Thursday, October 13, 2011

20111013 1824 FCPO EOD Daily Chart Study.

FCPO closed : 2844, changed : -20 points, volume : lower.
Bollinger band reading : side way range bound downside biased.
MACD Histrogram : recovering, seller closing position and buyer testing market.
Support : 2800, 2770, 2750, 2720 level.
Resistance : 2850, 2900, 2920, 2950 level.
Comment :
FCPO closed recorded loss with lesser volume transacted while overnight soy oil closed recorded loss and currently between gain and losses while crude oil price head south recording substantial losses.
Overnight USDA report forecast lower soybean output and also slower consumption demand for soy oil pressure soy oil and palm oil price to trade lower. Latest news, Reuters reported that Goldman Sachs say continue to expect soybean prices to outperform and wheat prices will under perform on higher foreign supply.
Daily chart formed a down doji bar candle closed near middle Bollinger band after market opened lower, traded side way within 34 points range bound toward the end.
Chart reading suggesting a side way range bound downside biased market development testing support and resistance level.
When to buy : buy at support or weakness with quick cut loss and profit target.
When to sell : sell at resistant or strength with quick cut loss and profit target.

20111013 1739 FKLI EOD Daily Chart Study.


FKLI closed : 1439, changed : +0.5 point, volume : lower.
Bollinger band reading : side way range bound.
MACD Histrogram : rising, buyer having exposure.
Support : 1425, 1420, 1400, 1395 level.
Resistance : 1440, 1445, 1458, 1470 level.
Comment :
FKLI closed 1 tick higher with reduced volume exchanged doing 5.5 points discount compare to cash market that continue to rallied higher. Overnight U.S. markets closed recorded gains and Asia markets traded mostly higher while European markets currently easing lower.
Asia market reacted positively to news of European leaders edged closer to a plan for taming the debt crisis and the U.S. Federal Reserve said it discussed more asset purchases while European market tradng lower after news on China’s export growth slowed to its weakest pace in seven months and Carrefour cut its full-year profit forecast for the second time in three months.
Daily chart formed a doji bar candle positioned near upper Bollinger band level after market opened little higher, swing upwards tested higher resistance levels and fall lower recording loss before recovered upward slightly surendered most of intraday gains to closed near opening price.
Technical reading still suggesting a side way range bound market development testing support and resistance level.
When to buy : buy at support or weakness with quick cut loss and profit target.
When to sell : sell at resistance or strength with quick cut loss and profit target.

20111013 1718 Regional Markets EOD Daily Chart Study.

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

20111013 1617 Global Market & Commodities Related News.

Asia shares rise on progress in euro zone rescue
TOKYO, Oct 13 (Reuters) - Asian shares rose on growing hopes that Europe is taking concrete steps to contain the region's debt woes and head off a systemic banking crisis.
"Markets are feeling better. The sense is that things are beginning to be put in place, bondholder haircuts, bank recapitalisations and the EFSF expansion," said a Singapore-based trader with an Asian bank referring to the two-year old euro zone debt crisis.

Asian Stocks Rise as European Debt Plan, U.S. Fed Buoy Recovery Confidence (Bloomberg)
Asian stocks rose for a sixth day as European leaders edged closer to a plan for taming the debt crisis and the U.S. Federal Reserve said it discussed more asset purchases, reducing concern about the global economy. Esprit Holdings Ltd. (330), a clothier that gets most of its revenue from Europe, jumped 13 percent in Hong Kong after refuting claims it overstated the number of its Chinese stores. Sony Corp. added 3 percent in Tokyo, even after saying it recalled 1.6 million televisions. BHP Billiton Ltd. (BHP), the world’s No.1 miner, gained 1.5 percent in Sydney after metal prices rose yesterday. BYD Co., the automaker backed by billionaire investor Warren Buffett, soared 11 percent in Hong Kong.
The MSCI Asia Pacific Index rose 1.1 percent to 117.51 as of 3:24 p.m. in Tokyo, taking its advance in the past six days to 9.5 percent. The gauge climbed this week after German Chancellor Angela Merkel and French President Nicholas Sarkozy pledged at the weekend to deliver a plan to recapitalize banks and address Greece’s debt crisis.

Most European Stocks Gain, Alcatel-Lucent Rises (Bloomberg)
Most European stocks rose as construction and technology companies climbed. U.S. futures gained, while Asian shares advanced. Alcatel-Lucent surged 11 percent after the Financial Times reported that France’s biggest telecommunications equipment maker will sell its corporate call-center business. Carrefour retreated 4.1 percent after saying its profit may fall as much as 20 percent this year. Roche Holding AG (ROG) slid 3.2 percent after posting third-quarter revenue that missed analysts’ estimates. The benchmark Stoxx Europe 600 Index gained 0.2 percent to 239.53 at 8:50 a.m. in London as more than three stocks increased for every one that decreased. The gauge rose 1.7 percent yesterday for its biggest six-day rally since January 2009, surging 10 percent. The gauge has still tumbled 18 percent from its high on Feb. 17 amid concern that the sovereign debt crisis in Europe will spread from Greece to the larger economies of Italy and Spain.

China trade momentum softens in face of global woes
BEIJING, Oct 13 (Reuters) - China's trade surplus narrowed in September for a second straight month as growth of exports and imports both pulled back, reflecting global economic weakness and domestic cooling, and giving Beijing ammunition to resist U.S. pressure to allow the yuan to rise more quickly.
Exports increased 17.1 percent last month from a year ago, slowing from a 24.5 percent gain in August, and imports increased 20.9 percent, compared with August's 30.2 percent rise, the customs office said on Thursday.

Punishing China no boon for U.S. manufacturing jobs
LONDON, Oct 12 (Reuters) - For every Apple iPad sold in the United States, the U.S. trade deficit with China increases by about $275.
Yet by far the most value embedded in the device accrues to Apple  and sustains thousands of well-paid design, software, management and marketing jobs in the United States.

US wheat falls for 2nd day on supply pressure, soy dips
SINGAPORE, Oct 13 (Reuters) - U.S. wheat slid 0.7 percent, falling for a second straight day as the market was weighed down by a U.S. government report that raised estimates for global supplies.
"U.S. and world wheat supplies are comfortable and are not supportive for high prices,"  Luke Mathews, a commodity strategist at Commonwealth Bank of Australia, said in a report.

Thai floods damage rice, threaten exports
SINGAPORE/HANOI, Oct 12 (Reuters) - Thailand's worst floods in half a century have inundated farms and mills, squeezing rice supplies from the world's top exporter, while rival Vietnam is expected to default on half a million tonnes as prices of the staple climb.
Flood-damage to Thai rice comes as the nation's new government implemented a scheme that gives farmers a big increase in farmgate prices, raising concerns over food inflation among buyers in Asia, the Middle East and Africa.

UK wheat supplies seen barely changed in 2011/12
LONDON, Oct 12 (Reuters) - Wheat supplies in Britain are seen barely changed in 2011/12 as a slightly larger crop offsets lower opening stocks by comparison with the start of the previous season, the Home-Grown Cereals Authority said on Wednesday.
The HGCA, in its first supply/demand balance for the 2011/12 marketing season which began on July 1, put wheat availability at 17.83 million tonnes, marginally down from 17.91 million in the prior season.

Showers slow down U.S. corn and soy harvesting
CHICAGO, Oct 12 (Reuters) - Showers at mid-week will slow down the harvesting of corn and soybeans in the U.S. Midwest, but the delays will be short-lived, an agricultural meteorologist said Wednesday.
"There are some rains today and tomorrow in most of the Midwest and eastern Plains with the bulk of the rainfall in the west central and eastern Midwest including Missouri, Iowa, Minnesota and western Illinois," said Don Keeney, meteorologist for MDA EathSat Weather.

S.Africa maize deliveries rise to 9.342 mln T -SAGIS
JOHANNESBURG, Oct 12 (Reuters) - Maize deliveries to South African silos rose to 9.342 million tonnes in the week to Oct.7, up from a revised 9.326 million tonnes in the week before, data showed on Wednesday.
White maize deliveries rose to 5.692 million tonnes from a revised 5.685 million tonnes, while yellow maize submissions increased to 3.650 million tonnes
from a revised 3.641 million tonnes, the South African Grain Information Service (SAGIS) said.

Pakistan may import 400,000 T sugar next year
ISLAMABAD, Oct 12 (Reuters) - Pakistan may import up to 400,000 tonnes of refined sugar next year to bolster reserves despite expectations of a bumper crop, officials of the Ministry of Industries said on Wednesday.
The Economic Coordination Committee (ECC), the highest economic decision-making body, is expected to discuss the stock position and prospects for the next crop in a meeting on Thursday, the officials said.

Brent falls to near $111 as China crude imports slow
SINGAPORE, Oct 13 (Reuters) - Brent crude fell to near $111, snapping six days of gains, after trade data from China pointed to slower demand in the world's second-largest oil consumer.
"The fall in crude imports could be attributed to either weak demand or a draw down in inventories," said Brynjar Bustnes, J.P. Morgan analyst in Hong Kong.

China September crude oil imports down 2.8 pct from August
BEIJING, October 13 (Reuters) - China imported 20.45 million tonnes of crude oil in September, down 2.8 percent from 21.04 million tonnes in the previous month, according to data from China's General Administration of Customs.
Imports of oil products fell 18.8 percent to 2.77 million tonnes while exports of oil products rose 3.2 percent to 2.24 million tonnes.

North Sea oil supplies to improve in November
LONDON, Oct 12 (Reuters) - Crude oil output from nine North Sea grades is set to rise by nearly 2 percent in November from the previous month due to higher supplies of some Norwegian streams.
Output will average 1.792 million barrels per day (bpd) in November, up from a planned 1.761 million bpd in October, according to provisional loading
programmes.

IEA cuts oil demand forecast while US more bullish
WASHINGTON/LONDON, Oct 12 (Reuters) - The International Energy Agency cut its global oil demand growth projection on Wednesday while the U.S. government increased its outlook for 2012, making it the most bullish forecaster as the economy heads into an uncertain year.
The U.S. Energy Information Administration's outlook for oil demand growth next year was much stronger than the Paris-based IEA's projection and the forecast issued by the Organization of the Petroleum Exporting Countries on Tuesday.

W.Europe steel output may halve by 2030-Voestalpine
PARIS Oct 12 (Reuters) - Steel production in Western Europe is likely to halve in the next 20 years as most basic grade steel production will migrate from Europe to lower cost countries, the Chairman and CEO of Austrian steelmaker Voestalpine  told Reuters.
"It is realistic to think that this will happen," Wolfgang Eder, also president of the European steel producer  association Eurofer, said in an interview on Wednesday on the sidelines of the annual World Steel Association conference.
 
LME copper retreats from two-week high
SHANGHAI, Oct 13 (Reuters) - London copper slipped 1.6 percent after meeting strong technical resistance above $7,500, with lingering worries over the euro zone crisis and uncertainties ahead of key Chinese data this week also weighing on base metals.
"Copper is now moving sideways trying to consolidate in a new technical range. Equities went up slightly but not as much as yesterday so they won't be lifting base metals as much," CiFCO Futures analyst Zhou Jie said.

