Wednesday, October 19, 2011

20111019 1815 FCPO EOD Daily Chart Study.

FCPO closed : 2892, changed : +57 points, volume : lower.
Bollinger band reading : side way range bound downside biased.
MACD Histrogram : resumed rising, buyer taking chances.
Support : 2850, 2800, 2770, 2750 level.
Resistance : 2900, 2920, 2950, 2970 level.
Comment :
FCPO closed recorded substantial gains with decreasing volume changed hand while overnight soy oil closed recorded small loss and currently trading higher while crude oil price also rising higher.
FCPO price traded higher on speculation of better export data tomorrow with some short covering activities.
Daily chart formed an up bar candle with little lower shadow positioned above middle Bollinger band after market opened higher and traded within 23 points range bound movement followed by last hour upward climb to closed near the high of the day.
Technical study remained 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.

20111019 1738 FKLI EOD Daily Chart Study.

FKLI closed : 1446.5, changed : +16.5 points, volume : lower.
Bollinger band reading : pullback correction little upside biased.
MACD Histrogram : turned lower, buyer lock in profit and reduce exposure.
Support : 1445, 1440, 1425, 1420 level.
Resistance : 1458, 1470, 1485, 1500 level.
Comment :
FKLI closed recorded substantial gains with quiet volume exchanged  recovered big chuck of yesterday huge losses doing 3.5 points discount compare to cash market that also closed higher. Overnight U.S. markets closed recorded gains and today Asia markets traded mixed while European markets opened and currently trading higher.
Overnight U.S. markets closed higher after Bank of America and Intel reported better than expectation quarterly earnings. Asia markets ended mixed after news on Moody's cut Spain credit rating for the third time since 2010. European markets opened and trading higher on European debt rescue fund expansion report.
Daily chart formed a small up doji bar candle closed nearer to upper Bollinger band after market opened higher, traded within 9 points range bound market through out the day.
FKLI is still doing pullback correction within a little upside biased market development testing support and resistance level.
When to buy : buy at support or weakness with quick cut loss and profit target.
When to sell : sell at resistance or strength with quick cut loss and profit target.

20111019 1706 Regional Markets EOD Daily Chart Study.

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

20111019 1625 Global Market & Commodities Related News.

Asian stocks rise, but Moody's Spain cut weighs
TOKYO, Oct 19 (Reuters) - Asian shares rose, but gains were capped by a cut to Spain's sovereign credit rating from Moody's Investors Service that kept investors' risk appetite in check.
"It's a familiar pattern these days, to sell stocks whenever there's bad news from Europe and buy them back whenever there's good news, but investors are getting tired of it," said Kenichi Hirano, operating officer at Tachibana Securities, adding that this was one reason for recent thin trade.

Asian Stocks Advance After U.S. Earnings Boost Economic Recovery Outlook (Bloomberg)
Asian stocks rose on signs a global economic recovery may be strengthening after Bank of America Corp. swung to a profit and Intel Corp. forecast sales that beat analyst estimates, boosting the earnings outlook for Asia’s companies. Mitsubishi UFJ Financial Group Inc. (8306), Japan’s largest lender, advanced 0.9 percent, after Bank of America climbed 10 percent in New York. Cnooc Ltd. (883), China’s largest offshore energy explorer, rose 1.2 percent after crude rose to the highest price in more than a month. Suppliers of Apple Inc. (AAPL), fell after the maker of iPhones and iPads posted profit that missed analyst estimates. “There’s bound to be some residual optimism because of the strong gains in the U.S. on the back of some earnings optimism,” said Will Seddon, who helps oversee more than $300 million at White Funds Management in Sydney. “We’re bound to see some positive momentum in Asian markets, but the risks with the European situation are still very, very high.”

Spain Rating Cut for Third Time Since 2010 (Bloomberg)
Spain’s credit rating was cut for the third time in 13 months by Moody’s Investors Service as Europe’s debt crisis threatens to engulf the nation. Moody’s yesterday reduced its ranking to its fifth-highest investment grade, cutting it by two levels to A1 from Aa2, with the outlook remaining negative. Standard & Poor’s downgraded Spain on Oct. 14 to its fourth-highest investment grade, and Fitch Ratings cut it to the same level on Oct. 7, the day it also downgraded Italy. “Moody’s is maintaining a negative outlook on Spain’s rating to reflect the downside risks from a potential further escalation of the euro-area crisis,” it said in a statement. The company cited the “continued vulnerability of Spain to market stress” that is driving up the cost of borrowing, as well as weaker growth prospects. Spanish bonds fell.

‘Time Is Running Out’ in Battle With Debt: King (Bloomberg)
Bank of England Governor Mervyn King said the global recovery is faltering and “time is running out” for authorities to reduce imbalances and strengthen banks. “In 2008-09, it was easy to coordinate international action in the Group of 20 economies,” King said in a speech late yesterday in Liverpool, England. “In the face of a collapse in world trade even faster than that in the 1930s, countries needed no persuasion of the necessity of policy stimulus. But it has proved much harder to form a consensus on how to tackle the underlying problems.” King said monetary policy is limited in its capacity to revive the U.K.’s “reluctant recovery” as governments delay dealing with underlying imbalances between countries with current account surpluses and deficits. As European leaders prepare for a summit on the Greek crisis on Oct. 23 before G-20 leaders meet on Nov. 3, King said the global economy needs a “bold response.”

Thailand Maintains Interest Rate for First Time in 2011 After Flood Damage (Bloomberg)
Thailand kept interest rates unchanged for the first time this year, ending its longest series of increases since 2006, as the nation’s worst floods in five decades and a weakening global economy crimped growth. The Bank of Thailand kept its benchmark one-day bond repurchase rate at 3.5 percent, it said in Bangkok today, a decision predicted by 16 of 17 economists surveyed by Bloomberg News. One analyst expected a rate cut. The central bank had boosted borrowing costs nine times since the start of July 2010, more than any other major Asian economy after India. The floods may shave as much as 1.7 percentage points off economic growth this year after destroying crops, damaging 1,000 factories and disrupting operations at Toyota Motor Corp. and Nikon Corp. Inflation eased last month, giving the central bank room to pause as Prime Minister Yingluck Shinawatra seeks to shore up growth after Thailand’s worst natural disaster.

Papandreou Presses Austerity Amid Strikes (Bloomberg)
Greek Prime Minister George Papandreou vowed to push through a further round of austerity measures in the face of public anger, appealing to European leaders to help cut Greece’s debt burden at a weekend summit. Opening a parliament debate in Athens on the government’s planned tax increases and cuts to pensions and wages, Papandreou said that a 48-hour walkout by workers in schools, hospitals and on public transport that began today “will not help Greece,” contrasting the strikers with his government’s efforts to help the country back to economic growth. “Greece is being held hostage by strikes and protests,” Papandreou told lawmakers late yesterday. “This government has been fighting for two years to save the country and still has much work ahead,” he said. “We will give battle and we will win.”

European Stocks Gain on Rescue-Fund Reports (Bloomberg)
European stocks rose for the first time in three days amid conflicting reports that France and Germany have reached a deal on expanding the region’s rescue fund. Asia shares climbed while U.S. index futures fell. Software AG (SOW), Accor SA (AC) and British Sky Broadcasting Group Plc (BSY) advanced after the reporting results. The benchmark Stoxx Europe 600 Index gained 0.4 percent to 236.36 at 8:05 a.m. in London after falling 1.3 percent in the previous two days. The MSCI Asia Pacific Index advanced 0.8 percent, while Standard & Poor’s 500 Index futures fell 0.5 percent after Apple Inc.’s profit missed analyst estimates. “Rumours of a European bailout deal sparked a global surge in risk-on bets,” Jonathan Sudaria, a trader at London Capital Group, wrote in e-mailed comments. “With markets jumping from headline to headline, traders are finding it increasingly difficult to stay with positions, reducing their investment horizon to the next major rumour.”

European commodities markets eye new regulations
LONDON, Oct 18 (Reuters) - The European Union is due to release draft market reform legislation on Thursday that could have significant impact on commodity markets.  
The EU's executive is due to propose "MiFID II" to extend regulation to commodities and bond trading, push derivatives onto trading platforms and make competition possible in clearing.

U.S. wheat ticks up on tight stocks, weather worries
SYDNEY, Oct 19 (Reuters) - U.S. wheat futures for December delivery on the Chicago Board of Trade  rose 0.7 percent to $6.29-1/2 a bushel in early Asian trade.
Wheat turned a touch firmer overnight on gains in top quality spring wheat traded on the Minneapolis Grain Exchange due to tight stocks of that wheat class and on dry weather worries in the U.S. Plains hard red winter wheat region.

Malaysia's Q3 cocoa grindings down 2.8 pct y/y
SINGAPORE, Oct 19 (Reuters) - Cocoa grindings in Malaysia, Asia's largest grinder, slipped 2.8 percent to 71,451 tonnes in the third quarter of 2011 from the same period last year, the Malaysian Cocoa Board (MCB) said.
Cocoa grindings were down 0.9 percent from the second quarter, dropping for a second consecutive quarter, the MCB said in a statement. It gave no further details.

El Salvador coffee harvest has minimal rain damage
SAN SALVADOR, Oct 18 (Reuters) - Heavy rains will cause only minimal damage to El Salvador's next coffee harvest, coffee foundation Procafe said on Tuesday.
Two weeks of rainstorms have killed more than 80 people in Central America and felled coffee trees, ruined roads and threatened to spread fungus on plants.

Canada to downsize Wheat Board, end grain monopoly
WINNIPEG, Manitoba, Oct 18 (Reuters) - The Canadian government put forward long-promised legislation on Tuesday to dismantle Western Canada's grain-marketing monopoly, and gave the Canadian Wheat Board (CWB) five years to implement a business plan to
survive in an open market.
In draft legislation presented to Parliament, the Conservative government offered the CWB certain financial guarantees, but said it would not provide seed capital or regulated access to grain handlers after the board loses its grain marketing monopoly.

Gasoline lifts US producer prices, seen temporary
WASHINGTON, Oct 18 (Reuters) - U.S. wholesale prices rose at their fastest pace in five months in September as the cost of gasoline surged, but a small gain in core prices suggested the price pressure was unlikely to be sustained.
While the jump in gasoline prices was seen as a blip, details of the report on Tuesday pointed to enough inflation pressure to keep the bar high for any further loosening of monetary policy by the Federal Reserve.

Brent dips below $111, Spain downgrade weighs
SINGAPORE, Oct 19 (Reuters) - Brent crude dropped below $111 as concerns over demand growth weighed after Moody's Investors
Service cut Spain's sovereign ratings by two notches, adding to uncertainty over the euro zone's debt crisis and economic
growth. "Participants lack clear confidence in the market and that will result in prices trading in a very narrow range till the outcome of the European Union meeting is known," said Ken Hasegawa, a commodities derivatives manager with Newedge Brokerage in Tokyo. "The U.S. benchmark will inch closer to $90 this week, and that is a very important point technically."

