tons of corn a year for animal feed, and rising meat consumption is adding to demand, China Daily said. Another 60 million-70 million tons are used in the processing sector for products including starch and ethanol.
China has imported 208,298 tons of corn this year, down 26% from the same period last year. Higher shipments from the U.S. are expected in the corn crop year that started Sept. 1.

Libya buys more Russian wheat
LONDON, Sept 13 (Reuters) - Libya has bought 100,000 tonnes of Russian milling wheat in recent weeks and will need a further 500,000 tonnes of wheat in the coming months as it recovers from months of war, a trading company involved in Libyan grain deals told Reuters.
Libya was a big importer of food before six months of fighting interrupted supply chains. The ruling interim council is struggling to assert its control over the entire country and capture a handful of stubbornly defended towns that still back ousted leader Muammar Gaddafi.

Corn, Soybean Futures Called Lower on Economic Concern; Wheat May Climb (Source: Bloomberg)
What follows are opening calls for U.S. grain and oilseed markets.
-- Corn futures are called to open 3 cents to 5 cents a bushel lower on the Chicago Board of Trade on concern that a sagging global economy will reduce demand for food, livestock feed and fuel made from the grain, Jim Gerlach, the president of A/C Trading Inc. in Fowler, Indiana, said in a telephone interview.
-- Soybean futures may open 3 cents to 5 cents a bushel lower in Chicago as worldwide consumption ebbs, Gerlach said. Prices may rebound later on speculation that cold weather tomorrow may damage immature U.S. crops across the northern Midwest, he said. Soybean-oil futures are expected to open steady to down 0.1 cent a pound, and soybean-meal futures may open little changed.
-- Wheat futures may open steady to 3 cents a bushel higher on the CBOT on speculation that an emerging La Nina weather pattern will reduce global production next year, Gerlach said. Prices on the Kansas City Board of Trade and the Minneapolis Grain Exchange may fall 2 cents to 5 cents as rain in the southern U.S. Great Plains in the next week might boost soil moisture for planting winter crops, he said.

Ukraine Corn Exports To Double, Helping To Boost World Supplies (Source: CME)
Ukraine corn exports are set to double over the next year, providing some relief to global grain markets that face a likely disappointing U.S. harvest. The jump in shipments is forecast to make the eastern European nation the world's third-largest exporter of corn, surpassing Brazil for the first time in seven years. Ukraine is forecast to harvest a record crop after a devastating drought last year. Farmers there planted more corn and used higher quality seed to take advantage of strong prices, and then the crop benefited from favorable summer weather. Ukraine exports could reach 12.5 million metric tons this season, up from 5.3 million metric tons last year, according to Ukrainian agricultural analysis agency APK-Inform. The U.S. Department of Agriculture forecasts Ukraine will ship 10 million metric tons for the crop year that started this month, an 82% rise from last year.
The surge comes as corn prices stand at historic highs as a hot, dry summer trimmed the size of the U.S. crop. The USDA in a report earlier this week forecast U.S. farmers will receive record prices for the corn that's starting to come out of the field. "If you're going to have surplus production for corn, this is the year to do it," said Shawn McCambridge, senior grains analyst for Jefferies Bache, a brokerage in Chicago. Still, Ukraine's exports sharply lag the U.S. and Argentina, which are projected to ship 41.9 million metric tons and 19.5 million metric tons, respectively, according to the USDA. Global supplies are forecast to hit precariously low levels for a second straight year as demand by ethanol makers, livestock producers and food processors continues to grow. The United Nations Food and Agriculture Organization said last week its food-price index slipped less than a point in August to 231 points, just below a record high set in February.
Forecasts for the U.S. crop have declined in recent months. The harvest is still expected to be the third largest on record, but falls short of expectations in the spring when farmers planted a huge crop in response to tight supplies and high prices. Ukraine could step in to fill some of that void, with livestock producers in countries such as Egypt, Ukraine's biggest customer, benefiting. The surge in exports could ease price pressures as Ukraine "increases the amount of (animal) feed supplies that are available as an alternative to high-priced U.S. corn," said John Kleist, broker and analyst for ebottrading.com, an agricultural advisory and brokerage firm. Analysts expect the increase in exports from Ukraine to be sustainable as long as high corn prices continue to encourage production. Increased wheat exports from the Black Sea region already are helping to expand global grain supplies and limiting price gains.
Taxes imposed on grain exports by Ukraine's government could be one limiting factor for the country's export growth, said Andrey Sizov Jr., managing director of Moscow-based think tank Sovecon. Yet, most analysts played down the impact of the recently imposed duties, saying Ukraine's prices were still expected to remain below global levels. Svetlana Sinkovskaya, marketing manager at the Ukrainian body APK-Inform, noted the export taxes are due to be lifted at the start of next year anyway.