China Sept iron ore imports up 2.5 pct at 60.57 mln T
BEIJING, Oct 13 (Reuters) - China imported 60.57 million tonnes of iron ore in September, up 2.5 percent compared with the previous month and the highest monthly figure since January, official data from China's customs authority showed on Thursday.
But despite the increase, Chinese traders remain pessimistic about their prospects in the coming months amid uncertainties about the global economy and tightening domestic credit.
 
Freeport Indonesia says ramps up copper output
TIMIKA, Indonesia, Oct 12 (Reuters) - Freeport Indonesia has ramped up copper concentrate production at its strike-hit  Grasberg mine, taking it to more than 4,000 tonnes per day in October, and plans to ship 79,000 tonnes this week.
This has taken output at the world's second-biggest copper mine from just 54 tonnes on Sept. 18, days after the start of a strike by around half its workforce, and up to around three-quarters of its normal production, undermining the month-long industrial action over pay.

China Sept copper imports rise 11.8 percent on-month
HONG KONG, Oct 13 (Reuters) - China's imports of unwrought copper and semi-finished copper products rose 11.8 percent from the previous month to a 16-month high in September as importers took spot shipments on improved margins.
The world's top copper consumer imported 380,526 tonnes of anode, refined copper, alloy and semi-finished copper products in September, the highest level since May 2010 and a gain of 3.3 percent from September 2010, data from the General Administration of Customs showed on Thursday.

Freeport Indonesia says ramps up copper output
TIMIKA, Indonesia, Oct 12 (Reuters) - Freeport Indonesia has ramped up copper concentrate production at its strike-hit  Grasberg mine, taking it to more than 4,000 tonnes per day in October, and plans to ship 79,000 tonnes this week.
This has taken output at the world's second-biggest copper mine from just 54 tonnes on Sept. 18, days after the start of a strike by around half its workforce, and up to around three-quarters of its normal production, undermining the month-long industrial action over pay.

China Sept iron ore imports up 2.5 pct at 60.57 mln T
BEIJING, Oct 13 (Reuters) - China imported 60.57 million tonnes of iron ore in September, up 2.5 percent compared with the previous month and the highest monthly figure since January, official data from China's customs authority showed on Thursday.
But despite the increase, Chinese traders remain pessimistic about their prospects in the coming months amid uncertainties about the global economy and tightening domestic credit.

W.Europe steel output may halve by 2030-Voestalpine
PARIS Oct 12 (Reuters) - Steel production in Western Europe is likely to halve in the next 20 years as most basic grade steel production will migrate from Europe to lower cost countries, the Chairman and CEO of Austrian steelmaker Voestalpine  told Reuters.
"It is realistic to think that this will happen," Wolfgang Eder, also president of the European steel producer  association Eurofer, said in an interview on Wednesday on the sidelines of the annual World Steel Association conference.

Tata may cut Europe steel output if order books weak
LONDON, Oct 12 (Reuters) - Tata Steel , the world's No. 7 steelmaker, may cut production further in Europe in the next few months if steel orders weaken, Karl-Ulrich Köhler, CEO of Tata Steel in Europe said on Wednesday.
The company had already cut production capacity from 85-90 percent in the first half this year to 80-85 percent currently, it said.

METALS - LME copper retreats from two-week high
SHANGHAI, Oct 13 (Reuters) - London copper slipped 1.6 percent on Thursday after meeting strong technical resistance above $7,500, with lingering worries over the euro zone crisis and uncertainties ahead of key Chinese data this week also weighing on base metals.
Three-month copper on the London Metal Exchange  fell to $7,406.25 a tonne by 0412 GMT, after touching $7,544.75, its highest since Sept. 28 ,in the previous session, and closing 3.2 percent higher.

PRECIOUS-Gold steady on Europe hope; tight physicals help
SINGAPORE, Oct 13 (Reuters) - Gold prices held steady on Thursday, as optimism for a solution to the euro zone crisis underpinned sentiment, while tight physical supply in Asia continued to lend support.
A day after Slovakia's parliament voted against the expansion of the euro zone's rescue fund, parties in the outgoing government struck a deal with the leftist opposition to ratify the expansion by Friday, effectively ending a crisis that had threatened the currency's main safety net.

Gold steady on Europe hope; tight physicals help
SINGAPORE, Oct 13 (Reuters) - Gold prices held steady, as optimism for a solution to the euro zone crisis underpinned sentiment, while tight physical supply in Asia continued to lend support.
"Gold is likely to remain in range trade as everyone is waiting for the euro zone to reveal how it will solve the debt crisis by the end of the month," said Dick Poon, manager of precious metals at Heraeus in Hong Kong.

20111013 1143 Indonesia Tax Change Shakes Up Palm Oil Special Report by Reuters.

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Here is the latest Indonesia Tax Change Shakes Up Palm Oil Special Report by Reuters. Here's the link :  Indonesia Tax Change Shakes Up Palm Oil Special Report by Reuters. Enjoy !

20111013 1115 Global Market & Commodities Related News.

GLOBAL MARKETS-Stocks, euro rally on fund progress, momentum
NEW YORK, Oct 12 (Reuters) - World stocks advanced for a sixth straight day on Wednesday and the euro rose against the U.S. dollar after the final nation in the euro zone reached a deal to strengthen a regional bailout fund, boosting investor confidence.
"It feels as though the market is experiencing the possibility of a melt-up," said Hank Smith, chief investment officer of Haverford Trust Co in Philadelphia.

Asian Stocks Rise as European Debt Plan, U.S. Fed Buoy Recovery Confidence (Bloomberg)
Asian stocks rose for a sixth day as European leaders edged closer to a plan for taming the debt crisis and the U.S. Federal Reserve said it discussed more asset purchases, reducing concern about a global recovery. Honda Motor Co., Japan’s second-largest automaker by revenue, rose 1.9 percent in Tokyo. Sony Corp. added 3.8 percent, even after saying it recalled 1.6 million Bravia flat- panel TVs. Korea Zinc Co. jumped 4.9 percent in Seoul. BHP Billiton Ltd. (BHP), the world’s biggest mining company, gained 0.8 percent in Sydney after metal prices rallied yesterday. Iluka Resources Ltd. (ILU), the world’s biggest zircon producer, surged 5.5 percent after saying third-quarter sales more than doubled.
The MSCI Asia Pacific Index rose 1 percent to 117.36 as of 10:41 a.m. in Tokyo, taking its advance in the past six days to 9.2 percent. The gauge climbed this week after German Chancellor Angela Merkel and French President Nicholas Sarkozy pledged to deliver a plan to recapitalize banks and address Greece’s debt crisis.

COMMODITIES-Oil, metals gain on likely euro zone deal
NEW YORK, Oct 12 (Reuters) -  Most major commodities, including oil, precious metals and copper jumped on Wednesday, along with U.S. equity indexes and the euro, as it seemed euro zone debt challenges were moving toward a resolution and would avert a crisis.
"The key driver has come from China," said Nicholas Snowdon, analyst with Barclays Capital in New York. "We are beginning to see signs of a pick-up in Chinese buying post the Golden week holiday. Buying today is noticeably higher."

U.S. oil inventories and random noise: John Kemp
-- John Kemp is a Reuters market analyst. The views expressed are his own --
LONDON, Oct 12 (Reuters) - The American Petroleum Institute (API) accelerated publication of its own weekly oil numbers almost three years ago in a bid to improve their relevance and stop them being eclipsed by the official numbers published by the Energy Information Administration (EIA).
Given their improved accuracy, the data has started to attract more notice, and some observers wonder if they could eventually acquire the same market-moving potential. Unfortunately, the answer is almost certainly "No."

Brent rises a 6th session eyeing euro zone, Iran
NEW YORK, Oct 12 (Reuters) - Brent crude rose on Wednesday, posting an 11.6 percent gain over six sessions, as Slovakian lawmakers appeared ready to approve an EU plan to strengthen the euro zone rescue fund.
"U.S. crude failed to push above Tuesday's high and the Brent spread to U.S. crude has been trading in that $22 to $27 range and is being pushed up today, helped by Shell's force majeure on Nigerian oil," said Gene McGillian, analyst at Tradition Energy in Stamford, Connecticut.

US defends deal to boost auto fuel efficiency
WASHINGTON, Oct 12 (Reuters) - The Obama administration on Wednesday pledged transparency in setting standards to boost auto fuel efficiency and cut tailpipe emissions, countering claims that a landmark agreement securing automaker support for its environmental initiative was secretive.
The agreement reached in July is the foundation of a planned rule requiring that new cars sold in the United States nearly double average fuel efficiency by 2025 to 54.5 miles per gallon. The administration said the formal regulation was a work in progress and would provide opportunity for outside input.

U.S. oil diplomacy targets consumer demand
ASTANA, Oct 12 (Reuters) -  The United States will press major oil-producing nations to ensure they are pumping enough oil to meet demand, regardless of price, while also encouraging a recovery of oil output from Libya and Iraq, a senior energy department official said on Wednesday.
"We don't assess the supply and demand equation as a function of price per se," U.S. Deputy Secretary of Energy Daniel Poneman told Reuters in an interview. "We look at satisfying consumer demand."

Saudi oil exports under threat from within
DUBAI, Oct 12 (Reuters) - The world may have to live on a lot less Saudi Arabian crude towards the end of this decade as rampant internal demand eats into oil exports and the kingdom's alternative energy plans may prove too little too late.
The top crude exporter is already burning more than 10 percent of its output in power plants on hot summer days. Meanwhile huge fuel subsidies, which have helped sedate Saudi social unrest throughout the Arab Spring, are exacerbating a demand boom that is lapping up the world's largest oil reserves.

Natural gas ends down 3.5 pct on weather, storage
NEW YORK, Oct 12 (Reuters) - Front-month U.S. natural gas futures ended down sharply on Wednesday, with mild weather and expectations for a big weekly storage build on Thursday forcing buyers to pull back after two straight higher sessions.
"The market's been trying to find a (seasonal) bottom, but we're in a period of moderate (weather) demand, and there's plenty of gas around," a Texas-based trader said.

EURO COAL-Prices dip, trade remains thin
LONDON, Oct 12 (Reuters) - Prompt physical coal prices fell slightly by around 25 U.S. cents a tonne on Wednesday after a day of quiet trade.
"It's hard to see the market's direction clearly," said Emmanuel Fages, analyst with Societe Generale in Paris.

Gold Climbs for Second Day as Optimism on Europe Bialout Fund Boosts Euro
Gold advanced for a second day as expectations that Slovakia will approve Europe’s enhanced bailout fund strengthened the euro and increased the appeal of the metal priced in U.S. dollars. Bullion for immediate delivery climbed as much as 0.5 percent to $1,684.38 an ounce and traded at $1,681.48 at 9:24 a.m. in Singapore. It reached $1,692.18 an ounce yesterday, the highest price since Sept. 23, as the dollar dropped. “Gold gained, buoyed by a weaker dollar,” Natalie Robertson, an analyst at Australia & New Zealand Banking Group Ltd., wrote in a note today.
Slovakia, the only country in the 17-nation euro area that hasn’t approved an enhanced European Financial Stability Facility, will complete approval today or tomorrow after its largest opposition party backed the motion. European Commission President Jose Barroso yesterday called for support for crisis- hit banks, the payout of a sixth loan to Greece and a faster start for a permanent rescue fund.