Iron ore pricing revolution (V2.0): Andy Home
--Andy Home is a Reuters columnist. The opinions expressed are his own--
LONDON, Oct 18 (Reuters) - The current slide in the spot iron ore price is set to trigger another step-change in how the steel industry prices its key metallic input.
The widening gap between the spot price, now at 11-month lows, and the price charged by miners for Q4 deliveries has laid bare the problems with the quarterly price mechanism that replaced the annual benchmark system over the course of 2009 and 2010.

India iron ore exports in Aug fall 43.4 pct - trade body
Oct 18 (Reuters) - Iron ore exports in August from India, the world's third biggest exporter, fell 43.4 percent on year to 2.65 million tonnes, data from a trade body showed, as monsoon dented shipments and there were no exports from a key state even after lifting of a ban.
Exports in the first five months of the fiscal year to August fell 24.38 percent to 28.02 million tonnes, the Federation of Indian Mineral Industries (FIMI) said in a statement.

China Sept steel output lowest since Feb - stats bureau
BEIJING, Oct 18 (Reuters) - Chinese crude steel production in September fell to its lowest point in seven months, shrinking 3.5 percent from August to 56.7 million tonnes, figures from the country's statistics bureau showed on Tuesday.
On a daily basis, the decline was less dramatic, with production at 1.89 million tonnes compared with 1.895 million tonnes in the previous month, according to Reuters calculations.

Copper up on report of euro zone rescue fund
SHANGHAI, Oct 19 (Reuters) - Copper edged up after a report that Europe will strengthen the region's rescue fund boosted investor confidence, while strikes at two Freeport-McMoran Copper & Gold mines also supported prices.
Three-month copper on the London Metal Exchange edged up 0.01 percent to $7,450 a tonne by 0119 GMT, after dropping 0.6 percent in the previous session.

China copper output falls 7.5 pct in Sept, nickel at record
HONG KONG, Oct 18 (Reuters) - China's refined copper output fell 7.5 percent in September from August after three straight months of record output as some smelters briefly shut for regular maintenance, but should pick up again this month.
Production of nickel rose 0.6 percent on the month to hit a record for the fifth straight month.

European, Chinese copper demand firm -Aurubis
HAMBURG, Oct 18 (Reuters) - Chinese and European copper demand remains firm which should help support global prices, Aurubis , Europe's biggest copper producer, said on Tuesday.
"There is little to indicate a sharp drop in demand just now," Aurubis said in a report. "In view of the continuing inadequate level of copper production, the copper price should therefore be fundamentally well buttressed against any decrease."

Gold steady, awaits cues on Europe plan
SINGAPORE, Oct 19 (Reuters) - Gold prices held steady, shrugging off the downgrade of Spain's sovereign credit rating, as investors wait for clarity on Europe's plans to tackle the debt crisis at this weekend's European Union summit.
"Gold has nowhere to go unless there is clarity on what Europe wants to do," said Ronald Leung, a physical dealer at Lee Cheong Gold Dealers in Hong Kong.

METALS-Copper up on report of euro zone rescue fund
SHANGHAI, Oct 19 (Reuters) - Copper edged up after a report that Europe will strengthen the region's rescue fund boosted investor confidence, while strikes at two Freeport-McMoran Copper & Gold  mines also supported prices.
Gains may, however, be capped by concern that the euro-zone debt crisis may drag on after Moody's Investors Service cut Spain's sovereign ratings.

PRECIOUS-Gold steady after Moody's downgrades Spain
SINGAPORE, Oct 19 (Reuters) - Gold prices held steady, after Moody's cut Spain's credit ratings, adding to uncertainties over whether European leaders would come up with a solution to the bloc's debt crisis at a meeting this weekend.
Spot gold  was little changed at $1,657.89 an ounce by 0031 GMT, after falling 0.9 percent in the previous session.

FOREX-Euro inches down after Moody's cuts Spain
TOKYO, Oct 19 (Reuters) - The euro inched lower after Moody's cut Spain's government debt rating by two notches, giving up some gains made on a report that France and Germany have reached a deal to bolster the euro zone's bailout fund.  
It was last down 0.1 percent at $1.3737 , coming off an overnight high of $1.3818 hit after the Guardian said leaders of euro zone's two largest economies agreed to boost the European Financial Stabilisation Facility to two trillion euros.

Indonesia mine strike seen hurting Freeport profit
Oct 18 (Reuters) - Freeport-McMoRan Copper & Gold's  threat to close its Grasberg mine in Indonesia would hurt the company's bottom line and could further tighten global copper supplies and drive up the metal's price.
"Any shutdown will have a serious impact on the prices and market psychology," Terry Ortslan, a mining analyst with TSO & Associates in Montreal, said on Tuesday.

20111019 1130 Global Market & Commodities Related News.

GLOBAL MARKETS-Stocks, euro end up on European deal optimism
NEW YORK, Oct 18 (Reuters) - World stocks and the euro edged higher, while the S&P 500 jumped 2 percent on Tuesday following another report on deals to bolster the euro zone's rescue fund.
Brent crude oil prices also rebounded to end higher after touching a one-week low.

Asian Stocks Advance as U.S. Earning Boost Recovery Outlook (Bloomberg)
Asian stocks rose on signs a global economic recovery may be strengthening after Bank of America Corp. swung to a profit and Intel Corp. forecast sales that beat analyst estimates, boosting the earnings outlook for Asia’s companies. Toyota Motor Corp. (7203), the world’s biggest carmaker, rose 0.7 percent. Mitsubishi UFJ Financial Group Inc. (8306), Japan’s largest lender, advanced 1.2 percent, after Bank of America climbed 10 percent in New York. Cnooc Ltd. (883), China’s largest offshore energy explorer, rose 1.8 percent after crude rose to the highest price in more than a month. Suppliers of Apple Inc. (AAPL), fell after the maker of iPhones and iPads posted profit that missed analyst estimates.
“There’s bound to be some residual optimism because of the strong gains in the U.S. on the back of some earnings optimism,” said Will Seddon, who helps oversee more than $300 million at White Funds Management in Sydney. “We’re bound to see some positive momentum in Asian markets, but the risks with the European situation are still very, very high.”

Spain’s Rating Cut to A1 by Moody’s (Bloomberg)
Spain’s credit rating was cut for the third time since June of last year by Moody’s Investors Service as Europe’s debt crisis threatens to engulf the nation. Moody’s yesterday reduced its ranking to its fifth-highest investment grade, cutting it by two levels to A1 from Aa2, with the outlook remaining negative. Standard & Poor’s downgraded Spain on Oct. 14 to its fourth-highest investment grade, and Fitch Ratings cut it to the same level on Oct. 7, the day it also downgraded Italy. Moody’s, in a statement, cited the “continued vulnerability of Spain to market stress” that is driving up the cost of borrowing, as well as weaker growth prospects. “Moody’s is maintaining a negative outlook on Spain’s rating to reflect the downside risks from a potential further escalation of the euro area crisis.” The euro slipped 0.1 percent to $1.3738 at 7 a.m. Tokyo time.

COMMODITIES-Copper, crops fall on China woes; oil jumps
NEW YORK, Oct 18 (Reuters) - Most metals and agricultural commodities fell on Tuesday after major consuming nation China reported slowing economic growth, but oil jumped as much as 2 percent, limiting losses across commodities.
"Their dependence upon U.S. and European purchasing is enormous. If the West shuts down, China shuts down," said Philip Gotthelf, president at Equidex Brokerage Group Inc in Closter, New Jersey.

Oil rises as Wall St buying trumps China concern
NEW YORK, Oct 18 (Reuters) - Brent oil rose on Tuesday, turning higher after hitting a one-week low, as strong bank earnings lifted markets and outweighed pressure from weak Chinese economic data.
"I think this could be an unwind of one of those spreads," he said, adding further support for U.S. crude may be coming from lower inventory levels at the Cushing, Oklahoma delivery point for the U.S. contract.

Argentina to hike biodiesel output by 2015-executive
AVELLANEDA, Argentina, Oct 18 (Reuters) - Argentine biod

Asian gas oil will rely on Europe for support this winter
SINGAPORE, Oct 18 (Reuters) - Asia's gas oil market will look to Europe for support this winter as demand from top buyers India and Indonesia ebbs, weighing on prices during what is normally the product's most profitable months because of its use for heating.
Surging diesel prices in Europe, due to low stocks ahead of winter, are already making it profitable for traders to ship barrels to the West. That may help gas oil cracks, or the profit from processing a barrel of crude into the fuel, recover from a 10-month low below $15 hit last week.  

Natural gas ends down for second day, storage weighs
NEW YORK, Oct 18 (Reuters) - U.S. natural gas futures ended lower on Tuesday for a second day, with moderating weather forecasts and expectations for another triple-digit inventory build on Thursday pressuring the complex.
"It looks like the weather warmed up a bit, and people are concerned about the next storage report," a New York trader said, noting expectations Thursday's government inventory report will show the season's third triple-digit build.

Euro Coal-Prices fall further, outlook seen soft
LONDON, Oct 18 (Reuters) - Prompt physical coal prices fell on Tuesday by $1 to $2 a tonne as slow business and a weaker outlook hurt sentiment.
"Liquidity has taken a hit today," one European trader said. "There's still overwhelming supply in South Africa's Richards Bay and not enough buyers in the market to keep things up at the moment."

Gold Advances as Spain Rating Cut by Moody’s Spurs Demand for Haven Assets (Bloomberg)
Gold gained for the first time in three days after Moody’s Investors Service cut Spain’s credit rating, spurring demand for the metal as a haven. Bullion for immediate delivery added 0.4 percent to $1,664.20 an ounce at 9:25 a.m. in Singapore, after dropping 0.4 percent to $1,651.73. December-delivery gold climbed for the first time in three days, gaining as much as 0.9 percent to $1,666.90 an ounce on the Comex in New York. “The fundamentals that support gold’s status as a safe haven have not changed,” Julian Jessop, chief global economist at Capital Economics Ltd., wrote in a report. “Gold’s value does not depend on the creditworthiness of any government or financial institution. We continue to expect the price of gold to top $2,000 as sovereign-debt worries continue to build.”

20111019 1115 Malaysia Corporate Related News.