Wheat Rebounds From Five-Week Low as High Corn Costs May Spur Feed Switch (Source: Bloomberg)
Wheat futures rebounded from a five-week low on speculation that demand will increase from livestock producers seeking an alternative to higher-priced corn as a feed grain. Wheat futures for December delivery were 21 cents a bushel cheaper than the comparable corn contract yesterday in Chicago, the biggest discount since at least 1959. Wheat usually trades at a premium to corn. About 240 million bushels of wheat will be in feed and residual use this year, 80 percent more than last year, the U.S. estimated on Sept. 12. Corn prices have gained 46 percent in the past year after adverse weather hurt the U.S. crop. “We’ll see more switching to wheat for feed purposes” at current prices, Frank Cholly Sr., a senior market strategist at MF Global Holdings Inc. in Chicago, said in a telephone interview. “We should see demand pick up.”

Raw sugar dips, October premium eyed
LONDON, Sept 14 (Reuters) - ICE raw sugar futures eased in early trade  with the focus remaining firmly on front month October and its premium to March .
The premium was trading around 1.4 cents a lb in early trade, well below Monday's peak of more than 2.00 cents but still significantly above last week when it traded as low as 0.57 cent.

Vietnam Agribank to lend $240 mln for coffee business
HANOI, Sept 14 (Reuters) - Agribank, Vietnam's largest lender, said it would lend the coffee sector nearly 5 trillion dong ($240 million), an amount that falls short of industry demand for funds required to stockpile up to 300,000 tonnes of beans to support prices.
Vietnam, the world's second-largest coffee producer after Brazil, is nearing a bumper crop expected to start next month and the country's coffee industry has planned to keep nearly a quarter of the crop output off the market for several months.

CoffeeNetwork sees record 2012/13 global crop
ANTWERP, Belgium, Sept 13 (Reuters) - World 2012/13 coffee output is expected to reach a record 142 million 60-kg bags, up from 135 million the previous year, analysis firm CoffeeNetwork said on Tuesday.
Speaking on the sidelines of the World Coffee Outlook Conference, CoffeeNetwork analyst Andrea Thompson said the next crops from top world producers Brazil and Vietnam were expected to be at record levels.

Brazil 11/12 cotton output seen higher - trade group
SAO PAULO, Sept 13 (Reuters) - Farmers in Brazil may cut area planted to cotton next season due to competition from soy and corn but output could rise as production focuses on choice fields, Brazilian cotton exporters' association Anea said.
Cotton competes for land with soy and corn in Brazil's main summer crop, and persistently high prices for the grains could mean less available area for production of the lint.

Colombia '11 main coffee crop may be hit by rains
BOGOTA, Sept 13 (Reuters) - Colombia's main coffee harvest later this year may be hit by heavier-than-normal rains due to the reappearance of La Nina, throwing into doubt growers' production targets, officials and industry players said.
Colombia's coffee production fell through the first half of 2011 after heavy rains caused by the La Nina weather anomaly hit crops during their vital flowering stage last year, and now farmers fear a return of the weather phenomena.
Brazil coffee crop seen record for off-year--gov't
SAO PAULO, Sept 13 (Reuters) - Brazil's 2011/12 coffee crop forecast was slightly reduced on Tuesday by the Agriculture Ministry's crop supply agency Conab, but the output would still be the highest ever for an off-year harvest.
The crop was estimated at 43.15 million 60-kg bags, down from the 43.5 million bags projected in May, Conab said in its third forecast of the current crop that recently ended harvest.
The world's No.1 coffee producer, Brazil harvested 48.1 million bags in 2010/11. Its coffee output rises and falls in a biennial cycle.