20111013 1022 Malaysia Corporate Related News.

SP Setia said it has not received other offers to acquire its shares and warrants,  apart from an earlier bid by its major shareholder Permodalan Nasional Bhd.  (BT)

C.I. Holdings Bhd  group managing director Datuk Johari Abdul Ghani has  raised his direct stake to 30.53% or 43.35m shares. A filing to Bursa Malaysia  showed he acquired 750k shares or a 0.528% stake, at RM4.50 a share via a  married deal on Tuesday, Oct 11.  Another filing showed CI Holdings’ head of corporate finance, strategy  & development Syed Khalil Syed Ibrahim had acquired 99k shares or  RM4.39 per share on Tuesday in the open market.  The latest transaction raised Syed Khalil’s direct stake to 919.2k shares  or 0.65%. His indirect stake is 10.44% or 14.882m shares. (Financial  Daily)

The recent flood in Thailand is not interrupting the supply and delivery  schedules of Toyota models retailed in Malaysia at the moment. UMW Toyota said as of now, the flood has no direct impact on Toyota Motor Thailand.  However, some suppliers are experiencing delays in supplying parts to the  plants. (Bernama)

Construction of the Klang Valley MRT is expected to begin in the second or  third quarter of next year, MRT Co CEO  Datuk Azhar Abdul Hamid said.  Currently, some advanced work is being done for the project. MRT Co assumed  the project and asset owner of the KVMRT project from Prasarana effective Sept  1. (Bernama)

Fraser and Neave Holdings Bhd (F&N) will boost its operations in  Malaysia to ensure an uninterrupted supply of dairy products amid Thailand's  worst flood in decades, its chief executive officer Datuk Ng Jui Sia said.  F&N's facility in Rojana Industrial Park, Ayutthaya, under its unit F&N  Dairies (Thailand) Ltd, has ceased operations due to the massive floods  following unusually heavy moonson rains.  "We are looking at a back-up plan including utilising Petaling Jaya's  capacity to back it up and accelerate the construction of our new dairy  plant in Pulau Indah," (Bernama)

Public Bank yesterday reported a surprising increase in its  foreign  shareholding. Its foreign ownership rose to 25.47% as at end-September,  marking the third consecutive quarter of increase in its foreign shareholding.  The foreign ownership stood at 23.54% as at end March and 24.52% as at end June. As at 31 Dec 2010, its foreign ownership was higher at 26.52%. (Financial  Daily)

AirAsia is still looking for an opportunity to grow its business in Vietnam,  which has a lot of potential, said group deputy CEO  Datuk Kamarudin  Meranun. Although AirAsia’s joint-venture agreement with VietJet Aviation to launch a low-cost airline had been allowed to lapse, AirAsia might relook at  the deal.  The move would not derail AirAsia’s plan to expand in the region as it  had successfully formed several joint ventures, including in the  Philippines and with Japan’s All Nippon Airways. (Bernama)

An internal wing of the telecoms department (DoT) has ruled that the  3G  roaming agreements between Bharti Airtel (SingTel’s Indian associate),  Vodafone Essar and Idea Cellular (Axiata’s Indian associate) are 'illegal' and  has asked the department to initiate action against the three mobile phone  companies, including issuing show cause notices and imposing financial  penalties. If the government acts, the three GSM biggies may have to shell out  fines to the tune of Rs 500m (US$10m) for every circle where they have entered  into 3G roaming agreements. (Economic Times of India)

Proton Holdings has denied reports speculating it may be looking at selling a  stake in the company's loss-making subsidiary Group Lotus  to Genii Capital.  Proton said the alleged moves between Group Lotus and Genii Capital were  untrue. "We hope this statement will put all speculation to rest," said the  national carmaker. "Through this positive synergy, our priority now is to ensure  that the Lotus business turnaround plan is executed according to schedule.  Proton and Lotus have reached a juncture whereby the market is eagerly waiting  for Lotus' new products and all our energy and efforts have to be channelled  towards achieving this critical goal," said Proton. (Starbiz)

UMW Toyota Motor  has allocated more than RM200m to  develop its new  integrated quality hub (IQH) facility in Bukit Raja, Klang. The cost of the 35-ha  IQH facility, aimed at improving the delivery lead time of vehicles to customers,  is part of the company's RM1bn three-year investment plan until 2013. Much of  the IQH facility has been completed, while the body and paint centre is due to  commence operations by the first half of 2012. A production parts warehouse is  expected to start operations by the second half of 2012. (Starbiz)

Malaysia's natural rubber production in August dropped 4.5%  month-on-month to 95,731 tonnes, according to the Statistics Department.  However, year-on-year, the August figure was 18.7% higher. It said the  smallholdings sector contributed 94.8% of total production while the estate  sector’s share was only 5.2%. Meanwhile, exports of natural rubber in August  increased 40.7% month-on-month to 80,514 tonnes but year-on-year, it was  down by 5.8%, it added. The department said Standard Malaysian Rubber (SMR)  accounted for 94.8% of the exports, with 52% from SMR 20. (Starbiz)

Timber exports to the European Union could come to a halt in 2013 if Malaysia  fails to agree on the EU Timber Regulation, a regulation to curb illegal timber  trade that comes into force on Jan 1, 2013. Malaysia had balked on signing the  agreement after the EU added new terms and conditions that were unrelated to  the certification issue, said Second Resource Planning and Environment  Minister Datuk Amar Awang Tengah Ali Hassan yesterday."We are still holding  discussions with them and hope to reach a compromise on the matter. "But we have made our stand clear. They should not add  non-certification requirements to the FLEGT (Forest Law, Governance  and Trade)," he said. The EU had strayed from the legality and  sustainable issues by adding points on human rights, native customary  rights (NCR) land and even the issuance of timber licences by Sarawak  into the negotiations. He said even though the country's timber export to the EU was "not  significant" at around RM3.25bn annually, or only 2% of Sarawak's total  timber exports, it would like to sign the agreement that "we have agreed  on". (BT)

Malaysia's  advertising expenditure (Adex) is expected to record a double  digit growth this year, says Minister of International Trade and Industry Datuk  Seri Mustapa Mohamed. He said the forecast was based on the Adex for the first five months of  this year which has already reached RM4bn, 16% higher than last year.  "Despite the uncertain global business environment, it is still a good  time to be in advertising," (Bernama)

MAA Group cancelled a RM200m debt issuance programme it announced on  Aug 4, 2006, as it has made an early and full redemption of the remaining  outstanding notes of RM140m. (Malaysian Reserve)

Berjaya Land has scrapped plans to run Berjaya Air in Indonesia following  the termination of the JV between Berjaya Vacation Club and  PT Lion  Mentari. The JV was terminated as both parties could not finalise the terms of  the shareholders’ agreement. PT Lion Mentari is the operator of Indonesia’s  largest private carrier Lion Air. (Financial Daily)

UOA Development COO David Khor said a residential development was  being planned for the proposed purchase of a 9.8 acre piece of land and work  would commence next year. "It will be one of several projects - about five or six - being planned for next year," he said. No GDV is available. "We are unable to  comment on the share price. However, we are extremely pleased to share that  UOA has recorded a gross profit of RM161m in the first half of 2011." he said.  (Starbiz)

French banking group BNP Paribas has set up its locally incorporated bank in  Malaysia which will focus on both domestic and multinational corporate and  financial institutions to provide the full suit of banking products and services.  (Star Biz)

Touch 'n Go Sdn Bhd  plans to extend its reach to taxis, mass rapid transit  (MRT), RapidPenang buses, Iskandar Region community transportation  services and local theme parks to spur a cashless society, says CEO Abdul Karim  Md Lassim. Touch 'n Go aims to further target the local market and enable more  e-payment systems by increasing its penetration through partners of the public  transport and retail sectors.  He said the company is in the process to pilot the Touch 'n Go usage in  taxis. One of  the key issues is the cost of implementing the system  although it is convenient for the customers, he added.Touch 'n Go is in  the midst of preparing a proposal to enable customers to use e-ticketing  system on the MRT, which is due to be completed in 2016. (BT)

Malaysia has the potential to be the number one player in the global  Halal  food, cosmetic and pharmaceutical industry, says Minister of  International Trade and Industry, Datuk Seri Mustapa Mohamed. He said  Malaysia had proven its capabilities in many areas of the Halal industry, and  that it could repeat the success in the Halal food industry as well.  For the processed halal food and beverages industry, Malaysia's total  export was worth RM8.2bn last year with China, US, Pakistan, Japan  and Singapore being the main export destinations (Bernama).

Lynas Corp adds RM700m for Phase 2
Australian mining giant Lynas Corp has allocated an additional RM700m for expansion under Phase 2 for its controversial Lynas Advanced Materials Plant (LAMP) in Gebeng, Pahang. Half of the investment is spent in Malaysia for subcontracting requirements and materials purchase and some 40% is to purchase equipment and technical expertise offshore, it said. “Undertaken by lead contractor, Toyo-Thai Corp, these investments will gear up to an increased in production capacity of 22,000 tonnes rare earth oxide per annum,” it said in a statement. (Malaysian Reserve)

MTDC signs technology deals
Malaysian Technology Development (MTDC) signed three MOU with three parties at the KL International Venture Capital Symposium 2011 yesterday that are aimed at helping start-up companies and entrepreneurs as well as promoting the technology sector. The MoU signing ceremony was witnessed by Prime Minister Datuk Seri Najib Razak and involved Indonesia Investment Agency (IIA), Export-Import Bank of Malaysia Bhd (Exim Bank) and Northern Corridor Implementation Authority (NCIA). Under the MoU with IIA, both parties will work to set up a regional fund to support and encourage entrepreneurship. "Target groups of this proposed regional fund are entrepreneurs with feasible tech-based businesses and those who with high growth potential and sustainability," said MTDC. (BT)

TSM Global to make RM32.2m provision
Automotive parts manufacturer TSM Global is liquidating 85.5%-owned Kenseisha (M) SB. It expects the winding-up proceedings to result in some RM32.17m losses, being the entire cost of investment and advances to the latter. In a statement, TSM said the proceedings will not materially impact the group’s operations given that there had been minimal activity at Kenseisha following the devastating Japan earthquake and tsunami in March. (StarBiz)

20111013 1009 Local & Global Economic Related News.