Proton: Looks to commercialise electric vehicles by 2013. Proton Holdings Bhd is looking to commercialise its electric vehicles in 2013. The Proton Saga EV is expected to be priced at RM70,000 and Proton Exora Range Extender at about RM100,000. Proton and government are also working on a mechanism to build the infrastructure for electric vehicle charging centres. (Source: The Edge Financial Daily)

Top Glove Corp expects the current oversupply of rubber gloves to be  absorbed over the next 1-3 years and is pushing ahead with is expansion plans.  Chairman Tan Sri Lim Wee Chai said, “There is a 10-20% oversupply right now.  This is due to the high demand over the past 1-2 years. But this is a long-term  business and we will continue to invest as demand for gloves is still growing at  8-10% every year.” Lim also said Top Glove hoped to grow its sales by 20% in its  current financial year ending 31 Aug 2012. He said net profit margin should  come in between 8-10%. (Star Biz)

UEM Group and the EPF, which made a takeover offer  for PLUS  Expressways, are believed to be in the final stages of discussions with the  authorities on the terms of the new supplemental concession agreements (CAs).  RAM Rating Services said that based on the current progress of the  supplemental CAs, which are the key milestones for the entire exercise, the  corporate restructuring is expected to be completed within the next few months.  Upon the completion of the restructuring exercise, the Islamic debt notes of  RM4bn Sukuk will be redeemed before its maturity and subsequently cancelled.  (Financial daily)

Privately held  Najcom and its joint venture partner  UEM Group are  understood to have bagged the contract to build the women and children’s  hospital in Kuala Lumpur costing between RM700m and RM900m. It was  earlier speculated that IJM Corp was the frontrunner to bag this job.  Najcom is 52.5% controlled by Zainabbi Abubacker and 47.5% by Datuk  Haja Najmudeen Kader. The company is not known as a top-tier contractor but it has done quite a few restoration jobs in Penang.  (Financial Daily) Boustead Holdings has lowered the divestment price and restricted offer for  sale price of Pharmaniaga shares to RM5.46 per share from RM5.75 a share to  make the price more attractive to potential buyers.  The sale will raise a total of  RM162.62m that would be used to repay Boustead’s group borrowings.  (Malaysian Reserve)

The EPF has increased its stake in DRB-HICOM to 9.71%, its latest filing on  Bursa Malaysia showed. Early this year, EPF only had 7.16% stake in the  conglomerate. (BT)

The case filed against Malaysian tycoon and Maxis owner T. Ananda Krishnan by India's Central Bureau of Investigation (CBI) has no impact on Malaysia's  telecommunications industry, says Deputy Information, Communications and  Culture Minister Datuk Joseph Salang. He said the Malaysian authorities would  not conduct any investigation on the tycoon. “At the moment it's only an  investigation (by India's CBI). There will be no investigation on the Malaysian  side as we have been very transparent in how we manage our  telecommunications industry,” he said. (Starbiz)

Malaysian Airline (MAS) has embarked on a network rationalisation  programme in which its subsidiary,  Firefly will concentrate on serving  short-haul turboprop operations and MAS to focus on its premium full-service  offering.  The takeover of Firefly’s jet services by MAS is part of the service  separation plans under the business realignment exercise which  addresses the continuing heavy losses being incurred by Firefly’s jet  operations.  The programme will be undertaken over a two-month period on a  sector-by-sector basis, and will result in all Firefly jet aircraft being  redeployed into MAS’s operations by Dec 4, 2011. MAS group will  continue to operate all services to Kota Kinabalu and Kuching.  (Bernama)

Proton is looking to commercialise its electric vehicles in 2013, according to  director Datuk Zainuddin Che Din. He said the vehicles which are now in the  test fleet stage will be brought to the commercial front to cater to an increasing  demand for full electric cars in Malaysia. Zainiuddin said the cars will be  competitively priced with value for money once commercialised. The Proton  Saga EV is expected to be priced at RM70,000 and the Proton Exora Range  Extender at about RM100,000. (Bernama, Financial Daily)

Time is running out for MBF Holdings to comply with Bursa Malaysia's public  shareholding spread, even as its major shareholder, Tan Sri Ninian Mogan  Lourdenadin, is busy snapping up shares in the open market, fuelling  speculation that he will make a second attempt in as many years to take the  company private.  In July, the stock market regulator rejected an MBF application for  more time to comply with the shareholding spread. MBF had asked for  until year end to meet the requirement.  The minimum public spread in a listed entity is 25%. As it stands,  MBF's public spread is only about 14%. (BT) Dialog has set up Dialog Services (Vietnam) to provide technical services in  the upstream and downstream oil and gas sector there. The new unit’s office will  be in Ho Chi Minh City and it will have a registered capital of US$100,000.  (Malaysian Reserve)

Scomi Group has appointed TIME dotcom as the sole network provider to  meet its global connectivity needs across five countries. The partnership  includes the design, implementation and full management by TIME of Scomi’s  private data network connecting Scomi’s offices in India, Indonesia, UAE, UK  and Malaysia. (Bernama)

The re-listing of Parkway Pantai Ltd could either take place on Bursa  Malaysia or SGX  and will depend on market conditions. However, the  priority was to streamline both the Malaysian and Singapore operations first  before listing the group, according to Chairman Datuk Mohammed Azlan  Hashim. Singapore and Malaysia remain the two most important markets.  Singapore is a regional medical hub while Malaysia has a growing affluent  population that demands more private healthcare. Parkway is opening the  333-bed multi-billion Parkway Novena Hospital in Singapore in the second half  of 2012, while in Malaysia it is spending RM720m on a 100-bed Parkway  hospital in Manjung, Perak, a 200-bed Gleneagles medical centre in Kota  Kinabalu and a 300-bed Gleneagles Medini hospital in Iskandar  - all to be  completed by 2013. (Starbiz)

Some 29m  UEM Land shares worth RM56.55m were traded off-market according to data from Bloomberg. The shares were done in a deal of two blocks  with the 0.6% stake sale priced at RM1.95 a share. (Malaysian Reserve)

KUB Malaysia appointed Datuk Wan Mohd Nor Wan Ahmad as its acting  CEO and Dr Wan Ahmad Rudiman Wan Razak as acting COO, with effect  from  early this week. It also announced the resignation of its MD Datuk Mohd Nazar  Samad. (BT)

MHB secures ExxonMobil’s Telok project
Malaysian Marine and Heavy Engineering Holdings (MHB), through its wholly-owned subsidiary Malaysia Marine and Heavy Engineering SB (MMHE), has been awarded a contract for the Telok gas development project by ExxonMobil Exploration and Production Malaysia Inc, an MHB announcement on Bursa Malaysia said yesterday. The statement, which did not state the value of the contract, said the scope of work would include procurement, fabrication, on-shore testing, load-out and offshore hook-up and commissioning of two topsides and corresponding two jackets to support the platform. The Telok A and Telok B are gas satellite platforms with an estimated topside weight of 1,750 tonnes and 1,650 tonnes respectively. (Financial Daily)

Fajarbaru, Aztabina win RM166m job
Fajarbaru Builder Group subsidiary, Fajarbaru Builder SB, and its partner Aztabina SB have accepted a RM166.4m contract for construction and maintenance the first phase of a medical suite and amenities in Jalan Ampang, Kuala Lumpur. (StarBiz)

Engtek sees significant 4Q loss from Thai floods
Hard disk drive component maker Eng Teknologi Holdings (Engtek) expects significant losses for 4QFY11 ending 31 Dec due to the floods in Thailand. In a filling with Bursa Malaysia yesterday, the group said both its factories in Ayutthaya are inundated by water. Its Thai operations account for half the group’s production capacity. (Financial Daily)

SDB buys property in Singapore
Selangor Dredging Bhd (SDB) says Champsworth Development Pte Ltd (Champsworth), has served on the sale committee, a Call Option Notice to sell a property in Singapore.  The property is known as The Village, situated at Pasir Panjang Road, Singapore. The total purchase consideration for the property is RM223.75m and was agreed upon on a willing buyer and willing seller basis. (Business Times)

Progressive Impact buys Shah Alam property for RM40m
Progressive Impact Corp Bhd is buying a piece of industrial land in Shah Alam for RM40m in a move to expand its operations. It was acquiring the property Bangunan BKA, measuring 5,951 sq meters together with the buildings, from Simple Hope Sdn Bhd. The building is about 13 years old. The total built-up of the property is 237,828 sq ft and the net lettable area is about 150,114 sq ft. (The Edge)

20111019 1112 Local & Global Economic Related News.

The  National Agro Food Policy will be launched by PM Datuk Seri Najib  Tun Razak soon, covering a period from 2011 to 2020 and focusing on ensuring  the agriculture sector continues to drive the economy through exports.  Agriculture and Agro-based Industry Deputy Minister Datuk Chua Tee Yong  said the cabinet had approved the policy which outlined four strategies to  ensure adequate supply of food and to boost the value added of food products.  (Bernama)

Retail sector for 2011 is expected to grow 6%, similar to last year's, due to  concerns of high oil prices, declining purchasing power and high cost of doing  business. A 6% growth this year means RM81.59bn worth of retail sales, said  Malaysia Retailers Association (MRA). "For 2Q11, we lower our estimate to  7% instead of the 12.6% given by retailers (+5.1% in 1Q11). For 3Q11, growth rate  is estimated at 7% due to the Hari Raya celebrations while for the last quarter,  retail industry is expected to expand by 5%,” it said. (BT)

There are no plans to use gold instead of the ringgit as a medium of payment,  Deputy Finance Minister Datuk Donald Lim Siang Chai said. Any  proposal to use gold as an alternative to cash required more study, he said.  “We must ensure an efficient monetary policy that is accepted  internationally,” he noted.  The use of gold during transactions would not guarantee that the  commodity will not depreciate. It could also invite problems related to  authenticity and counterfeiting, he added. (The Star)

Singapore's cumulative committed investments into Iskandar Malaysia have totalled RM4.13bn (S$1.7bn) as at the end of Jun this year since 2006. Out  of this figure, RM3.67bn of Singapore's investments were in the manufacturing  sector in Iskandar Malaysia while the remaining RM463m went into the  Johor-based economic zone's services sector.  This committed capital inflow from Singapore formed 5.44% of  Iskandar Malaysia's total cumulative investment of RM75.96bn in the  corresponding period, up from 4.63% until the end of 2010, said Ismail  Ibrahim, chief executive of Iskandar Regional Development Authority  (IRDA). The latest figures available for total committed cumulative investments  into Iskandar Malaysia as at the end of Sep this year was as much as  RM77.82bn. (BT)

The  US producer price index climbed 0.8% mom in Sep, the most in five  months, after no change in Aug, Labor Department figures showed. Economists  projected a 0.2% gain. The so-called core measure, which excludes volatile food  and energy, gained 0.2%, also more than predicted. (Bloomberg)