Ethanol industry to stay hungry for U.S. corn
KANSAS CITY, Mo., Sept 14 (Reuters) - The U.S. ethanol industry is keeping its foot on the gas pedal at production plants and if the trend continues it could defy a government forecast that the industry will have its first drop in corn use since the turn of the century.
The government forecast, which was issued on Monday, was based on expected weaker gasoline use and higher corn prices. Ethanol is blended with gasoline. In addition, some analysts said the expiration of an industry tax credit at the end of the year could also eat into profits.

BP Makes Further Inroads Into Brazil Biofuels (Source: CME)
BP PLC's as the U.K. oil major said it had bought the 50% of Brazilian biofuel company Tropical BioEnergia it didn't already own in a deal valued at $71 million and paid another $25 million to raise its stake in sugar and ethanol firm Companhia Nacional de Acucar e Alcool, or CNAA. The acquisition of Tropical BioEnergia means BP now has three ethanol-producing mills in Brazil, two of which were gained with its purchase of an 83% stake in CNAA in March. Although it only bought an additional 3% in CNAA, by converting the company's long-term debt to equity following the earlier transaction it now controls over 99% of the firm's issued-share capital. Philip New, vice president of BP Biofuels, said: "This is another significant milestone in BP's global biofuel strategy as we expand our operations base and demonstrate our genuine commitment to Brazil's ethanol industry, which can deliver sustainable and competitive biofuels into the global market."
BP said it intends to double the size of the operations at Tropical BioEnergia to a capacity of 5 million tons of crushed cane, or 450 million liters of ethanol equivalent, a year. BP was the first global oil major to make an acquisition in Brazil's ethanol sector, buying a 50% stake in Tropical BioEnergia in 2008. Other oil majors have followed, including Royal Dutch Shell PLC, which undertook a $12 billion tie-up with Cosan S/A Industria e Comercio, the world's largest sugar and ethanol group, in February last year. Brazil has attracted increased attention from global oil majors seeking exposure to the domestic market, where more than 80% of all new cars sold are flex-fuel models that can run on any mixture of ethanol and gasoline. Latin America's largest country is also seen as a low-cost production base for key export markets such as the U.S., Europe and Asia, where use of biofuels is expected to rise as countries aim to reduce carbon emissions.
Mario Lindenhayn, who heads BP Biofuels in Brazil, said the deals will hasten BP's biofuels growth agenda. "This transaction, together with other recent acquisitions, gives us a strong platform from which to expand our capacity to supply both domestic and international fuels markets."

Mexico delays 1.3 mln barrels of oil output on storm
MEXICO CITY, Sept 13 (Reuters) - Mexico's state oil company Pemex said on Tuesday 1.331 million barrels of oil production was delayed after the company shut down platforms last week due to Tropical Storm Nate.
Pemex said after the Sept. 7-11 closure at the country's two largest fields, Ku Maloob Zaap and Cantarell, operations were back to normal and the losses from the storm would be made up at a later date.

Euro Coal-Oct S.Africa prices slump $6 to $111/T
LONDON, Sept 13 (Reuters) - Prompt South African coal prices slumped by another $6.00 a tonne or 5 percent on Tuesday as traders struggled to find buyers for cargoes due to load in a few weeks' time while DES ARA prices slipped by 25-50 cents.
There was a mix of banks, traders, producers and utilities in the market on Tuesday but although bids and offers were close, few trades were done.

SocGen slashes thermal coal price forecasts
LONDON, Sept 13 (Reuters) - Thermal coal supply will grow by around 58 million tonnes in 2012 from this year's levels, barring weather events, which will push benchmark coal prices down, Societe Generale said in a report on Tuesday.
Buyers consider present coal prices to be unjustified due to the overhang of high-grade coal in the aftermath of the Japanese force majeure, SocGen said.