The government is considering disbursing in Jan 12 the RM500 one-off cash  aid to households earning RM3,000 and below a month, Deputy Finance  Minister Datuk Dr Awang Adek Hussin said yesterday. While there was no fixed  timeframe for the payment, the disbursement would be made in stages from Jan  onwards, he said.  The government had identified the probable agencies to be entrusted  with the payment, with the Inland Revenue Board (IRB) being the lead  agency. Other agencies listed are BNM, BSN and Pos Malaysia.  IRB was picked because they have the income tax returns files of active  and non-active taxpayers while it would also use the e-Kasih database to  obtain information of the people who are really eligible for the aid. IRB CEO Datuk Dr Mohd Shukor Mahfar said the eligibility income  level would be calculated based on the total monthly income per  household and not an individual's income. (Bernama)  

Construction of the Klang Valley MY Rapid Transit (KVMRT) is expected to  begin in 2Q12 or 3Q12, MRT Co CEO Datuk Azhar Abdul Hamid said yesterday.  Currently, some advanced work is being done for the project, he said.  (Bernama)

The Ministry of Housing and Local Government and the Ministry of Natural  Resources and Environment will amend the  Strata Title Act 1985 and the  Building and Common Property Act 2007 to protect the interests of strata  property owners.  Housing and Local Government Minister Datuk Chor Chee Heung said  the amendment to the existing housing act was to compel developers to  apply for building strata titles within six months after the sales and  purchase (S&P) agreement was signed.  The amendment also enables the strata title to be obtained by the house  purchaser together with all the purchase documents including the  certificate of fitness for occupation (CFO). (Bernama)

Bank Negara Malaysia yesterday unveiled a newly developed  financial  education website called "Islamicfinanceinfo" that will complement the  current "Bankinginfo" and "Insuranceinfo" websites. The website features  information distinctive to Islamic finance to facilitate consumer understanding  of Islamic finance, it said. (Bernama)

Malaysia has dropped one place to rank 78th on economic freedom in the  Economic Freedom of the World: 2011 Annual Report, in line with the  decline worldwide and mainly due to the size of the government. The report by  the Institute for Democracy and Economic Affairs (IDEAS) was launched  yesterday at the Economic Freedom Asia Conference 2011.  “Actually, Malaysia's ranking has been falling for several years and this  is a worrying trend," the chief executive of IDEAS, Wan Saiful Wan Jan  said. From 2006 up to 2011, Malaysia ranked 53rd, 60th, 72nd, 66th,  77th and 78th, respectively.  He pointed out that the country had scored zero under the sub-category  of "Government Enterprises and Investments". However, Malaysia did  well in the field of "Regulation of Credit, Labour and  Business" and it  had been improving in this area since 1980. (Bernama)

US mortgage applications increased 1.3% from one week earlier, according  to data from the Mortgage Bankers Association’s (MBA) survey for the week  ended 7 Oct. The Refinance Index increased 1.3% percent from the previous  week.  The seasonally adjusted Purchase Index increased 1.1% from one week  earlier. The average contract interest rate for 30-year fixed-rate mortgages  backed by the FHA  increased to 4.06% from 4.05%. (MBA)

US job openings fell in Aug for the first time in four months, signaling a  sustained labor market recovery will take time to unfold. The number of  positions waiting to be filled dropped by 157,000 to 3.06m in Aug (3.21m in Jul),  according to Labor Department figures issued. (Bloomberg)

US Treasury Secretary Timothy F. Geithner said European leaders must  go beyond a planned  recapitalization of banks to resolve the continent’s  sovereign- debt crisis. “The most important problem is they have to make sure  that the major economies of Europe that are under pressure now are able to  borrow at affordable rates,” Geithner said. (Bloomberg)

US: Fed tempted by QE3 at latest meeting
The US Federal Reserve considered a new round of quantitative easing as an option at its September monetary policy meeting, suggesting that QE3 is still possible if the economy weakens further. “A number of participants saw large-scale asset purchases as potentially a more potent tool that should be retained as an option in the event that further policy action to support a stronger economic recovery was warranted,” say minutes of the meeting. (Bloomberg)

The US manufacturing industry rebounded in Sep from its lowest level  since Dec 09, helping to defy concerns about a double-dip recession. The Credit  Managers’ Manufacturing Index rose last month to 53.3 in Sep (52.1 in Aug), as  its gauge of sales jumped to the highest since Apr, according to the National  Association of Credit Management’s monthly survey of 600 executives.  (Bloomberg)

The US Senate passed a bill aimed at punishing China for keeping the yuan undervalued, triggering a backlash from Chinese officials who warned the  measure risks damaging trade relations and undermining the global recovery.  (Bloomberg)

US President Barack Obama’s drive to enact a US$447bn  jobs plan was  derailed by the US Senate, falling short of the 60 votes needed to advance what  he has proposed to revive a faltering economy. (Bloomberg)

Eurozone industrial production unexpectedly rose during Aug, official  figures showed, easing concerns that the crisis-torn eurozone was heading back  into recession in 3Q. Eurostat said industrial output increased by 1.2% mom in  Aug (+1.1% in Jul). Economists called for a 0.8% decline. (AP)

European Commission President Jose Barroso called for a reinforcement  of crisis-hit banks, the payout of a sixth loan to Greece and a faster start for a  permanent rescue fund to master Europe’s debt woes. (Bloomberg)

Slovakia: Clears road to completing euro bailout fund approval
Slovakia will approve Europe’s enhanced bailout fund today or tomorrow, completing the ratification process across the 17 euro countries as the region’s leaders prepare for a summit this month. Party leaders in Bratislava yesterday secured backing for the European Financial Stability Facility in a second vote, Robert Fico, head of the largest opposition party Smer, said. Prime Minister Iveta Radicova’s SDKU party in exchange agreed to back early elections to be held on March next year. (Bloomberg)

EU: Merkel still confident of EFSF passage
German Chancellor Angela Merkel remains optimistic that eurozone countries will pass an expanded European bailout fund at an EU summit later this month and that a solution to Europe's debt crisis would need more than the EFSF. "I am very certain that by 23 Oct we will have all the signatures of all the member states on the EFSF bill," Merkel said. (Bloomberg)

Japan’s  machinery orders rebounded in Aug on demand for electrical  products, signaling that companies are willing to invest even as global economic  growth slows and the yen stays near post-World War II highs. Bookings rose  11% mom in Aug (-8.2% in Jul), the fastest increase in a year, the Cabinet Office  said. Economists projected an increase of 3.9%. (Bloomberg)

Japan’s bank loans increased in Sep for the first time in almost two years as  the country’s biggest earthquake and tsunami spurred lending for reconstruction. Lending by 119 local banks rose 0.1% yoy to ¥420tr (US$5.5tr)  as of 30 Sep, the Japanese Bankers Association said, the first yoy increase in 23  months. (Bloomberg)

Thai Prime Minister Yingluck Shinawatra urged food producers not to  raise  prices as flooding cuts production and residents rush to stock up on  staple goods. (Bloomberg)

India’s industrial production rose 4.1% yoy in Aug (+3.8% gain in Jul).  Manufacturing grew 4.5% yoy in Aug (+3.1% in Jul), mining fell 3.4%, while  electricity rose 9.5%. Economists expected a 4.7% yoy gain in overall industrial  output. (Bloomberg)

India’s inflation must ease before the central bank can reduce interest rates,  Governor Duvvuri Subbarao said, signaling policy makers may maintain a tight  monetary stance for now. (Bloomberg)

The  Philippines cut its economic-growth targets for 2011 to 4.5% to 5.5%,  from the previous 5% to 6% and for 2012 to 5% to 6%, from the previous 5.5% to  6.5%. Separately, President Benigno Aquino presented a stimulus package to  spend PP72bn (US$1.66bn) on certain infrastructure projects and  poverty-alleviation programs in 4Q11. (Wall Street Journal)

Indonesia will maintain 2012 subsidized-fuel prices at this year’s level,  Melchias Mekeng, head of the parliament’s budget committee, said. The volume  of subsidized fuel will be kept at 40m kiloliters, valued at Rp123.6tr  (US$13.8bn), as previously proposed.   (Bloomberg Business Week)

In a defiant response to US Senate approval of a bill that would pressure China to let its  currency rise faster, the nation's central bank set the guideposts for  the yuan substantially lower on Wednesday and warned that the bill could  imperil further currency reform. (Wall Street Journal)

China unveiled a set of measures to ease a  funding squeeze among small  businesses, including allowing them to issue more bonds, tapping other sources  of financing allowing small banks to continue to implement "relatively" low  reserve requirement ratios (RRR) compared with big banks. (Reuters)

20111013 0951 Renewable Energy Related News.

WESTERN WIND ASKS SHAREHOLDERS TO SNUB ALGONQUIN'S BID
Oct 11 (Reuters) - Western Wind Energy  said it received an unsolicited takeover bid from Algonquin Power and Utilities  for at least C$150 million ($145.5 million) and urged its shareholders to reject what it called a "low-ball" offer.
In a separate statement, Algonquin said it had expressed "non-binding" interest in discussing a potential takeover with Western Wind's board of directors but denied making a formal bid.

ITALY EGP STARTS BUILDING 150 MW U.S. WIND FARM
MILAN, Oct 11 (Reuters) - Italy's biggest renewable energy company, Enel Green Power , has started construction of a 150-megawatt wind farm in Oklahoma in the United States in a $250 million project, the company said on Tuesday.
The wind farm, located in Kiowa County and Washita County, Oklahoma, will generate about 630 million kilowatt hours a year, enough to meet power needs of about 55,000 U.S. households once it is fully operational, the company controlled by Italy's biggest utility Enel  said in a statement.

JINKOSOLAR RESUMES PRODUCTION AT TROUBLED HAINING FACILITY
Oct 11 (Reuters) - JinkoSolar Holding Co  said it had resumed production at its troubled eastern China facility, which has an annual capacity of 1100 megawatt.
The Haining facility, which makes photovoltaic products, was temporarily shut down on Sept. 17 following violent protests over toxic wastes released from the plant that polluted a nearby river.

CONGRESS WATCHDOG PROBES SOLAR LOANS AFTER SOLYNDRA
WASHINGTON, Oct 10 (Reuters) - A top Republican congressional watchdog wants the Energy Department to turn over documents and emails about $4.7 billion in loan guarantees for four solar projects approved right before a Sept 30 deadline.
The last-minute approvals of the projects raise fears that "the evaluation of loan guarantees may have been rushed in order to meet a deadline," said Darrell Issa, chairman of the House Oversight Committee, in a letter to Energy Secretary Steven Chu.

SOLAR INSTALLERS THRIVE AS PANEL COSTS SLIDE
Oct 10 (Reuters) - A steep drop in the price of solar panels has been a boon to the companies that install the renewable energy systems on rooftops, and it could set off a wave of consolidation in the sector.
Those installers number in the hundreds across the country, focusing mostly on residential and small commercial market rooftop arrays rather than large-scale multi-megawatt systems under development in the U.S. Southwest.

TOUGHER TO BUILD NORWAY GRID WITH LOWER MARGINS
OSLO, Oct 10 (Reuters) - Lower operating margins on Norwegian power lines make it more difficult to conduct maintenance and build new lines, which could lead to delays, the head of the Norwegian power grid operator said.
Auke Lont, chief executive of Statnett, also said the high water levels at the reservoirs of Norwegian hydropower stations, which together with Sweden's provide about half of the Nordics' power supply, boded well for the coming winter, when power demand peaks.

GE INVESTMENT PUTS GREENKO'S WIND PLANS ON TRACK
LONDON, Oct 10 (Reuters) - London-listed clean energy producer Greenko  said a $50 million investment by a unit of GE  will put it on track to achieve 1 gigawatt (GW) of operational wind capacity by 2017.
A division of GE Energy Financial Services will invest the cash to support development of 500 megawatt (MW) of Greenko's wind energy projects, the company said on Monday.