US: Overseas demand for assets climbed amid S&P downgrade
Global demand for US stocks, bonds and other financial assets in August was greater than forecast as financial-market turmoil following the downgrade of US debt by Standard & Poor’s boosted demand for Treasuries. Net buying of long-term equities, notes and bonds totaled USD57.9 bn, the highest since December 2010, compared with net buying of USD9.1bn in July, the Treasury Department said. Including short-term securities such as stock swaps, foreigners bought a net USD89.6bn, compared with net sales of USD52.4bn the previous month. (Bloomberg)

US: Homebuilder sentiment in US increases more than forecast
Homebuilders in the US were less pessimistic than forecast in October as near record-low borrowing costs and price decreases raised hopes the market will turn for the better over the next six months. The National Association of Home Builders/Wells Fargo sentiment index climbed to 18, the highest level since May 2010, from 14 in the prior month, data from the Washington-based group showed today. Economists surveyed by Bloomberg News projected the measure would rise to 15, according to the median forecast. Readings below 50 mean more respondents said conditions were poor. The Federal Reserve’s unconventional measures to boost demand and spur job growth combined with concern over the European debt crises have helped reduce mortgage rates, making buying more affordable.. (Bloomberg)

US: Wholesale prices increase 0.8%, more than forecast
Wholesale prices in the US rose more than forecast in September, boosted by gasoline, food and trucks, indicating inflationary pressures continue to bubble up the production line. The producer price index climbed 0.8%, the most in five months, after no change in August, Labor Department figures showed. Economists projected a 0.2% gain, according to the median of 71 estimates in a Bloomberg News survey. The so-called core measure, which excludes volatile food and energy, gained 0.2%, also more than predicted. Slower growth from China and Europe to the US means demand for raw materials will probably moderate, helping limit further gains in prices. (Bloomberg)

US: Industrial production increases on cars, computers
Industrial production in the US advanced in September on growing demand for automobiles and computers after stalling the prior month, a sign manufacturers are contributing to growth. Output at factories, mines and utilities increased 0.2%, in line with the median estimate in a Bloomberg News survey, after being little changed in August, figures from the Federal Reserve showed. Factory production, which makes up 75% of the total, climbed for a third month. Companies like General Motors Co. and Alcoa Inc. are getting a lift as Japan recovers from the earthquake and tsunami, and as demand from emerging markets and business investment boosts orders. At the same time, shipments to Europe may cool as the region’s debt crisis lingers, indicating factory assembly lines will probably not be running at full tilt. (Bloomberg)

Foreigners were net buyers of long-term US securities in Aug according to the  monthly Treasury International Capital report, known as TIC.  Net long-term securities transactions showed total buying of  US$57.9bn in long-term US securities in Aug, after purchases of  US$9.1bn the month before. (WSJ) Monthly net TIC inflow was US$89.6bn in Aug, compared with an  outflow of US$52.4bn in Jul. (WSJ)

The US NAHB/Wells Fargo Housing Market index rose to 18 in Oct (14 in  Sep), the group said. It was the highest level since May 10. Economists predicted  the index would rise to 15. (Reuters)

German: Investor confidence fell to three-year low in October
German investor confidence fell to the lowest in almost three years in October as Europe’s debt crisis threatened to infect banks and curb economic growth. The ZEW Center for European Economic Research in Mannheim said its index of investor and analyst expectations, which aims to predict developments six months in advance, declined to minus 48.3 from minus 43.3 in September. That’s the lowest since November 2008. Economists expected a drop to minus 45, according to the median of 39 estimates in a Bloomberg News survey. (Bloomberg)

Japan’s department store sales fell 2.4% in Sep (-1.7% in Aug), hit by two  major typhoons on weekends, posting the third straight yoy drop, data released  by the Japan Department Stores Association showed. (MNI)

Japanese Machine Tool Orders grew 20.1% in Sep, in comparison with  20.3% in Aug, according to data released by the Japanese Machine Tool  Builders Association. It is the lowest result since Oct 09 when it stood  at -21%.  (NASDAQ)

Japan is preparing to ease  restrictions on US beef imports as concerns  about mad cow disease receded and domestic cattle production fell after the  nation’s worst nuclear disaster since World War II. Japan was the biggest buyer  of American beef before an outbreak in 2003. (Bloomberg)

China’s industrial production increased 13.8% yoy in Sep (+13.5% in Aug).  Economists were expecting a 13.4% yoy increase. (Bloomberg)

In  China,  fixed-asset investment excluding rural households climbed  24.9% yoy in 9M11, (+25% in 8M11), of which property investment for 9M11  rose 32% yoy, from 33.2% in 8M11. The consensus estimate by economists  called for a 24.8% increase in the headline figure. (Bloomberg)

Retail sales in  China expanded 17.7% yoy in Sep after a 17% gain in Aug.  Economists were expecting an expansion of 17.1% yoy. (Bloomberg)

China’s  home prices gained in 24 of the 70 cities monitored by the  government in Sep, compared with 23 cities in Aug. A total of 17 cities posted mom declines in  housing values, and were unchanged in 29 cities. Average  housing prices across the nation were up just 0.01% mom in Sep.  Property  sales rose 23% yoy to Rmb3.9tr (US$611bn) in 9M11.  New property  construction climbed 24% to 1.48bn square meters (16bn square  feet)  between Jan and Sep. (Bloomberg)

China’s state-owned companies’ profit rose 19.4% yoy in 9M11 to  Rmb1.71tr. Revenue gained 24.3% yoy while net income for state-owned  companies. (Bloomberg)

China: Economy grows least in 2 years as Europe demand cools
China’s economy grew 9.1% in the third quarter from a year earlier, the slowest pace since 2009, driving stocks lower on concern that Europe’s debt crisis is dragging on the global recovery. The gain was less than the median estimate of 9.3% in a Bloomberg News survey of 22 economists and followed a 9.5% increase in the previous three months. Asia’s benchmark stock index sank after China’s growth was limited by tighter credit and weaker demand from Europe, where Germany yesterday rejected speculation that any immediate resolution of the region’s crisis is possible. A slowdown in the pace of China’s expansion, which remains five times that of the US, may help Premier Wen Jiabao to tame inflation that is above the government’s target. (Bloomberg)

A government source said the NESDB reported that the agency has cut  Thailand’s economic growth  projection for 2011 to 2.1% from an earlier  prediction of 3.8%. NESDB secretary-general Arkhom Termpittayapaisith said  the floods have affected 252,716 workers in all sectors and would cause four  industrial estates and  one industrial zone in Ayutthaya to lose revenue of  THB350bn. (Bangkok Post)

Thailand’s Cabinet approved a request to widen this year’s  budget deficit by THB50bn to a total of THB400bn because of costs associated with the  nation’s floods, Finance Minister Thirachai Phuvanatnaranubala said.  Expenditure will rise to THB2.38tr and revenue will total THB1.98tr.  (Bloomberg)

Data from the  Association of Indonesia Automotive Industries (Gaikindo) shows that  car sales rose 62.4% yoy in Sep to reach 79,835 units,  (+13.1% in Aug). Motorcycle sales climbed 50.6% yoy in Sep to reverse a 7.3%  decline in Aug. (Bloomberg)

The  Philippine Supreme Court will stop the  government from imposing  and collecting a 20% tax on interest income on PP35bn worth of bonds due,  spokesman Midas Marquez said. The government expects to collect almost  PP5bn in taxes from PEACe bonds sold in 2001. (Bloomberg)

Chinese crude steel production in Sep shrank 3.5% mom to 56.7m tonnes.  The figures are slightly lower than estimates made by the China Iron and Steel  Association, which put Sep output at 58.13m tonnes. (Reuters)

Indonesia's central bank expects  loan growth to ease slightly to 23-24% in  2012 (compared to a 24-25% this year) as the global economic slowdown weighs  on domestic growth, Deputy Governor Halim Alamsyah said. (Reuters)

20111019 1006 Global Market Related News.

Asian Stocks Advance After U.S. Earnings Boost Economic Recovery Outlook (Source: Bloomberg)
Asian stocks rose on signs a global economic recovery may be strengthening after Bank of America Corp. swung to a profit and Intel Corp. forecast sales that beat analyst estimates, boosting the earnings outlook for Asia’s companies. Toyota Motor Corp. (7203), the world’s biggest carmaker, rose 0.7 percent. Mitsubishi UFJ Financial Group Inc. (8306), Japan’s largest lender, advanced 0.6 percent, after Bank of America climbed 10 percent in New York. BHP Billiton Ltd. (BHP), Australia’s No. 1 oil producer, added 0.4 percent after crude rose to the highest price in more than a month. “There’s bound to be some residual optimism because of the strong gains in the U.S. on the back of some earnings optimism,” said Will Seddon, who helps oversee more than $300 million at White Funds Management in Sydney. “We’re bound to see some positive momentum in Asian markets, but the risks with the European situation are still very, very high.”

Demand for U.S. Assets Rose Amid S&P Downgrade (Source: Bloomberg)
Global demand for U.S. stocks, bonds and other financial assets in August was greater than forecast as financial-market turmoil following the downgrade of U.S. debt by Standard & Poor’s boosted demand for Treasuries. Net buying of long-term equities, notes and bonds totaled $57.9 billion, the highest since December 2010, compared with net buying of $9.1 billion in July, the Treasury Department said today in Washington. Including short-term securities such as stock swaps, foreigners bought a net $89.6 billion, compared with net sales of $52.4 billion the previous month. Investors sought the safety of Treasuries as global stocks declined following the decision by S&P to cut the top rating on U.S. debt for the first time on Aug. 5. Moody’s Investors Service and Fitch Ratings affirmed their AAA credit ratings on Aug. 2, the day President Barack Obama signed a bill ending an impasse with lawmakers over raising the nation’s debt ceiling.

Undermining Bernanke Energizes Republican Candidates Joining Fed Insiders (Source: Bloomberg)
The U.S. Federal Reserve is under more pressure than at any point in three decades over Chairman Ben S. Bernanke’s efforts to jumpstart the economy, and the criticism threatens to undermine support for the central bank. Mitt Romney, once a Bernanke defender, now says he would replace him, as have Herman Cain, Newt Gingrich and other Republican presidential contenders. Republican congressional leaders have urged the chairman to “resist” further action. And even some Fed presidents came out against the central bank’s recent attempts to lower long-term interest rates. “If you think of the Fed’s reputation, that is its key political asset,” said Sarah Binder, a senior fellow of governance studies at the Brookings Institution in Washington. “All of these criticisms leave a mark over time.”