Brazil's diesel shortfall to boost Asian market
SINGAPORE, Sept 14 (Reuters) - A diesel shortage in Brazil as refining capacity fails to keep pace with growing industrial demand will boost the country's imports of the fuel from Asia for at least the next two years, helping to mop up a regional surplus.
Growing competition for Asian supplies, coming at a time when fuel demand from China and India are expected to rise in line with their booming economies, will help tighten a market whose gains this year have been capped by high supplies.

Oil tanker waits off Libya for loading instruction
LONDON, Sept 13 (Reuters) - An oil tanker is waiting off Libya for loading instructions, the owner of the vessel said on Tuesday.
In a sign that war-torn Libya was working to get its oil industry back on its feet, market sources said the tanker would probably load a part of a Libyan condensate tender, which was offered late last week.
 
Oil Trades Near 2-Day Low on Rising Fuel Stockpiles, European Debt Outlook (Source: Bloomberg)
Oil traded near a two-day low in New York as signals that U.S. fuel demand is weakening countered optimism that European leaders will step up efforts to resolve the region’s sovereign debt crisis. Futures were little changed after slipping as much as 0.4 percent. Gasoline stockpiles rose 1.94 million barrels last week, the biggest gain since June, according to the Energy Department. Supplies of distillate fuel, a category that includes heating oil and diesel, increased to the highest level since February. Equities and the euro climbed after German and French leaders said they are “convinced” Greece will remain in the single currency. Crude for October delivery was at $88.80 a barrel, down 11 cents, in electronic trading on the New York Mercantile Exchange at 10:23 a.m. Sydney time. The contract yesterday slid $1.30, or 1.4 percent, to $88.91. Prices are up 17 percent the past year.

Iron Ore-Spot offers slip below $190/T; Shanghai rebar falls
SHANGHAI, Sept 14 (Reuters) - Spot iron ore prices fell below $190 per tonne on Wednesday, as  Chinese steel mills continue to stay on the sidelines of the seaborne market as steel prices fall despite the traditional consumption peak season.
Steelmakers in China, the world's top iron ore buyer and steel producer, have stepped away from imports and have preferred to buy domestic ore to lower production costs after offers inched above $190 per tonne last week.

China's steel output dip in Aug, Baosteel up Oct prices
SHANGHAI, Sept 13 (Reuters) - China's crude steel output fell 0.9 percent to 58.75 million tonnes in August from the previous month as several steel mills reduced production due to maintenance, official figures showed.
Data released by the National Bureau of Statistics on Tuesday showed that China's daily crude steel output fell below 1.9 million tonnes for the first single month this year, with the mills scheduling maintenance to take advantage of weak consumption season over the summer period.

China's Baosteel says to lift October prices
SHANGHAI, Sept 13 (Reuters) - China's top listed steelmaker Baoshan Iron & Steel  will raise its main steel product prices for October bookings, the company said on Tuesday.
The company, usually known as Baosteel, led its domestic peers in price increases for September bookings in anticipation of improving demand in the traditional consumption season.

Freeport Copper Miners in Peru, Indonesia Strike to Support Wage Demands (Source: Bloomberg)
Freeport-McMoRan Copper & Gold Inc. (FCX)’s copper miners in Peru and Indonesia went on strike today after pay-increase talks broke down, union officials said. About 1,200 workers at Freeport’s Sociedad Minera Cerro Verde SAA (CVERDEC1) unit, Peru’s third-largest copper producer, walked off their jobs at 8:30 a.m. New York time, Mining Federation General Secretary Luis Castillo said today by telephone. About 8,000 non-staff workers at Freeport’s Grasberg mine in Indonesia started a one-month strike at midnight local time, said Virgo Solossa, head of organizational affairs at the labor union. Workers in Peru, Chile, Bolivia and Indonesia have gone on strike at copper, gold and zinc mines this year, seeking improved conditions and a bigger slice of record profits. Copper yesterday rose as much as 1.5 percent as threats of mine strikes heightened concern a global shortfall will increase.