GREEN ENERGY SECTOR CHEERS ONTARIO ELECTION RESULT
Oct 7 (Reuters) - Ontario's renewable energy industry breathed a sigh of relief on Friday and manufacturers looked forward to a surge in demand after voters in the province returned the Liberal Party to power, albeit without a majority.
Shares in renewable energy companies rose on expectations of an end to an industry slowdown caused by months of uncertainty over the future of the Liberal-sponsored green energy plan and its generous feed-in tariff (FIT) scheme for renewable power developers.

PETRA SOLAR CLOSE TO MIDDLE EAST ACQUISITION -CEO
Oct 7 (Reuters) - Solar services company Petra Solar is close to sealing an acquisition of an undisclosed company in the Middle East and is hiring across the globe as part of its push to build an international customer base, its chief executive said.
The privately held company, based in South Plainfield, New Jersey, declined to disclose more about the deal.
Petra, which equips panels to monitor the electrical grid and communicate data to utilities, has a $200 million contract to outfit 200,000 utility and streetlight poles with solar units for a Public Service Enterprise Group Inc  utility.

CHILE COURT LIFTS SUSPENSION ON HIDROAYSEN DAM WORK
SANTIAGO, Oct 6 (Reuters) - A Chilean appeals court lifted a suspension order on Thursday that will allow work to proceed on the $3.5 billion HidroAysen hydropower project, which aims to prevent energy shortages.
The project has been the target of massive protests due to alleged environmental concerns.

NEXTERA'S COMPETITIVE POWER UNIT CHIEF RESIGNS
Oct 5 (Reuters) - NextEra Energy Inc , the largest U.S. renewable energy producer, said the chief executive of its competitive power-generation unit is leaving the company, and it named its chief financial officer to head the unit.
Mitch Davidson has been at the helm of the competitive power unit, NextEra Energy Resources, since mid-2008.

CITIGROUP DOWNGRADES YINGLI TO SELL
Oct 5 (Reuters) - Citigroup downgraded Yingli Green Energy  to "sell" from "hold," citing soft solar demand until the second half of 2012,  and cut its price targets on two other Chinese solar companies.
"Our polysilicon supply/demand model shows significant  oversupply in the coming years meaning pricing should continue to decline," analysts led by Timothy Arcuri said in a note to clients.

20111013 0950 Biofuels Related News.

ITALY 2011 BIODIESEL OUTPUT SEEN DOWN 18 PCT-INDUSTRY
MILAN, Oct 7 (Reuters) - Biodiesel output in Italy, a major producer in the European Union, is expected to fall some 18 percent to about 600,000 tonnes this year hit by surging inflows of cheaper imports, a senior industry official said on Friday.
Italian biodiesel makers, who use mostly imported raw materials including palm oil and rapeseed, have been hit hard in the past couple of years by cheap imports which sometimes cost less than the raw materials, industry experts have said.

BIODIESEL INDUSTRY REJECTS EU LAND USE IMPACT STUDY
BRUSSELS, Oct 7 (Reuters) - Europe's biodiesel industry rejected the findings of a draft EU study showing that the cultivation of rapeseed to make road transport fuels is worse for the climate than using conventional diesel.
The European Biodiesel Board (EBB) said on Friday the study's central finding -- that the effects of indirect land use to produce most types of biodiesel cancel out any theoretical emissions savings -- was "highly debatable and unscientific".

THAILAND AIMS TO BE REGIONAL ENERGY HUB, TO UP OIL RESERVES
BANGKOK, Oct 6 (Reuters) - Thailand aims to revive a long-stalled plan to become an oil trading and biofuel hub in Southeast Asia, challenging Singapore's dominance, its new energy minister said on Thursday.
The net oil importer plans to boost its crude reserves, excluding refined oil products, to 29 days from 18 days now to improve energy security, said Pichai Naripthaphan, as consumers face volatile crude prices which continue to hold above $100 a barrel. .

US BILL WOULD EASE ETHANOL RULE WHEN CORN STOCKS LOW
WASHINGTON, Oct 5 (Reuters) - Two dozen U.S. lawmakers are seeking to dilute a requirement to blend increasing amounts of ethanol into motor fuel, in a move that would alleviate upward pressure on food and feed prices when corn supplies are short.
Under a bill unveiled on Wednesday, Congress would reduce the mandate for ethanol whenever stocks of corn, used to make the biofuel, are tight.

US ETHANOL OUTPUT CLIMBS 2.6 PCT BUT STILL SLUGGISH
Oct 5 (Reuters) - U.S. ethanol production rebounded 2.6 percent last week though output remained sluggish, and stocks fell due to strong demand, the government said on Wednesday.
The Energy Information Administration reported that U.S. ethanol production totaled 863,000 barrels per day in the seven days to Sept. 30, up 22,000 barrels per day from the previous week but still the second-lowest level since early May.

INDUSTRY SPLIT EMERGES OVER BIOFUELS' INDIRECT IMPACT
BRUSSELS, Oct 5 (Reuters) - European bioethanol producers have broken ranks and urged EU policymakers to introduce rules on the indirect climate impacts of biofuels that distinguish between "good and bad biofuel pathways", Reuters has learned.
The call is the first sign of a split within the EU biofuel industry on the controversial issue of indirect land use change (ILUC), which threatens to undermine the green credentials of some biofuels due to their role in diverting food into fuel tanks.

20111013 0949 Global Market Related News.

Asian Stocks Rise on Recovery Optimism (Source: Bloomberg)
Asian stocks rose for a sixth day as European leaders edged closer to a plan for taming the debt crisis and the U.S. Federal Reserve said it talked about more asset purchases, reducing concern about a global recovery. Honda Motor Co., Japan’s second-largest automaker by revenue, gained 1.9 percent in Tokyo. Sony Corp. climbed 2.1 percent, even after saying it recalled 1.6 million Bravia flat- panel TVs. BHP Billiton Ltd. (BHP), the world’s biggest mining company, rose 1.2 percent in Sydney after metal prices rallied yesterday. Iluka Resources Ltd. (ILU), the world’s biggest zircon producer, jumped 6.1 percent after reporting that third-quarter sales more than doubled. The MSCI Asia Pacific Index rose 0.9 percent to 117.23 as of 9:41 a.m. in Tokyo, taking the measure’s advance in the past six days to 9.2 percent.

U.S. Senate Shelves Obama’s $447B Job Plan (Source: Bloomberg)
President Barack Obama’s effort to enact a $447 billion jobs plan was derailed by the U.S. Senate, falling short of the 60 votes needed to advance what he has proposed to revive a faltering economy. Two Democrats joined the Republican minority to block the plan in a test vote. Yesterday’s tally was 50-49, shelving the measure in its current form. “We will not take no for an answer,” Obama said today at an American Latino Heritage Forum sponsored by the White House and the Interior Department. The president said lawmakers will hold separate votes on the stimulus portions of his proposal including spending to hire more teachers and pay for road and bridge improvements and middle-class tax cuts. Senate Majority Leader Harry Reid and Minority Leader Mitch McConnell today said they will start looking for specific provisions that can get enough support to pass.

Some Fed Officials Sought to Retain QE3 Option (Source: Bloomberg)
The Federal Reserve said some officials last month wanted to keep further asset purchases as an option to boost the economy as policy makers saw “considerable uncertainty” that U.S. growth will pick up. Most participants favored giving additional information on the central bank’s goals and how they influence the Fed’s decisions, and most “saw advantages” in tying the Fed’s near- zero interest rates to more specific developments in the economy, the Fed said in minutes of the Sept. 20-21 session, released today in Washington. Such changes may be expressed in ways other than the post-meeting statement, the Fed said.
The debate culminated in the Federal Open Market Committee’s decision to replace $400 billion of Treasuries in the central bank’s portfolio with longer-term debt to reduce borrowing costs. Three officials dissented. Chairman Ben S. Bernanke said last week the so-called Operation Twist program is a “significant step but not a game changer” for reviving growth and reducing unemployment stuck near 9 percent.

Senate Triggers China Backlash as Bill Targets Yuan’s Value (Source: Bloomberg)
The U.S. Senate passed a bill aimed at punishing China for keeping the yuan undervalued, triggering a backlash from Chinese officials who said the measure risks damaging trade relations and undermining the global recovery. The Senate voted 63-35 for the legislation, which would let U.S. companies seek duties to compensate for “misaligned” currencies. House Speaker John Boehner said today he has “grave concerns” with the bill, casting doubt on whether it will become law. China protested in government statements. Failure to allow faster gains in the yuan against the dollar has impeded a shift in demand toward emerging markets that would bolster the global economy, according to Federal Reserve Chairman Ben S. Bernanke. The yuan has appreciated 10 percent, adjusted for inflation, since mid-2010, a pace that’s too slow, Treasury Secretary Timothy F. Geithner said yesterday.

U.S. Will Intensify Pressure on Europe at G-20, Brainard Says (Source: Bloomberg)
The U.S. will intensify its call for forceful action to stem Europe’s debt crisis at a meeting of Group of 20 nations in Paris this week, the Treasury Department’s top international official said. “The consequences of delay are growing,” Lael Brainard, Treasury undersecretary for international affairs, said in a press briefing in Washington today. “Against a backdrop of elevated risks to the recovery, the United States will intensify our call for resolute action.” Treasury Secretary Timothy F. Geithner will attend the G-20 finance ministers meeting Oct. 13-14. European officials are trying to resolve the continent’s debt crisis, which has pushed Greece to the brink of default, shaken world markets and fueled speculation the 17-nation euro currency might not survive in its current form.

Goldman’s O’Neill Says U.K., U.S. Economies Need More ‘Targeted’ Policies (Source: Bloomberg)
Goldman Sachs Asset Management Chairman Jim O’Neill said conventional quantitative easing may not be enough for the U.S. and U.K. economies and more “targeted” policies are needed to boost confidence and growth. “It’s not obvious to me that conventional QE in the U.K. or the U.S. has got that much bang for its buck,” O’Neill said in an interview with Maryam Nemazee on Bloomberg Television’s “The Pulse” program in London today. “More imaginative QE or forms of specific targeted easing, probably involving more infrastructure or doing something to get bank funding spreads down, would be more likely to get a stronger result.” His comments were echoed by former Bank of England policy maker Sushil Wadhwani, who said today that global central banks need to do “more creative” forms of monetary policy to prevent the global economy slipping into a recession.

Job Openings Fell in August, Hiring Climbed (Source: Bloomberg)
Job openings in the U.S. fell in August for the first time in four months, signaling a sustained labor market recovery will take time to unfold. The number of positions waiting to be filled dropped by 157,000 to 3.06 million, according to Labor Department figures issued today in Washington. Hiring increased by 38,000 to 4.01 million. Payrolls climbed by 103,000 workers in September, a better- than-forecast outcome that included 45,000 returning Verizon Communications Inc. strikers. With unemployment hovering above 9 percent, the economy slowing and concerns of a European default mounting, employers may be slow to further boost hiring. “Companies don’t want to risk making additional hires with the outlook so uncertain,” Chris Rupkey, chief financial economist at Bank of Tokyo-Mitsubishi UFJ Ltd. in New York, said before the report. “Corporations are playing it very close to the vest and keeping payrolls lean.”