Bernanke Says Federal Reserve Seeks to Increase Clarity About Policy Goals (Source: Bloomberg)
Federal Reserve Chairman Ben S. Bernanke said the central bank is likely to rely more on public communications as a policy tool as it seeks to provide clarity about the likely future path of interest rates. “The FOMC continues to explore ways to further increase transparency about its forecasts and policy plans,” Bernanke said today in a speech in Boston. “Forward guidance and other forms of communication about policy can be valuable even when the zero lower bound is not relevant, and I expect to see increasing use of such tools in the future.” Bernanke and his colleagues on the Federal Open Market Committee have approved untested policy tools at their last two meetings to spur a recovery that has left the unemployment rate stuck near 9 percent or higher for 30 consecutive months. The central bank in August pledged to hold interest rates near zero until mid-2013, and in September the Fed announced it will swap $400 billion of short-term debt for longer-term securities in a bid to lower interest rates.

Rise in Homebuilder Sentiment Tops Forecast (Source: Bloomberg)
Homebuilders in the U.S. were less pessimistic than forecast in October as near record-low borrowing costs and price decreases raised hopes the market will turn for the better over the next six months. The National Association of Home Builders/Wells Fargo sentiment index climbed to 18, the highest level since May 2010, from 14 in the prior month, data from the Washington-based group showed today. Economists surveyed by Bloomberg News projected the measure would rise to 15, according to the median forecast. Readings below 50 mean more respondents said conditions were poor. The Federal Reserve’s unconventional measures to boost demand and spur job growth combined with concern over the European debt crises have helped reduce mortgage rates, making buying more affordable. At the same time, the prospect more foreclosures will enter the market and unemployment hovering above 9 percent mean it will take a long time for any recovery to develop.

Wholesale Prices in U.S. Rise More Than Economists Estimated on Food, Fuel (Source: Bloomberg)
Wholesale prices in the U.S. rose more than forecast in September, boosted by gasoline, food and trucks, indicating inflationary pressures continue to bubble up the production line. The producer price index climbed 0.8 percent, the most in five months, after no change in August, Labor Department figures showed today in Washington. Economists projected a 0.2 percent gain, according to the median of 71 estimates in a Bloomberg News survey. The so-called core measure, which excludes volatile food and energy, gained 0.2 percent, also more than predicted. Slower growth from China and Europe to the U.S. means demand for raw materials will probably moderate, helping limit further gains in prices. A pickup in expenses would call into question whether inflation will cool enough to give Federal Reserve policy makers room to further spur the recovery should the world’s largest economy falter.

Los Angeles, Wooed by Occupy Protest, Faces Higher Debt Cost (Source: Bloomberg)
Los Angeles faces tens of millions of dollars in additional borrowing costs after the City Council told anti-Wall Street protesters it intends to cut ties with banks involved in financial wrongdoing, Administrative Officer Miguel Santana said. The city may have to pay $27.8 million in termination fees and replacement costs if it’s prohibited from doing business with banks providing letters of credit for just one infrastructure program, Santana said yesterday in a memo to Mayor Antonio Villaraigosa. Debt service would climb $14.9 million a year if it has to refinance commercial paper into long-term debt at higher rates, Santana said.
Council members in the nation’s second-largest city by population passed a resolution Oct. 12 in support of the demonstrations that started as Occupy Wall Street in New York. They promised to accelerate the issuance of “report cards” rating banks on such things as foreclosures and charitable giving. The vote followed three hours of public comment, much of it by participants in Occupy Los Angeles who’ve camped in front of City Hall since Oct. 1.

Treasuries Advance After Spain Credit Rating Downgrade Spurs Safety Demand (Source: Bloomberg)
Treasuries rose, snapping a loss from yesterday, after Moody’s Investors Service cut Spain’s credit rating, adding to concern that Europe’s sovereign-debt crisis is spreading. Benchmark 10-year rates declined two basis points, or 0.02 percentage point, to 2.16 percent as of 9:30 a.m. in Tokyo, according to Bloomberg Bond Trader prices. The 2.125 percent security due in August 2021 rose 1/8, or $1.25 per $1,000 face amount, to 99 21/32.

S&P 500 Rallies to Highest Since August (Source: Bloomberg)
U.S. stocks gained, sending the Standard & Poor’s 500 Index to the highest level since August, as Bank of America Corp. (BAC) paced a rally in financial shares and optimism grew over progress on expanding Europe’s rescue fund. Bank of America climbed 10 percent after it swung to a profit as credit quality improved. A gauge of homebuilders in S&P indexes jumped 9.6 percent, the most since March 2009, as data showed that industry sentiment increased more than forecast. Caterpillar Inc. (CAT) and Alcoa Inc. (AA) added at least 3.9 percent, pacing gains among companies most-tied to the economy. Apple Inc. (AAPL) tumbled 5.9 percent after the close of regular trading after profit and sales missed analysts’ expectations.
The S&P 500 added 2 percent to 1,225.38 at 4 p.m. New York time, erasing yesterday’s drop. The benchmark gauge rose to the highest level since Aug. 3, two days before S&P stripped the U.S. of its AAA credit rating. The Dow Jones Industrial Average gained 180.05 points, or 1.6 percent, to 11,577.05 today.

Most Accurate China Analyst Sees No Sudden Ease (Source: Bloomberg)
China, facing a hit to exports from Europe’s debt crisis, may refrain from cutting interest rates this year as inflation stays above target and domestic spending supports growth in the engine of the global recovery. Industrial output and retail sales rose at a faster pace in September even as the economic expansion cooled to 9.1 percent in the third quarter, a report released in Beijing yesterday showed. Consumer prices climbed 6.1 percent, exceeding a 4 percent target, a separate release showed last week. “The latest data won’t trigger any sudden change in monetary or fiscal policy, but looking ahead the overall direction is likely to be easing,” said Yao Wei, the only one of 22 economists in a Bloomberg News survey to predict the GDP number. “Consumption has held up quite well,” said Yao, a Hong Kong-based economist for Societe Generale SA.

China’s Economy Expands at Slowest Pace in Two Years on Drag From Europe (Source: Bloomberg)
China’s economy grew 9.1 percent in the third quarter from a year earlier, the slowest pace since 2009, driving stocks lower on concern that Europe’s debt crisis is dragging on the global recovery. The gain was less than the median estimate of 9.3 percent in a Bloomberg News survey of 22 economists and followed a 9.5 percent increase in the previous three months. The statistics bureau released the data in Beijing today. Asia’s benchmark stock index sank after China’s growth was limited by tighter credit and weaker demand from Europe, where Germany yesterday rejected speculation that any immediate resolution of the region’s crisis is possible. A slowdown in the pace of China’s expansion, which remains five times that of the U.S., may help Premier Wen Jiabao to tame inflation that is above the government’s target.

Japanese Stocks Advance as U.S. Earnings Spur Optimism on Economic Outlook (Source: Bloomberg)
Japanese stocks climbed on signs a global economic recovery may be strengthening after Bank of America Corp. swung to a profit and Intel Corp. forecast sales that beat analyst estimates, boosting the earnings outlook for Asian companies. Toyota Motor Corp., the Japan’s No.1 carmaker, gained 0.9 percent. Mitsubishi UFJ Financial Group Inc., Japan’s largest lender by market value, added 1.2 percent. Tokyo Electron Ltd., the world’s second-largest maker of semiconductor equipment, climbed 1.6 percent. Tokyo Steel Manufacturing Co. fell 1.7 percent after the steelmaker reported a wider first-half loss. The Nikkei 225 (NKY) gained 0.9 percent to 8,823.21 as of 9:15 a.m. in Tokyo. The broader Topix index rose 0.8 percent to 757.27, with about six stocks gaining for each that fell.

Spain’s Rating Cut to A1 by Moody’s (Source: Bloomberg)
Spain’s credit rating was cut for the third time since June of last year by Moody’s Investors Service as Europe’s debt crisis threatens to engulf the nation. Moody’s yesterday reduced its ranking to its fifth-highest investment grade, cutting it by two levels to A1 from Aa2, with the outlook remaining negative. Standard & Poor’s downgraded Spain on Oct. 14 to its fourth-highest investment grade, and Fitch Ratings cut it to the same level on Oct. 7, the day it also downgraded Italy. Moody’s, in a statement, cited the “continued vulnerability of Spain to market stress” that is driving up the cost of borrowing, as well as weaker growth prospects. “Moody’s is maintaining a negative outlook on Spain’s rating to reflect the downside risks from a potential further escalation of the euro area crisis.” The euro slipped 0.1 percent to $1.3738 at 7 a.m. Tokyo time.

Merkel Says EU Summit to Be Important, Not Final, Step in Resolving Crisis (Source: Bloomberg)
German Chancellor Angela Merkel said that a European Union summit in five days will mark an “important step,” though not the final one in solving the euro-area sovereign debt crisis. “These sovereign debts have built up over decades, so they won’t be ended with one summit,” Merkel told reporters in Berlin late today. While European officials recognize their responsibility to stop the crisis, “this will require tough, long-term work.” The comments marked the second time in two days that Merkel sought to lower expectations that the European crisis-fighting effort would climax at the Oct. 23 meeting in Brussels, as international officials are advocating.

France Risks AAA on Expanded EFSF Bailout Fund: Euro Credit (Source: Bloomberg)
Proposals to beef up Europe’s bailout fund by offering to guarantee portions of the debt owed by the region’s weaker governments threaten to trash France’s top credit rating. The nation’s 10-year notes are the fourth-worst performers this quarter -- behind Greece, Belgium and Ireland -- as traders speculate the European Financial Stability Facility will be used to insure the first portion of losses in the event of a sovereign default. France’s rating is under pressure, Moody’s Investors Service said yesterday, and investors now demand a record 112 basis points more to hold its bonds rather than German notes, up from 29 basis points in April. “France is the key factor here,” said Bob McKee, chief economist at Independent Strategy Ltd. in London. “Offering insurance increases France’s contingent liability and that puts pressure on its rating. If France loses its AAA status, that in turn increases the pressure on Germany.”

East Europe’s Economic Growth Hurt by ‘Protracted’ Euro Crisis, EBRD Says (Source: Bloomberg)
Economic growth in eastern Europe is slowing “substantially” as a “protracted” euro-area debt crisis infects the region, the European Bank for Reconstruction and Development said. The EBRD cut its 2012 growth forecast for the 29 east European and central Asian nations in which it invests to 3.2 percent from 4.4 percent in July, according to a report released today. Growth will slow from this year’s 4.5 percent, the EBRD said, revising its previous estimate of 4.8 percent. While three months ago the EBRD assumed “a relatively benign external environment” with contained spillover risks from the euro area, it now says the escalating crisis has infected eastern Europe through intertwined trade and banking links. The development bank expects drawn-out repercussions from the euro region’s troubles, which will ultimately be contained, under its main scenario.