Gold Prices Drop as Concerns Ease on European Debt Woes, Dollar Advances (Source: Bloomberg)
Gold futures fell as the prospect of financial support from China eased concern that the European debt crisis will worsen, eroding demand for the metal as a haven. China is willing to buy the bonds of nations hit by the debt crisis, said Zhang Xiaoqiang, a vice chairman of the National Development and Reform Commission, according to Caijing magazine. Equities rallied in the U.S. for a third day, and the dollar rose against a basket of major currencies, reducing the appeal of gold as an alternative investment. “Europe is trying to find ways to ward off the crisis,” Tom Pawlicki, a Chicago-based analyst at MF Global Holdings Ltd., said in a telephone interview. “The dollar being slightly up is also acting against gold.”

Baltic index rises for 4th day, gains slow
LONDON, Sept 13 (Reuters) - The Baltic Exchange's main sea freight index, which tracks rates to ship dry commodities, rose to its highest in nearly nine months on Tuesday although freight derivatives contract selling pared the pace of gains seen in recent days.
The overall index rose 1.35 percent or 25 points to 1,901 points in a fourth session of gains and was at its highest since Dec. 20.

Maersk Line says container sector to stay depressed
LONDON, Sept 12 (Reuters) - Conditions in the overall ship container industry will remain depressed in the coming months due to a glut of ships on order, the chief executive of Maersk Line, the world's biggest container shipping company, said on Monday.
Prospects for a recovery in the global container shipping industry could be derailed if global economic turmoil spreads and consumer demand in Europe and the United States slides.

SocGen Says It’s Underweight in Commodities Which Are Now in ‘Danger Zone’ (Source: Bloomberg)
Societe Generale SA’s global asset allocation team went “underweight” on commodities, saying the asset class is in the “danger zone.” The team recommends that investors position for higher gold prices and lower oil prices, one of seven key calls made in the report distributed today by the Paris-based bank. The precious metal should benefit from risk aversion, central-bank purchases and negative real interest rates, the team wrote. Crude and copper may decline as economic growth slows and the dollar gains against the euro. “Prices of cyclically sensitive commodity prices, such as crude oil and copper, have held up well over recent weeks despite the recent deceleration in economic activity,” Societe General strategists Alain Bokobza, Roland Kaloyan, Arthur Van Slooten and Philippe Ferreira wrote in the report. “This should contribute to a meaningful drop in the prices of these commodities.”

Commodities Drop, Paced by Oil and Copper, on Concern Demand May Weaken (Source: Bloomberg)
Commodities declined, led by crude oil and copper, on concerns that demand for raw materials may ease as the euro-zone debt crisis remains unresolved and the Asian Development Bank cut its growth forecast for the region. Greek Prime Minister George Papandreou will hold a conference call with German Chancellor Angela Merkel and French President Nicolas Sarkozy today amid increasing speculation that Greece will default. The Manila-based ADB cut its 2011 growth forecast for Asia excluding Japan to 7.5 percent from an April estimate of 7.8 percent, according to the Asian Development Outlook 2011 Update report released today. “Sovereign-debt problems still wait for credible solutions, leaving risk appetite on shaky ground,” Stefan Graber, a commodity analyst at Credit Suisse Group AG in Zurich, wrote in an e-mailed report today. “For now we take a cautious stance on the cyclical metals space.”

Commodity ETP Investments Decline to $7.8 Billion, Barclays Capital Says (Source: Bloomberg)
Investors placed 29 percent less cash in commodity exchange-traded products in the first seven months of the year, Barclays Capital said in a report. Commodity-based ETP inflows totaled about $7.8 billion, down from from $11 billion a year earlier, Barclays Capital analyst Roxanna Mohammadian-Molina said today in the e-mailed report. Investors cut inflows into commodities even as economic news pushed up gold prices by 15 percent in the year through July and Standard & Poor’s GSCI Index of raw materials gained 8.6 percent. “This picture across the mainly retail investor-driven ETP market contrasts with the rising official sector appetite for gold, the healthy demand for physical gold and the increase in net-long positions in the futures markets,” Mohammadian-Molina wrote in the report. “Despite the sheer number of potentially damaging risks affecting the economy, commodity-linked ETPs have seen weak inflows.”