Dow Erases 2011 Decline on Europe’s Plan (Source: Bloomberg)
U.S. stocks rose, briefly erasing the Dow Jones Industrial Average’s 2011 loss, as European leaders provided a road map to tame the debt crisis and the Federal Reserve said it discussed further asset purchases. Financial and industrial shares rose the most among 10 groups in the Standard & Poor’s 500 Index. JPMorgan Chase & Co. (JPM) and Bank of America Corp. (BAC) jumped at least 2.7 percent, following a rally in European lenders. General Electric Co. (GE) and 3M Co. (MMM) added more than 1.6 percent to pace gains among companies most- reliant on economic growth. PepsiCo Inc., the largest snack-food maker, increased 2.9 percent as profit beat analysts’ estimates. The S&P 500 advanced 1 percent to 1,207.25 at 4 p.m. New York time, rallying 4.5 percent in three days. The index rose as much as 2.1 percent earlier before paring gains in the final hour of trading. The Dow climbed 102.55 points, or 0.9 percent, to 11,518.85. The 30-stock gauge is down 0.5 percent for 2011.

U.S. Joblessness Tops 6% in 2015 in Best Case: Chart of the Day (Source: Bloomberg)
It will take at least until 2015 for the U.S. jobless rate to drop to 6 percent if the labor force and employment keep growing at the current pace. The CHART OF THE DAY shows the projected path of unemployment assuming monthly payroll gains match the 124,167 increase averaged over the past 12 months and the labor force expands as it’s done since January 2010. “If anything, the estimate of when we would return to the target unemployment rate is optimistic,” said Patrick O’Keefe, chief of economic research at JH Cohn LLP in Roseland, New Jersey, and a former deputy assistant secretary at the Labor Department. “This jobs recovery is so weak that it will take years before we get back to an unemployment rate that, prior to the recession, would have been considered high.”

Japanese Stocks Advance as Europe Considers Solutions to Tame Debt Crisis (Source: Bloomberg)
Japanese stocks rose, with the Nikkei 225 (NKY) Stock Average heading for its highest close in almost a month, as European leaders offered a road map to tackle the debt crisis and machinery makers gained on rising orders. Mazda Motor Corp., the Japanese carmaker most dependent on European sales, jumped 5.1 percent. Fanuc Corp., the world’s biggest maker of controls that run machine tools, gained 2.1 percent. Mitsubishi Corp., a trader that gets about 43 percent of sales from commodities, increased 2.2 percent after a gauge of metals rallied yesterday in London. The Nikkei 225 Stock Average rose 1.1 percent to 8,834.50 as of 9:55 a.m. in Tokyo, poised for its highest close since Sept. 16. The broader Topix gained 0.9 percent to 760.34, with more than twice times as many shares advancing as declining.

BOJ Members Said More Easing May Become Needed, Minutes Say (Source: Bloomberg)
Several Bank of Japan (8301) board members said that more monetary easing steps may become needed depending on economic developments, a record of the board’s Sept. 6-7 meeting said. The members said that downside risks to the economy remain high, with the outcome of the European sovereign debt crisis unclear, the record published in Tokyo today said.

Singapore Economic Growth Seen Near Zero (Source: Bloomberg)
Singapore’s economic growth probably nearly stalled last quarter as a faltering global recovery hurt exports, putting pressure on the central bank to join nations from Indonesia to Pakistan in easing monetary policy. Gross domestic product probably rose an annualized 0.8 percent last quarter from the previous three months, when it fell 6.5 percent, according to the median of 16 estimates in a Bloomberg News survey. The Monetary Authority of Singapore, which uses the island’s dollar as its main tool to manage inflation, may slow or end currency appreciation, a separate survey showed. Both reports will be released at 8 a.m. tomorrow. Any return to recession for the global economy would threaten a Singaporean economy that saw an 11 percent collapse in exports in 2009. With a potential Greek default threatening to reverberate through world financial markets, Singapore may shift to stimulus measures just six months after its last monetary tightening.

South Korea Free-Trade Agreement Passes U.S. Senate, Biggest Since Nafta (Source: Bloomberg)
The U.S. Senate voted final passage for legislation on the U.S.-South Korea free-trade agreement, the biggest for the U.S. since the North America Free-Trade Agreement in 1994. The Senate voted 83-15 tonight, and will send the measure to President Barack Obama for his signature.

India Inflation Must Ease Before Rates Reduced: Subbarao (Source: Bloomberg)
India’s inflation must ease before the central bank can reduce interest rates, Governor Duvvuri Subbarao said, signaling policy makers may maintain a tight monetary stance for now. “We are deeply sensitive in making India a low interest- rate regime but that will take time,” Subbarao said in the northern Indian city of Jaipur yesterday. “First, we need to bring inflation down in order to bring interest rates down.” Emerging-market nations from Brazil to South Korea have turned from fighting price gains to supporting growth as a struggling U.S. recovery and deepening debt crisis in Europe threaten the global economy. In India, the fastest inflation in more than a year is sustaining pressure for higher borrowing costs even as consumer demand wanes.

Australia Unemployment Falls; Aussie Jumps (Source: Bloomberg)
Australia’s unemployment rate declined for the first time since March as employers last month added more workers than economists forecast, boosting bond yields and sending the local currency to a three-week high. The number of people employed rose by 20,400, from a revised 10,500 fall in August, the statistics bureau said in Sydney today. That was more than twice the median estimate for a 10,000-job gain in a Bloomberg News survey of 24 economists. The jobless rate fell to 5.2 percent from 5.3 percent. The Reserve Bank of Australia last week left its benchmark interest rate unchanged at 4.75 percent, citing a “softer” labor market and consumers who are “more concerned about the possibility of unemployment rising.” The RBA signaled less concern about wage pressure from a mining investment boom and said there’s more scope to cut rates if necessary.

European Stocks Rise to Two-Month High; Alpha Bank, ASML Climb (Source: Bloomberg)
European stocks climbed to a two- month high as the European Commission’s Olli Rehn said the debt crisis can be resolved, outweighing earnings from Alcoa Inc. (AA) that missed estimates. Greek banks rallied, with Alpha Bank SA and National Bank of Greece SA (ETE) soaring at least 15 percent. Burberry Group Plc (BRBY), the U.K.’s largest luxury-goods maker, climbed 3.5 percent as sales topped forecasts. ASML Holding NV (ASML) added 6.3 percent after Europe’s biggest semiconductor-equipment maker reported income that beat projections. YIT Oyj (YTY1V), Finland’s largest builder, slid 4.1 percent after cutting its profit outlook. The Stoxx Europe 600 Index rose 1.7 percent to 239.16 at the close of trading, the highest since Aug. 4. The measure has rallied 10 percent since Oct. 4 for the biggest six-day gain since January 2009. The gauge has still tumbled 18 percent from its high on Feb. 17 amid concern that the sovereign debt crisis in Europe will spread from Greece to the larger economies of Italy and Spain.

German Stocks Gain for Sixth Day; Carmakers, Chemicals Lead Advance (Source: Bloomberg)
German stocks advanced, for their biggest six-day gain since 2008, after European Union Economic and Monetary Affairs Commissioner Olli Rehn said there is a fairly good chance of averting calamity in the region. Carmakers and chemical firms led the increase. Bayerische Motoren Werke AG (BMW) and Daimler AG (DAI) rose at least 2 percent. K+S AG and Bayer AG (BAYN) also added more than 2 percent. Phoenix Solar AG (PS4) sank 21 percent after lowering its yearly outlook. The benchmark DAX Index (DAX) advanced 2.2 percent to 5,994.47 at the close in Frankfurt. The gauge has surged 15 percent over the past six days, the most since November 2008. The measure has still fallen 20 percent from this year’s high on May 2 amid concern global economic growth is slowing and policy makers are struggling to contain the European debt crisis. The broader HDAX Index (HDAX) climbed 2.2 percent today.

U.K. Stocks Advance on Euro-Area Optimism; Banks, Insurers Rally (Source: Bloomberg)
U.K. stocks climbed to their highest level in more than two months, led by a rally in financial and mining companies, amid growing optimism that euro-area policy makers will contain the region’s debt crisis. Barclays Plc (BARC) and Aviva Plc (AV/) both jumped more than 5 percent in London trading. Antofagasta Plc (ANTO) and Randgold Resources Ltd. (RRS) climbed with metal prices. Burberry Group Plc (BRBY) gained 3.5 percent after the retailer posted sales that topped analysts’ estimates. The benchmark FTSE 100 Index (UKX) gained 46.1, or 0.9 percent, to 5,441.8 at the 4:30 p.m. close in London, its highest level since Aug. 3. The gauge earlier fell as much as 0.9 percent. The FTSE All-Share Index gained 1 percent, while Ireland’s ISEQ Index rose 1.9 percent in Dublin.

Slovakia Clears Road to Complete Approval of Enhanced Euro Bailout Fund (Source: Bloomberg)
Slovakia will approve Europe’s enhanced bailout fund today or tomorrow, completing the ratification process across the 17 euro countries as the region’s leaders prepare for a summit this month. Party leaders in Bratislava yesterday secured backing for the European Financial Stability Facility in a second vote, Robert Fico, head of the largest opposition party Smer, said. Prime Minister Iveta Radicova’s SDKU party in exchange agreed to back early elections to be held on March 10. “We will proceed with ratification of the bailout mechanism immediately after the constitutional law on early elections is approved,” Fico told reporters. The timing of the EFSF vote depends on how quickly lawmakers get through tomorrow’s debate and ballot on the early election, said Mikulas Dzurinda, the chairman of Radicova’s party.

Spain’s ‘Blank Check’ May Offer Rajoy Room to Reduce Deficit: Euro Credit (Source: Bloomberg)
Spaniards will probably hand opposition head Mariano Rajoy a record mandate in elections next month. Unwilling to risk his lead in polls, the People’s Party leader hasn’t told voters what he’d do with it. Five weeks before the Nov. 20 election that polls suggest he’ll win, Rajoy hasn’t said how he’ll cut spending or change labor rules. He’s pledged tax breaks for small businesses, said he “wouldn’t like” to cut pensions and vowed a “true” bank restructuring, without saying what that means. Voters don’t know who would be his finance minister. That hasn’t stopped Spaniards from telling pollsters they’ll hand the PP its largest-ever majority as the country struggles with Europe’s highest jobless rate amid a three-year economic slump. With an outright majority and few election pledges to deliver on, Rajoy may be free to slash the budget deficit, overhaul labor rules and shield lenders from the sovereign-debt crisis.

Unemployment in U.K. Increases to Highest Level in 15 Years With 8.1% Rate (Source: Bloomberg)
The U.K. unemployment rate rose to the highest in 15 years in the three months through August, adding pressure on the government to loosen its fiscal squeeze as the economy struggles to avoid recession. The jobless rate increased to 8.1 percent from 7.9 percent in the three months through July, the Office for National Statistics said in London today. The number of unemployed reached 2.57 million, the most since 1994. In September, jobless claims rose for a seventh month. They climbed 17,500, less than the 24,000 forecast in a Bloomberg News survey. Chancellor of the Exchequer George Osborne has pledged to maintain the biggest fiscal squeeze since World War II even as the outlook for the recovery deteriorates. Bank of England policy makers restarted their asset-buying program last week amid an escalating debt crisis in Europe and slowing global growth, a move Governor Mervyn King described as a response to what may be the worst financial crisis ever.