Inflation in U.K. Accelerates More Than Forecast to Match 5.2% Record High (Source: Bloomberg)
U.K. inflation accelerated to match a record high in September, a surge Bank of England policy makers set aside as they shifted their focus to combating the threat of another recession. Consumer prices rose 5.2 percent from a year earlier, compared with 4.5 percent in August, the Office for National Statistics said in London today. That matched the record high reached in September 2008, which was the highest since comparable records began in 1997. The median estimate of 35 economists in a Bloomberg News survey was 4.9 percent. Bank of England Governor Mervyn King has said consumer-price growth will probably peak in September and slow “sharply” in 2012.
The Bank of England restarted asset purchases on Oct. 6 to protect Britain’s recovery from risks related to the euro-area debt crisis, and some officials have since signaled they may add to the emergency stimulus if needed. King will deliver a speech in Liverpool later today and minutes of the decision showing how policy makers voted this month will be published tomorrow.

German Investor Confidence Drops to Three-Year Low as Debt Crisis Prevails (Source: Bloomberg)
German investor confidence fell to the lowest in almost three years in October as Europe’s debt crisis threatened to infect banks and curb economic growth. The ZEW Center for European Economic Research in Mannheim said its index of investor and analyst expectations, which aims to predict developments six months in advance, declined to minus 48.3 from minus 43.3 in September. That’s the lowest since November 2008. Economists expected a drop to minus 45, according to the median of 39 estimates in a Bloomberg News survey. Stocks and the euro erased gains yesterday after the German government said European leaders won’t deliver a complete solution to the region’s debt crisis at an Oct. 23 summit. While Germany’s Bundesbank yesterday predicted “strong” growth in the third quarter thanks to a rebound in industrial production and private consumption, it said the outlook has deteriorated.

U.K. Stocks Decline; Mining Shares Retreat on Chinese Data (Source: Bloomberg)
U.K. stocks declined for a second day after data showed China’s economy grew at the slowest pace in two years, adding to concern that Europe’s debt crisis is dragging on the global recovery. Rio Tinto Group and Vedanta Resources Plc (VED) lost at least 3.5 percent as copper retreated in London. Standard Chartered Plc (STAN) dropped 2.7 percent after Singapore’s Temasek Holdings Pte Ltd. sold $513 million of exchangeable bonds. The FTSE 100 Index (UKX) slid 26.35, or 0.5 percent, to 5,410.35 at the close in London after falling by the same extent yesterday. The FTSE All-Share Index also lost 0.5 percent today, while Ireland’s ISEQ Index rose 0.6 percent in Dublin. “London’s collection of major mining stocks has been under pressure from the start today, providing another drag for the FTSE,” said London-based Yusuf Heusen, a sales trader at IG Index in London. “For now the short-term bears have the upper hand in stock markets.”

European Stocks Fall for Second Day on Debt Crisis, China Growth Concern (Source: Bloomberg)
European stocks fell as concern that France may lose its top credit rating added pressure on the region’s leaders to find a solution to the debt crisis and as China’s economy grew at the slowest pace in two years. BHP Billiton Ltd. (BHP) and Rio Tinto Group led mining shares lower as metals declined. BNP Paribas (BNP) SA and Societe Generale (GLE) SA sank more than 3.5 percent as Moody’s Investors Service said France’s Aaa rating is under strain. Danone rose 2.2 percent as it was said to be in talks to sell water assets to Japan’s Suntory Holdings Ltd. The benchmark Stoxx Europe 600 Index slipped 0.4 percent to 235.33 at the close of trading. The gauge retreated 1 percent yesterday as a German government spokesman said that euro-area leaders will not provide a complete fix to the debt crisis at their next meeting. The measure has still rallied 9.5 percent from this year’s low on Sept. 22.

Yen, Dollar Climb on Spain Rating Cut (Source: Bloomberg)
The yen and dollar strengthened against the majority of their most-traded peers after Moody’s Investors Service cut Spain’s credit rating and before a European report that may show consumer confidence dropped. The euro failed to extend a gain versus the dollar from yesterday, which came as the Guardian newspaper reported Germany and France support boosting a rescue fund for indebted member states to 2 trillion euros ($2.8 trillion). The Australian dollar slid versus 15 of its 16 major peers as futures indicated U.S. shares will fall. “Market sentiment is rather risk-off,” said Kengo Suzuki, manager of the foreign-bond department in Tokyo at Mizuho Securities Co., a unit of Japan’s third-biggest listed bank by market value. “The bias is for the yen to rise amid risk aversion.”

20111019 1005 Global Commodities Related News.

Commodity-Speculation Limits Approved in 3-2 Vote by U.S. Regulator CFTC (Source: Bloomberg)
The top U.S. derivatives regulators voted 3 to 2 today to curb trading in oil, wheat, gold and other commodities after a boom in raw-materials speculation, record- high prices and years of debate and delay. The rule has been among the most controversial provisions of the Dodd-Frank financial overhaul, enacted last year, which gave the Commodity Futures Trading Commission the authority to limit trading in over-the-counter commodity swaps as well as exchange-traded futures. The rule will limit the number of contracts a single firm can hold. “Our duty is to protect both market participants and the American public from fraud, manipulation and other abuses,” Chairman Gary Gensler said at the commission’s meeting in Washington in support of the rule. “Position limits have served since the Commodity Exchange Act passed in 1936 as a tool to curb or prevent excessive speculation that may burden interstate commerce.”

Speculators Not Responsible For High, Volatile Food Prices -DWS (Source: CME)
Speculators in agricultural commodity markets are not responsible for the recent volatility in food prices, Stefan Meinhold, senior product specialist for DWS Invest Global Agribusiness fund has said. Instead he attributes the high and fluctuating prices to severe weather that damages crops and harvests and disrupts supplies. The role of speculation in agricultural markets and in pushing up prices has been debated this year after the United Nations' food body data showed world prices had reached record highs. Countries such as Egypt need to import wheat and other staple foodstuffs to bring down rising food prices, which was one of the reasons behind street protests earlier this year that forced President Hosni Mubarak to step down. But DWS's Meinhold told Dow Jones Newswires late Monday: "We tend to forget that agribusiness is very basic in many ways. If we don't have good weather in the major growing regions of wheat or coffee, you are going to see price swings for that commodity in question."
Extreme weather patterns, in the form of drought or excessive rainfall, that ultimately can both damage the harvesting of crops, have been rising over the last 20 years, said Meinhold. "Climate change issues are certainly a trend that we see developing further out, but because it is a long-term feature to food supply disruption, it's easily overlooked. The sheer frequency of extreme weather patterns is concerning," Meinhold said. DWS Invest Global Agribusiness invests globally in companies that are either in the agricultural sector or profit from this sector and include investments in fertilizers and agricultural chemicals, agricultural products and packaged foods and meat.

Corn (Source: CME)
US corn futures close higher as buyers step in to take advantage of early losses. Recent setbacks have put the grain at prices that are attractive to corn users, analysts say. Gains were a turnaround from opening losses linked to concerns about a global economic slowdown. "The buyers are under the market," notes Larry Glenn of Frontier Ag. Market participants were buying front-month contracts and selling deferred contracts in spread trades. CBOT December corn rises 3 1/2c to $6.44/bushel.

Wheat (Source: CME)
US wheat futures finish stronger, with MGEX posting the biggest gains as supplies tighten. Farmers are refusing to sell spring wheat, traded at MGEX, until prices increase, reducing the amount of available to grain users. CBOT wheat also advances, while KCBT wheat slips slightly as recent rains continue to ease concerns about dryness hurting output in the Plains. CBOT December wheat edges up 1c to $6.25 1/4 a bushel; KCBT December dips 2 3/4c to $7.11 1/2; MGEX December climbs 10 3/4c to $9.06 1/2.

Rice (Source: CME)
US rice futures close sharply lower in a setback from Monday's three-week high. Traders continued to book profits after prices jumped yesterday on concerns about tightening supplies. Traders are still on edge after USDA, in a monthly report last week, lowered its year-end US inventory outlook. Floods in Thailand, the world's top rice exporter, helped fuel supply concerns Monday. CBOT November rice pulls back 26 1/2c to $16.26/hundredweight.

Corn, soybeans fall on harvest, economic outlook
KUALA LUMPUR, Oct 18 (Reuters) - U.S. corn and soybeans fell on Tuesday, weighed down by a pickup in harvest and a gloomy economic outlook that raised concerns demand will slow, while data out of China also dented investor sentiment.
"It's bearish via the impact on non-food commodities, particularly on energy prices," said Malcom Bartholomaeus, a Melbourne-based analyst at Profarmer Grain Australia, which provides grains marketing advice.

Argentine wheat and corn benefit from rains
BUENOS AIRES, Oct 17 (Reuters) - Rain over the last 10 days in Argentina's central grains-growing area revitalized parched wheat fields and helped farmers with their 2011/12 corn sowing, but dry weather could return, a forecaster said on Monday.
Argentina is the world's No. 2 corn supplier after the United States, producing a record 22.9 million tonnes in the 2010/11 season, government data shows.

Ukraine cuts winter grain area due to poor weather
KIEV, Oct 17 (Reuters) - Ukrainian farmers cut the area of winter grains sown for the 2012 harvest by 1.0 million hectares due to lack of significant rainfall in the main growing areas, a senior weather forecaster said on Monday.
Tetyana Adamenko, the head of the agricultural department of Ukraine's meteorological centre, told Reuters that 1.5 million hectares already sown to winter grains were 'under risk' this winter because seeding had been into dry soil and plants had not developed enough to survive during the winter.

Canada Govt To Dismantle Wheat Board, Orders Restructuring Of Agency (Source: CME)
Canada's Conservative government introduced a bill that dismantles the Canadian Wheat Board and orders a new management team to restructure and sell off parts of the agency within a five-year timeframe. Meanwhile, farmers will gain the right to sell their crops to whoever they choose starting Aug. 1 of next year. Once the bill clears the final legislative hurdle - which the government wants before the end of 2011 - farmers would be able to enter into forward contracts for the sale of grain in the post-Aug. 1 period. The bill was formally introduced in the legislature, and at a media conference Agriculture Minister Gerry Ritz said the "sky will not fall" despite arguments from opponents of the move. "The removal of this monopoly will allow farmers to sell their grains directly to a processor, whether it is a new pasta manufacturer, a new flour mill or any other existing processing plant," Ritz said. With this move, the Conservatives are fulfilling a long-time promise to end the wheat board's monopoly powers.
Under the bill, the wheat board would continue to be owned by the government, and the board could engage in the purchase and selling of grains from farmers. "At the end of the day, it will be up to farmers to make use of the value of the wheat board going forward," Ritz said. A team of five corporate directors, including the board's chief executive, would then oversee a restructuring period of no more than five years. The board would operate a so-called "voluntary" organization, and develop a business plan for privatization. After five years, whatever operations haven't been sold would be wound down. Ritz declined to say whether the government would give its blessing to a sale of board assets to key agriculture companies such as Viterra Inc. (VT.T) and privately-held Cargill.
The Conservative government holds a majority of seats in the Canadian legislature, so the bill is certain to pass. And Ritz said it's his intention the bill pass by the end of this calendar year in an effort to provide clarity and direction for farmers. "Any delay would only hurt farmers," he said, adding that a parliamentary debate would offer no new details or developments. The present chairman of the Canadian Wheat Board vowed to explore legal means to stop the government. The Canadian Wheat Board recently conducted its own plebiscite in which 62% of respondents were in favor of keeping the single desk for wheat and 51% for barley.

FAO Calls For Coordination In Fighting Food Prices Volatility (Source: CME)
The head of the Food and Agriculture Organization called for international coordination in fighting world hunger and food price volatility, saying coordinated steps are crucial at a time of global crisis, ahead of the Group of 20 industrialized and developing nations summit in Cannes in early November. "Food prices will remain high and volatile in the next years," said FAO director general Jacques Diouf, adding that countries have to avoid "contradictory moves." Diouf and French Agriculture Minister Bruno Le Maire held a joint press conference on the issue of price volatility--a key concern for France's presidency of the G20. Debate over speculation in agricultural markets has increased this year after data from the United Nations' food body showed world prices reached record highs.
North African countries, such as Egypt, need to import wheat and other staples to bring down rising food prices, which was one of the main reasons behind street protests earlier this year that forced President Hosni Mubarak to step down. World food prices rose in February to a new record peak to an average of 236 points, the highest record in real and nominal terms since the U.N. food body started monitoring prices in 1990. Diouf stepped short of indicating if the G20 will provide concrete answers to the problem of food prices volatility, but added that lone countries don't have enough tools to deal with food price increases, and investments in agriculture, research and innovation will remain key. La Maire also highlighted the issues of biofuels and land grabbing, but said it is difficult to deal with them "immediately."
The United Nation's food body last week warned that food prices are set to stay high and volatile as production struggles to keep pace with rising demand from emerging countries and to divert grain to make biofuels.

Rice May Rally as Thai Floods, State Buying Hand Export Advantage to India (Source: Bloomberg)
Rice may advance 19 percent after floods cut supplies in Southeast Asia, including in the biggest shipper Thailand, and that nation’s government started a state- purchasing program, according to the country’s largest packer. The price of Thai parboiled rice may climb to $750 per metric ton on a free-on-board basis by year-end from $630, while the same product from India may gain to $500 per ton from $480, C.P. Intertrade Co. President Sumeth Laomoraphorn said in an interview in Bangkok. Parboiled rice is soaked, steamed and dried before milling, a technique that preserves vitamins. Costlier rice may push up global food costs and elevate inflation, complicating the task for the world’s central bankers as they seek to sustain economic growth hurt by the euro zone debt crisis. Indian suppliers may benefit from sales not met by Thailand and the South Asian nation may become the world’s second-largest supplier, Sumeth, 50, said on Oct. 17.

SE Asia flood impact on rice supply, prices in focus
HO CHI MINH CITY, Oct 18 (Reuters) - Tightening rice supply in top exporter Thailand due to floods and defaults by Vietnam as prices jump could prompt Indonesia,  Africa and the Middle East to delay imports until the market steadies or seek cheaper options from India and Pakistan.
International traders and government officials meeting in Vietnam this week will also assess the full impact of flooding on output in the top two exporters, whether prices will escalate further and the demand outlook for typhoon-hit Philippines.

Kazakh state grain trader plans return to exports
ASTANA, Oct 17 (Reuters) - Kazakhstan's state-owned grain trader will return to the export market this season, shipping up to 1.5 million tonnes of what promises to be the country's biggest post-Soviet grain crop, the head of the company said.
Beibitkhan Kabdrakhmanov, chairman of the management board at the Food Contract Corporation, forecast that Kazakhstan would have an exportable grain surplus of around 13 million tonnes in the current marketing year.

China Food Prices Fall On Week; Vegetables Lead -Ministry (Source: CME)
Food prices fell in the week to Sunday in response to ebbing demand pressures in the wake of October National Day holidays in early October, the Ministry of Commerce said. Wholesale prices for 18 types of vegetables fell 5% compared with the immediately preceding period, the ministry said in a statement. The decline snapped an upward trend in vegetable prices since Aug. 15. Vegetable prices had risen 1.7% the preceding week. Pork prices fell 1.2% in the week to Sunday, while beef was down 0.4%, also reversing a trend of increases, the ministry said. Edible oil prices rose by 0.1%-0.2% in the period, it said.

USDA Acknowledges Difficulties Making Crop Estimates This Year (Source: CME)
Federal agriculture officials acknowledged they struggled to accurately issue crop estimates this year and placed some of the blame on the ethanol industry. Officials for the U.S. Department of Agriculture, gathered for an annual industry meeting at a Chicago hotel, said it had been difficult to estimate year-end inventories, output and plantings for crops like corn and soybeans. They responded to concerns about their estimates from analysts and traders, who rely on the department's data to make decisions in agricultural futures markets also used by farmers and food companies. "I think everybody in this room, USDA included, has had a difficult forecasting year," Gerry Bange, chairman of the USDA's World Agricultural Outlook Board, told the gathering. The USDA has been under fire from some analysts because of big swings in its crop estimates.
Most recently, the department shocked market participants last week by raising its outlook for year-end corn supplies by 29% from September, a bigger-than-expected increase. Traders and analysts depend on the department's crop estimates. They come out at set times each month, are the subject of intense scrutiny, and often cause immediate price swings. They influence what a farmer will plant, how much hedging a farmer will do, and whether an investor will buy or sell. Officials said the larger-than-expected supply outlook reflected a shift in recent years in the amount of corn used in the second half of the crop's marketing year, which ended Aug. 31. More of the grain is being consumed in the first half of the year than it has been historically, leading many analysts to overestimate demand and underestimate supplies later in the year, said Jerry Norton, a grain analyst for the world board, which issues monthly estimates on supply and demand. He said he didn't know the reason for the shift.
"What we're seeing is an emerging pattern," Norton said. Analysts at the meeting said they would incorporate the new pattern into their market forecasts by concentrating demand estimates in the first half of the marketing year. That could help them to more accurately predict crop prices. Another pattern is the increased unpredictability of the department's supply estimates. Federal officials are having a tougher time estimating how much corn to put in a category that accounts for corn fed to livestock and in transit from one place to another. The category--known as "feed and residual"--also accounts for margins of error used in estimating overall use of the crop.
The residual portion of the category has become "less predictable over time" because more of the crop is being used to produce ethanol, Norton said. The increase in corn used for ethanol means there is a more significant margin of error for that category and reduces the amount of the total crop left for feed and residual purposes, he said. That means the increased margin of error is more influential in the feed and residual category, making it more erratic. "You're pushing a bigger error into a smaller category," he said. Norton said the feed and residual category started to become more unpredictable as the ethanol industry was expanding in the 2005-06 marketing year. About 40% of the U.S. corn harvest is expected to be used to make ethanol in the 2011-12 marketing year that ends next August, up from 14% in the 2005-06 marketing year.

Ukraine Harvests 45.85M Tons Grain To Oct 17 (Source: CME)
Ukraine harvested 45.85 million metric tons of grain to Oct. 17, 19% more than on the same date last year, on 13.6 million hectares, 88.6% of the total area to be harvested, the agriculture ministry reported. The average yield to date was 3.38 tons a hectare compared with 2.74 tons a hectare a year ago. The government expects this year's grain harvest at 52 million to 53 million tons. Ukraine's grain harvest in 2010 fell by 14.8% on the year to 39.23 million tons in clean weight because of drought.

Captive Labor on the Farm (Source: CME)
Weary workers rise at dawn here in the heart of Idaho potato country, eager for another day outside. They're convicts, deployed by Idaho's Department of Correction to pick, sort and pack potatoes during harvest season. "This is the first year we're doing a harvest," said Steve Little, warden here at the minimum-security St. Anthony Work Camp. Prior to this season, he explained, inmates worked mainly in processing sheds and kitchens, not open fields. But farm labor is so scarce, Mr. Little said, that prisoners now pick as well as pack potatoes. Despite high unemployment across the U.S., many farmers are struggling to find hands willing to labor in their fields. From Arizona to Alabama, states are cracking down on undocumented migrant labor with legislation that gets tough on employers. One result: some "illegal" farm hands are being replaced by criminal ones.
In fact, there is such demand for Mr. Little's charges that employers here operate under a "use it or lose it" principle: Farms that cut back on prison labor usually can't get more later if they need it. "They give you an amount of inmates, say 10, and if you can't employ them, they drop them and you'll never get 'em back," said Todd Cornelison of the Idaho Potato Commission. The trade-off hasn't always gone smoothly. When Georgia faced a looming shortage earlier this year in the wake of new employment rules, parolees were sent to fill some 11,000 vacant spots harvesting such things as cucumbers. Probation officers urged their charges to work on farms, and some did. But growers complained many parolees were ill-prepared and quit on them.
This month, Alabama got into the act. With strict new laws chasing many immigrant farm hands from the state, John McMillan, commissioner of Alabama's Department of Agriculture and Industries, announced he would look to prison work-release programs to put workers in the fields. Idaho's program has been in place more than a decade, but isn't widely publicized, in part to avert criticism that prisoners are taking jobs from the unemployed or, alternatively, that inmates don't deserve a chance to work outside prisons. None of the growers using inmates near here would talk about the practice, though their contracts are a matter of public record. SunGlo of Idaho Inc., Walters Produce Inc., High Country Potato Inc., and Floyd Wilcox & Sons Inc. all have long-term contracts with Idaho's Department of Correction. Each declined to comment.
The inmates themselves are enthusiastic about their jobs. Some cite the chance to earn extra money handling potatoes. Most say wages, as much as $7.50 an hour, exceed what prisons pay for "inside" jobs such as laundry or janitorial work, where pay starts at 10 cents an hour. Others emphasize the chance to learn a trade and be around folks who aren't convicted felons. "The best part is you have the influence of the real world, which eventually we're all going back to," said Thomas Alworth, a 36-year-old convicted of grand theft by possession. Mr. Alworth, who is eligible for parole in a little over three years, also praised the program's mandatory-savings rule, which he calculates will put between $3,000 and $10,000 into his account by the time he is released. (Idaho is one of several states that require inmates to save a portion of their pay to support themselves after release.)
Convict labor has a dark history in America, notoriously in the post-Civil War South, when thousands of African-Americans endured what historians say was a kind of de facto enslavement as prisoners on chain gangs.