20111013 0949 Global Commodities Related News.

Corn (Source: CME)
US corn futures finished weaker as U.S. federal forecasters increase their inventory projection more than expected. Profit-taking adds pressure after a limit-up session Tuesday. Yet, the market could feel longer-term support from the USDA's report because it cut the output forecast for the third month in a row, says Brian Hoops of Midwest Market Solutions. "I think from a longer-term standpoint, there are some positives out of this report." CBOT December corn slips 4 1/4c to $6.40 3/4 a bushel.

Wheat (Source: CME)
US wheat futures closed sharply lower after USDA raised its supply outlook 10% from last month. The increase was a surprise as traders had predicted inventories would decline due to a reduced production estimate issued two weeks ago. Yet, weakened demand for the crop expanded supplies. USDA cut its outlook for US exports and feed use as foreign buyers look to other countries for grain. CBOT December wheat drops 34c to $6.26 3/4 a bushel; KCBT December falls 18 3/4c to $7.11; MGEX December sinks 34 3/4c to $9.03 3/4.

Rice (Source: CME)
US rice futures closed higher as federal forecasters lower their output forecast 2.1% from last month to a 3-year low. The crop suffered damage from hot, dry weather in the South this summer. "The decline is entirely due to a decrease in yield," the USDA says in its monthly report. Projected season-ending supplies are lowered 5%. CBOT November rice jumps 37 1/2c to $16.36 1/2 per hundredweight.

Wheat, Corn Futures Decline as USDA Forecasts Rising World Inventories (Source: Bloomberg)
Wheat futures tumbled the most this month and corn fell after the U.S. government boosted its estimates for global stockpiles, signaling increased supplies for makers of food, animal feed and ethanol. World inventories of wheat before next year’s Northern Hemisphere harvests may total 202.37 million metric tons, the most since 2002, the U.S. Department of Agriculture said today in a report. Global corn reserves were pegged at 123.19 million tons, 4.9 percent higher than a September forecast. Both projections exceeded analysts’ expectations. The USDA also cut its estimates for exports of both commodities. Corn and wheat prices this year reached the highest since touching records in 2008, as rising demand for meat boosted consumption of grain used in livestock feed, and as refining of grain-based fuels increased. While production of both crops will decline this year in the U.S., the world’s largest exporter, output is growing elsewhere.

Wheat Extends Biggest Decline This Month as USDA Raises Global Stockpiles (Source: Bloomberg)
Wheat futures dropped, extending their biggest decline this month after the U.S. government boosted its estimate for global stockpiles. Soybeans fell and corn was little changed. World inventories of wheat before next year’s Northern Hemisphere harvests may total 202.37 million metric tons, the most since 2002, the U.S. Department of Agriculture said yesterday in a report. Global corn reserves were pegged at 123.19 million tons, 4.9 percent higher than a September forecast. Both projections exceeded analysts’ expectations. The USDA also cut its estimates for exports of both commodities. Corn and wheat prices this year reached the highest since touching records in 2008, as rising demand for meat boosted consumption of grain used in livestock feed, and as refining of grain-based fuels increased. While production of both crops will decline this year in the U.S., the world’s largest exporter, output is growing elsewhere.

USDA Cuts Forecasts For Corn, Soy Output (Source: CME)
Federal forecasters cut their estimate for the U.S. corn crop for the third straight month but still increased their supply outlook because more grain than expected was left over from last year's harvest. The U.S. Department of Agriculture, in a monthly crop report released, said farmers will produce 12.433 billion bushels of corn this year, down from the 12.497 billion bushels the government predicted a month ago. The harvest will still be large by historical standards but down slightly from last year. The forecast for inventories left over at the end of August 2012, the end of the crop's marketing year, increased more than anticipated to 866 million bushels from 672 million last month. A smaller increase was expected after the government said two weeks ago that farmers and grain elevators had more grain than expected in storage. Still, supplies will remain at their lowest level since the mid 1990s, keeping grain users on edge.
"At the end of the day, 866 million bushels isn't blowing anybody's socks off," said Jack Scoville, vice president of Price Futures Group in Chicago. The USDA in the monthly report also had a dimmer outlook for the soybean crop. Forecasters surprised traders by lowering the prediction for the upcoming crop to 3.06 billion bushels from 3.085 billion in September. The USDA increased its outlook for domestic wheat supplies, bucking expectations for a slight cut in inventories. Farm commodities tumbled as the increased outlooks for corn and wheat supplies weighed on prices. Corn for December delivery recently traded down 6 cents, or 0.9%, to $6.39 a bushel on the Chicago Board of Trade. Soft red winter wheat for December delivery sank 36 3/4 cents, or 5.6%, to $6.24 a bushel. The losses dragged down soybeans, with the November contract slipping 3 1/2 cents, or 0.3%, to $12.32 a bushel.
"It's like breathing a sigh of relief that the stocks outlook is not getting tighter," said Dan Manternach, agriculture services director for Doane Advisory Services, an agricultural advisory firm in St. Louis. Traders had expected the corn crop would continue to shrink because flooding last spring washed out acres, preventing farmers from harvesting all the acres they intended. The USDA cut its forecast for harvested acres by 500,000 acres from last month, to 83.9 million acres. The USDA also lowered its forecast for harvested soybeans, to 73.7 million acres from 73.8 million. The government left unchanged its estimate for the average number of bushels of corn that will be produced per acre, surprising traders who were expecting an increase due to reports of better-than-expected harvest results. The steady yield outlook sustained concerns about crop damage due to hot, dry weather this summer. "The corn yields started out good but have been tailing off as we get later on into the harvest," Scoville said.
Market watchers generally expected yield boosts to offset the loss of harvestable acres. They didn't get it. The USDA lowered its estimate for the average soybean yield to 41.5 bushels per acre, down from 41.8 bushels per acre. As for wheat, the USDA raised its forecast for wheat ending stocks to 837 million bushels, up from 761 million bushels a month ago. Cotton was another surprise. The USDA raised its forecast for U.S. cotton production by 0.3% to 16.61 million bales. Most analysts had debated not whether the crop forecast would be reduced but by how much, mainly due to the record drought in top producing state Texas. But the USDA said higher production out of Georgia offset a reduction from Texas. Cargill 1Q Income Sinks On Volatile Markets.

China Buys 1.5 Million Tons Of U.S. Corn (Source: CME)
China bought about 1.5 million metric tons of corn Tuesday, likely mostly from the U.S., two executives familiar with the matter said separately. China had been widely expected to re-enter the corn market as U.S. corn prices, reeling due higher-than-expected supply estimates, fell 20% since early September. Soaring feed demand and depleted corn reserves have brought China back to the global grain market after a 15-year hiatus, with corn imports to the world's second-largest corn consumer in August reaching the highest monthly volume in 10 months. China Grain Reserves Corp., or Sinograin, China's official grain stockpiling agency, made the purchases, the executives with a state grain processing and trading company said. The sharp erosion in global corn prices last month came amid sharply higher Chinese spot prices. Corn prices in the major processing province of Shandong have risen more than 30% since the start of the year.
China bought 1.6 million tons of corn last year, mostly from the U.S., setting a pattern of aggressive buying on dips in prices in order to replenish stockpiles. China is projecting a record grain harvest this year of likely above 550 million tons, but analysts say China's import appetite could rise even more sharply in coming years, to around 9 million tons a year. The China Feed Industry Association said last month that by 2015, China will likely face a 15 million-ton shortfall in corn output. Sinograin spokesman Cheng Bingzhou said he was unaware of Tuesday's deal and declined to comment further. The exact amount of the purchase from the U.S. wasn't clear. One executive said the deal was for at least 900,000 tons. Sinograin is also in the market for soybeans and soyoil. The company bought about 100,000 tons of soyoil and 700,000 tons of soybeans from either U.S. or South American suppliers, one of the executives said.
China is targeting 2 million tons of soybean purchases, the second executive said. U.S. soybean prices tumbled about 18% last month, weighed by optimistic supply forecasts and a gloomy global growth outlook. China may have bought its latest soyoil imports from Argentina. About 200,000 tons of Argentinian soyoil was slated for export to China this year, Agriculture Minister Julian Dominguez has said. The South American nation hopes to step up corn exports to China in early 2012 after finalizing a market access agreement by the end of this year, Dominguez said.

EU Proposal Would Cap Subsidies At EUR300K Per Farm (Source: CME)
The European Commission presented plans to limit payments to big farms and set aside more land, as part of changes to its $75-billion-per-year farm subsidy program. The aid makes up two-fifths of the European Union's annual budget and is hotly debated when the EU writes its budget every seven years. Officials now face more than a year of wrangling to shape the final proposals into reforms that will be implemented after 2013, with the Commission's new proposal forming the basis for discussions. The priorities in the plan are "food security, sustainable use of natural resources and growth," said Dacian Ciolos, the EU's agriculture commissioner. A key proposal is the capping of payments at EUR300,000 per year per farm, which would save EUR2.5 billion on direct subsidies per year. The EU has come under criticism over the large amount of subsidizies allocated to corporate mega-farms. Currently, a quarter of the largest farms receive 74% of the money.
The Commission also wants to make a third of direct payments contingent on farmers following new rules on protecting the environment. The most controversial condition: the obligation to set aside at least 7% of arable land to "ecological focus areas," such as forests or buffer strips. Sugar quotas, long a staple of EU agriculture policy, "will not be extended beyond 2015," the Commission said. During the debate farmers and countries who rely on the money will be fighting to keep as much of it as possible. For example, France, the biggest recipient of aid, tracks the EU's rules as a vital policy issue. The EU's biggest farm lobby, Copa, lashed out at the Commission's plan as anti-farmer. "It is essential that direct payments to farmers are maintained if the agricultural sector is to continue to assure these benefits," said Gerd Sonnleitner, the lobby's president. "EU farmers' income is on average only half that of average earnings.
This is why currently, many young farmers are not willing to take over the farm and older farmers are leaving the sector in view of the drastic economic situation." The Commission's plan will now be debated in the European Parliament and by the EU's 27 member governments. It is they, not the Commission, that manages the final payouts, but they are legally obliged to follow the same rules.

US grain harvest speeds up but still lags
CHICAGO, Oct 11 (Reuters) - The U.S. corn and soybean harvests advanced rapidly last week under nearly perfect weather conditions in the U.S. Corn Belt, but each still lagged last year's pace, traders and analysts said early on Tuesday.
The U.S. Agriculture Department's weekly crop progress report on Tuesday afternoon is expected to show the corn harvest at 35 percent complete, compared with 21 percent a week ago and 51 percent in the same week last year, a Reuters Poll of 10 analysts and traders found.

US soy, wheat dip after rally, corn extends gains
SINGAPORE, Oct 12 (Reuters) - U.S. soybeans fell 0.7 percent , while wheat slipped 0.5 percent, trimming gains after last session's biggest rally in more than a year amid concerns over the euro zone debt crisis.
"It looks like profit-taking after gains last night or just rebalancing prior to the USDA report as no one wants to take a new position ahead of a report that could result in a limit down or limit up," said Adam Davis, a senior commodity analyst at Merricks Capital in Melbourne.