Sugar Shortages Extend Across Europe as Global Glut Expands: Commodities (Source: Bloomberg)
At a time when the world is facing its biggest sugar glut in at least four years, trade barriers mean the European Union is contending with a second consecutive annual shortage. EU supply will fall 1.1 million tons short of demand in the 12 months ending in September, according to the Committee of European Sugar Users, whose members include Nestle SA (NESN), Unilever and Kraft Foods Inc. Global output will exceed usage by 5.32 million metric tons, Macquarie Group Ltd. predicts. As world sugar prices fell 23 percent in the past eight months, costs in the 27-nation bloc reached a two-year high.
The EU, once the second-biggest sugar exporter, spent about 5.2 billion euros ($7.1 billion) since 2006 to shrink the industry after the World Trade Organization ruled it was dumping subsidized supply on world markets. At the same time, the bloc failed to scrap import duties, leaving users with the choice of either paying about 60 percent more than in the international market or shunning purchase and shuttering production.

Markets dip in broader slide on China GDP
LONDON, Oct 18 (Reuters) - ICE raw sugar, arabica coffee and cocoa eased on Tuesday as renewed concerns of a slowdown in China hit world markets including stocks and oil.
Arabica coffee futures edged lower, extending losses following a sharp fall the previous session on a combination of large looming crops and the negative macroeconomic outlook.

Central America takes stock of rain damage to coffee
SAN JOSE, Costa Rica, Oct 17 (Reuters) - Central America coffee growers are counting their losses after two weeks of rainstorms have felled coffee trees, ruined roads and threatened to spread fungus on plants.
The rains have already killed more than 80 people in the isthmus, where the countries of Guatemala, Honduras, Nicaragua, El Salvador and Costa Rica all produce high-quality arabica beans contributing to global supplies.

Philippine raw sugar output up 21 pct-attache
Oct 17 (Reuters) - Following are selected highlights from a report issued by a U.S. Department of Agriculture attache in the Philippines:
"Philippine raw sugar production increased 21 percent to 2.4 million tonnes in Crop Year 2010/11, while cane production rose 33 percent to 25,900 million tonnes over the same period.  The increase was due mainly to higher yields from favorable weather conditions as well as a price-induced expansion in sugarcane area.

Ivorian cocoa arrivals seen low, farmers stockpiling
ABIDJAN, Oct 17 (Reuters) - Cocoa arrivals at ports in top grower Ivory Coast reached around 19,000 tonnes by Oct. 16, exporters estimated on Monday, less than half the volumes seen in the same period of last season, as farmers held back stocks awaiting higher prices.
The figure compared with 41,439 tonnes in the same period of the previous season.

Mexico coffee exports rise in 10/11, Nicaragua down
MEXICO CITY, Oct 17 (Reuters) - Mexico exported 2.7 million 60-kg bags of coffee in the 2010/11 harvest, which drew to a close last month, 6 percent higher than the previous season; nearby Nicaragua saw exports fall in the same period.
Nicaragua exported 1.5 million bags of coffee in the October-September coffee growing year, down 9.5 percent from the 2009/10 harvest, the national export board said on Monday.

Rains hamper Brazil's cane harvest but should ease
SAO PAULO, Oct 17 (Reuters) - Persistent rains over the past few days have hindered cane harvesting in Brazil's main center-south cane producing region, but the weather should turn dry again soon, meteorologists Somar said on Monday.
More than 20 mills out of about 350 in the region have finished crushing for the 2011/12 season, about twice as many as a year ago, as the center-south posts its first drop in output in 11 years.

Ivory Coast rains, sun boost cocoa crop-farmers
ABIDJAN, Oct 17 (Reuters) - Abundant rains punctuated by sunny spells last week in most of Ivory Coast's key cocoa regions have boosted the main crop, but heavy rains in some areas have prevented harvesting and may damage quality by preventing proper drying, farmers said on Monday.
Harvesting of the 2011/12 cocoa main crop (Oct-Mar) is underway and farmers in western regions said they were expecting a healthy main crop, even compared with last season.-

Oil Trades Near Month High as Europe Outlook Counters Stockpiles Forecast (Source: Bloomberg)
Oil traded near the highest close in more than a month in New York as signs that Europe may contain its debt crisis and prevent a slump in demand countered speculation U.S. crude supplies increased last week. Futures were little changed, after advancing 2.3 percent yesterday, before the release of Energy Department data today that may show supplies climbed 2 million barrels. An industry report showed they dropped a third week. Prices surged yesterday after The Guardian newspaper said Germany and France agreed to boost the European rescue fund. Crude for November delivery was at $88.17 a barrel, down 17 cents, in electronic trading on the New York Mercantile Exchange at 10:16 a.m. Sydney time. The contract yesterday rose $1.96 to $88.34, the highest close since Sept. 15. The more-actively traded December future slid 15 cents to $88.38. Prices are down 3.5 percent this year.

Brent falls as China GDP, euro zone weigh
LONDON, Oct 18 (Reuters) - Brent crude futures fell below $110 a barrel, paring earlier gains, after weaker Chinese third-quarter economic growth prompted concern about future demand from the world's second-largest oil consumer and as Moody's warned France of a negative outlook.
"This morning the focus is on China, GDP was slightly lower than expected and the oil-specific numbers were very disappointing," Olivier Jakob from Petromatrix said.

China Sept oil demand up 1 pct, lowest this year
BEIJING, Oct 18 (Reuters) - China's implied oil demand grew at 1 percent on the year in September to about 8.9 million barrels per day (bpd), the lowest this year, Reuters calculations based on preliminary government data show.
The data shows a continuing trend of slowing oil demand since June from the double-digit growth since late last year as Chinese economic growth slows and tightening credit cuts into fuel spending by small industries.

Libyan oil needs $30 bln to reach 3 mbd -France
PARIS, Oct 17 (Reuters) - Raising Libya's oil production to 3 million barrels per day by 2015 will cost about $30 billion, the head of France's trade commission UbiFrance said on Monday, after travelling with French firms to Tripoli to meet interim government officials.  
About 80 French companies, including the likes of oil giant Total , cement maker Lafarge  and engineering group Alstom , met Libyan ministers, officials and company executives during the one-day trip to the Libyan capital on Oct. 12 to position themselves for future contracts.

Libya oil fields face guerrilla war threat
LONDON, Oct 17 (Reuters) - Pro-Gaddafi fighters may resort to hit-and-run guerilla attacks against Libyan politicians, foreign workers and oil installations in the remote southwestern Fezzan district if they are driven from their last bastions, risk consultants say.
A full-scale insurgency like the one that erupted in Iraq following the ouster of Saddam Hussein by U.S.-led forces is unlikely, but a determined guerrilla campaign could make life difficult for Libya's new rulers and foreign oil companies considering a return.

Copper Falls as Slowing Chinese Econony Signals Weakening Demand for Metal (Source: Bloomberg)
Copper fell for a second day as economic growth slowed to a two-year low in China, the world’s largest metals consumer. Gross domestic product in China rose 9.1 percent in the third quarter from a year earlier, the slowest pace since 2009, figures from the country’s statistics bureau showed. Prices also retreated as investor confidence in Germany, the third-biggest copper consumer, reached the lowest level in almost three years. “Investors sense that accelerating Chinese metal demand that was so prevalent in prior years may now give way to decelerating demand, something that may not support a scenario of higher metals prices over the medium term,” Edward Meir, a senior commodity analyst at MF Global Holdings Ltd. in Darien, Connecticut, said in a report.

Maersk Shareholders Suffering With Overwhelming Container Supply: Freight (Source: Bloomberg)
The container industry may be facing half a decade of oversupply that will curb freight rates as shipping lines launch vessels into a global trade slowdown. The rise in container capacity will exceed demand by as much as 10 percentage points over the next three years, according to Drewry Shipping Consultants Ltd. That gap won’t substantially improve for five years, Neil Dekker, head of container research at Drewry, said in an Oct. 11 interview. Those estimates assume no slump in world economic output. Global growth will slow this year as “crisis-hit” advanced economies struggle and Europe’s debt woes prove “tenacious,” the International Monetary Fund said last month. An increase in vessels from shipping lines like Copenhagen-based A.P. Moeller-Maersk A/S has helped send freight rates plunging 70 percent since a 2010 peak. On its current course the industry will struggle to turn profitable, said Ross Porter, a Stavanger, Norway-based fund manager at Skagen A/S.

20111019 1004 Soy Oil & Palm Oil Related News.

Soybeans (Source: CME)
US soybean futures close lower as market participants take profits following strong gains last week. Traders say they unwound spread trades, in which they were long soybeans and short corn or wheat. That pressured soybeans and helped boost the grains, which finished slightly higher. Still, soybeans finished off session lows on an improving demand outlook. CBOT November soybeans slipped 2 1/4c to $12.50 3/4 a bushel.

Soybean Meal/Oil (Source: CME)
CBOT December soyoil drops 0.2c to 52.70c/pound while December soymeal rises $1.30 to $324.30/short ton.

Euro zone, China data drag palm oil to one-week lows
KUALA LUMPUR, Oct 18 (Reuters) - Malaysian palm oil futures dropped to their lowest in a week on Tuesday as Europe's debt problems continue to fester and China reported slightly slower economic growth, raising concerns of slower commodity demand.
"It's all about the macro situation," said a trader with a foreign commodities brokerage.

China soy crushing capacity to hit 125 mln T by 2012 -CNGOIC
BEIJING, Oct 18 (Reuters) - China is seen expanding soy crushing capacity by 12.5 million tonnes in 2012 to 125 million tonnes, which will continue to spur imports of soybeans by the world's top soy buyer, an official think-tank said on Tuesday.   Soy processing capacity this year is likely to increase by 17.5 million tonnes, which can either process soybean or rapeseed, the China National Grain and Oils Information Centre (CNGOIC) at a report. Earlier the centre had expected an increase of 12.3 million tonnes of soy capacity for this year.

Brazil new and old crop soybean sales - Celeres
SAO PAULO, Oct 17 (Reuters) - Sales of Brazil's 2011/12 soybean crop rose to 28 percent of the total expected production of 75.2 million tonnes, up from 26 percent a week earlier, analysts Celeres said on Monday.
Producers have begun to plant the new crop widely across the center-west and southern soy belt, where heavy rains spread over the past weeks and will now taper off for a several days.

Weather points to record Paraguay soy crop-industry
ASUNCION, Oct 17 (Reuters) - Paraguay could produce a record soy crop of between 8.5 million and 9 million tonnes this season due to forecasts for more rains than expected over the next few months, an industry official said on Monday.
Farmers in the world's No. 4  soybean exporter had feared that dry weather related to the La Nina weather anomaly could limit 2011/12 soy production.

Drenched Brazil soy fields to dry out - Somar
SAO PAULO, Oct 17 (Reuters) - A wave of rains drenched Brazil's soy belt over the past several days, which will favor planting as skies clear this week, local forecasters Somar said on Monday.
After a slow start to rains over Brazil's main center-west soy producing states, showers pushed into the region over the past week with greater consistency, bringing ample moisture to some regions.