Vietnam rice export defaults to hit 520,000 T-newspaper
HANOI, Oct 12 (Reuters) - Vietnam, the world's second-largest rice exporter, could default on deliveries of 520,000 tonnes of the grain this year as exporters failed to buy on domestic markets for loading due to a price surge, a state-run newspaper reported on Wednesday.
The projected defaults would account for 7 percent of Vietnam's annual export volume forecast at 7.5 million tonnes this year, breaking the record high of 6.83 million tonnes in 2010.

Philippines says typhoon damage climbs to 1 mln T rice
MANILA, Oct 12 (Reuters) - Unmilled rice damaged by two recent typhoons in the Philipppines has climbed to about 1 million tonnes, a senior agriculture official said on Wednesday.
The latest estimate was higher than a previous damage report of 760,000 tonnes unmilled rice.

Philippines' Aquino: No need for more rice imports in 2011
MANILA, Oct 12 (Reuters) - Philippine President Benigno Aquino said on Wednesday the country does not need to import more rice for this year's supply given ample stocks despite crop losses from recent typhoons.
The Southeast Asian country bought 860,000 tonnes of rice this year, just a third of the record purchases of 2.45 million tonnes bought for 2010 needs.

Russia mulls export duty to keep grain in country
MOSCOW, Oct 11 (Reuters) - Russia is looking at a protective export duty to keep grain in the country if exports exceed 23-24 million tonnes in the current crop year, First Deputy Prime Minister Viktor Zubkov told reporters on Tuesday.
"This year the crop is going to be 90, maybe 92 million tonnes," Zubkov said.

French wheat sales to N.Africa seen lower in 11/12
ALGIERS, Oct 11 (Reuters) - France will almost halve soft wheat sales to Morocco in the 2011/2012 season because of lower output in France, the French grain export body said on Tuesday.
Jean-Pierre Langlois-Berthelot, chairman of France Export Cereales, also told Reuters that French soft wheat exports to Morocco's north African neighbour Algeria would slightly decline during the 2011/12 campaign.

Floods in Pakistan damage 3.7 pct of total crop area- FAO
MILAN, Oct 11 (Reuters) - Floods in Pakistan have damaged at least 880,000 hectares of standing crops, including rice, maize, cotton, sugar cane, fruit orchards and vegetables, which represent about 3.7 percent of total national crop area, the United Nations' food agency said on Tuesday, citing preliminary official estimates.
"Damage to the current paddy crop is moderate and is estimated by FAO and Pakistan's space agency (SUPARCO), as of 20 September, at about 252,700 tonnes, or 2.5 percent of the normal national production," the UN's Food and Agriculture Organisation (FAO) said in an update on the flood situation in Pakistan.

Dryness returns to U.S. Plains wheat belt
CHICAGO, Oct 11 (Reuters) - Dry weather will return to the U.S. Plains hard red winter wheat region after weekend rains gave crop prospects a lift, an agricultural meteorologist said on Tuesday.
"There will be a few light rains in eastern Oklahoma and eastern Texas on Wednesday, but mostly dry weather for at least the next week to 10 days," said John Dee, meteorologist for Global Weather Monitoring.

French July-Aug wheat exports up 4 pct - customs
PARIS, Oct 11 (Reuters) - France exported 1.55 million tonnes of soft wheat in August, bringing the total since the start of the 2011/12 season on July 1 to 2.8 million tonnes, customs data showed on Tuesday.
The total so far this season was 4 percent higher than in the same period in 2010/11, the data showed.

Sugar, coffee extend gains as dollar weakens
LONDON, Oct 12 (Reuters) - ICE sugar, coffee and cocoa futures extended gains in early trade, underpinned by a weakening dollar with a focus on steps to resolve the euro zone crisis.
Raw sugar futures extended gains as the dollar slid to a 3-week low against the euro, and were underpinned by tight supplies of Brazilian raw sugar, although expectations of big northern hemisphere crops will limit gains.

Pakistan may import 400,000 T sugar next year
ISLAMABAD, Oct 12 (Reuters) - Pakistan may import up to 400,000 tonnes of refined sugar next year to bolster reserves despite expectations of a bumper crop, officials of the Ministry of Industries said on Wednesday.
The Economic Coordination Committee (ECC), the highest economic decision-making body, is expected to discuss the stock position and prospects for the next crop in a meeting on Thursday, the officials said.

India to decide 2011/12 sugar exports in Nov
NEW DELHI, Oct 12 (Reuters) - India will decide in early November how much sugar it could export in the new season that began this month, the food minister said on Wednesday, as the country weighs managing bulging stocks with fighting persistently high inflation.
Any Indian exports will put pressure on benchmark London white sugar futures  that have lost about 12 percent since January. Domestic prices, which have fallen about 4-5 percent this year on improved supplies, could rise.

Brazil 11/12 CS sugar output down 4 pct - Unica
SAO PAULO, Oct 11 (Reuters) - Sugar output from Brazil's center-south cane crop from the start of the season through the end of September was down 4 percent from a year earlier at 26 million tonnes, cane industry association Unica said on Tuesday.
But dry weather in the last two weeks of September allowed mills to boost production. Sugar output jumped 44 percent from the same period in 2010 when excess rains slowed harvest.

Good harvest profits not aplenty for India's farmers
MUMBAI, Oct 12 (Reuters) - Cotton farmer Ravindra Krishna Patil in India's Maharashtra state should be feeling flush after strong monsoon rains and a good crop, but high costs have cast a pall over his preparations for the festive season.
Instead of splashing out on gold jewellery, appliances or maybe even a car during the biggest shopping season of the year, 28-year-old Patil must count his rupees after costs of everything from fuel to labour soared while cotton prices have fallen by nearly half.

Firm price boosts Brazil cotton output, exports
BRASILIA, Oct 11 (Reuters) - Brazil will play a bigger role in the global cotton supply in the coming years with a dramatic surge in output and rising exports of the fiber to its top trade partner China, a sector official told Reuters.
The Latin American country's production of the fiber shot up to 1.96 million tonnes in 2011 from 1.2 million tonnes the year before, according to official data. Recent heavy capital investments signal these higher levels could be here to stay.

Euro Coal-Prices stable, China, S.Korea buy capes
LONDON, Oct 11 (Reuters) - Prompt physical coal prices were barely changed on Tuesday, with     volatility in other markets, due to worries over the health of Europe's economy, having no impact on coal prices.
Coal has largely been immune to the sharp movements seen in other markets although prices have drifted lower by around $15 a tonne during the past two months.

China buys Nov coal cape at $129/T CIF
LONDON, Oct 11 (Reuters) - A Chinese coal importer on Monday bought a November arrival capesize standard coal cargo at $129.00 a tonne CIF, the seller, a trader said on Tuesday.
Chinese buyers are quietly booking numerous and varied coal cargoes, low- to high-grade, at prices of $129-$131, suppliers said.

Oil Declines a Second Day on Outlook for Fuel Demand; Brent Spread Widens (Source: Bloomberg)
Oil dropped for a second day in New York as investors speculated that fuel consumption will falter on signs of a weakening global economy. Brent’s premium to U.S. prices widened. Futures slipped as much as 1.1 percent after American Petroleum Institute data showed U.S. implied gasoline demand fell the most in more than five years. Reports today may Chinese exports and imports slowed, while U.S. jobless claims rose. Brent oil in London was at the highest premium to New York crude in five weeks. “The economy is showing moderate, sub-trend growth,” said Ric Spooner, a chief market analyst at CMC Markets in Sydney. “There’s an expectation that the rate of Chinese export growth is declining, reflecting weaker demand internationally. The market will also be focusing closely on the import side of things to get a bearing on Chinese domestic demand.”

Zinc Bear Market Seen Ending as Chinese Steel Gobbles Up Glut: Commodities (Source: Bloomberg)
The 28 percent plunge in zinc that drove the metal into a bear market may be ending as record demand from steelmakers erodes stockpiles and the price slump spurs producers to curb output. About 50 percent of zinc is used to rust-proof steel and production of the alloy reached an all-time high of 31.7 million metric tons in the second quarter, according to Macquarie Group Ltd. Global stockpiles monitored by exchanges in London and Shanghai are the lowest since April. Prices may climb as much as 25 percent to $2,450 a ton next year, according to the median in a Bloomberg survey of 10 producers, analysts and traders.
Prices plunged 57 percent since reaching a record $4,580 in 2006 as increased production created a five-year glut. The surplus is narrowing as consumption expands to a record, and will shrink next year to its smallest since 2007, according to Morgan Stanley. China expanding at more than twice the speed of the global economy and using more steel than ever may mean shortages as early as 2014, the bank estimates.

China daily crude steel output at 1.93 mln T in late Sept - CISA data
SHANGHAI, Oct 12 (Reuters) - China's average daily crude steel output stood at 1.930 million tonnes in the last 10 days of September, up 0.6 percent from the preceding 10 days, data from the China Iron & Steel Association showed on Wednesday.
Average daily output of the medium- and large-sized steelmakers also rose 0.6 percent to 1.64 million tonnes during the same period.

Europe's steel appetite to slow next year
PARIS, Oct 11 (Reuters) - European steel consumption growth will slow down in 2012 due a decline in manufacturing, Gordon Moffat, director general of the European steel producers association Eurofer said on Tuesday.
"We anticipate a consumption levels to grow by 6 percent this year and by less next year, probably 2 or 2.5 percent because of the decline in manufacturing," Moffat told Reuters in an interview.

Rio Tinto CEO sees little change in China ore demand
SEOUL, Oct 11 (Reuters) - Rio Tinto's   chief executive said on Tuesday he did not foresee a significant change in China's demand for iron ore despite investor concerns about slowing steel demand in the country and weak developed economies.  
Index-based spot prices slid to more than six-month troughs on Monday, after dropping about 5 percent in September, spurred by signs of slowing Chinese steel demand and uncertainty about the fate of the global economy.

Iron Ore-Shanghai rebar hits contract low, ore extends losses
SINGAPORE, Oct 12 (Reuters) - Benchmark China steel futures fell to their lowest ever on Wednesday as weaker demand put further pressure on prices and will likely curb output in the world's top consumer and producer.
Baoshan Iron and Steel , China's biggest listed steelmaker, said it will keep prices of its main products unchanged next month after raising them in September and October, reflecting caution amid slower domestic appetite.

Baltic index at 10-month high, China coal sales eyed
LONDON, Oct 11 (Reuters) - The Baltic Exchange's main sea freight index, which tracks rates to ship dry commodities, rose to its highest in ten months on Tuesday helped by firm iron ore and coal cargo interest from China, with further near-term gains eyed.
Brokers said growing vessel supply, which was outpacing commodity demand, was set to cap dry bulk freight rate gains in the coming months with economic uncertainty adding to headwinds.

India shipping firms eye expansion in dire market
MUMBAI, Oct 11 (Reuters) - Indian shipping firms are planning to expand their fleet to take advantage of falling vessel prices and a sharp downturn in the global freight markets, industry executives said on Tuesday.
India's shipping firms view the difficult economic environment as a buying opportunity, as they expect to see a huge boom in seaborne trade in Asia's third largest economy over the next decade.