Wednesday, August 15, 2012

20120815 1812 FCPO EOD Daily Chart Study.

FCPO closed : 2862, changed : +4 points, volume : lower.
Bollinger band reading : pullback correction downside biased.
MACD Histogram : recovering, buyer seller battling.
Support : 2840, 2800, 2770, 2750, 2720 level.
Resistance : 2880, 2900, 2920, 2950, 2970 level.
Comment :
FCPO closed marginally higher with lesser volume changed hand. Soy oil currently trading higher after overnight closed recorded loss while crude oil price currently trading range bound between gain and losses after recent rally.
Price tested below and closed above 2840 support level for the 4th day recorded small gain after both cargo surveyors reported improving exports data.
Technical chart study revised to suggesting a pullback correction downside biased development.
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.

20120815 1737 FKLI EOD Daily Chart Study.

FKLI closed : 1649.5 changed : -2 points, volume : lower.
Bollinger band reading : little upside biased.
MACD Histogram : recovering, buyer in little advantage.
Support : 1640, 1630, 1623, 1615 level.
Resistance : 1650, 1660, 1670, 1680, 1690 level.
Comment :
FKLI closed recorded little lower with holidy mood volume exchanged doing about 4 points discount compare to cash market that closed margianlly higher. Overnight U.S. markets closed mixed and today Asia markets ended mostly lower while European markets also having negative development.
Restored global economy growth slow down concern, no stimulus measure implementation news, drops in some corporate earnings sent most markets traded lowe despite overnight better than consensus U.S. retail sales while investors awaits U.S. factories data.
FKLI technical chart reading continue to suggesting a little upside biased market development with MACD started to having positive crossed up.
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.

20120815 1657 Regional Markets EOD Daily Chart Study.

 DJIA chart reading : correction range bound upside biased. 
 Hang Seng chart reading : upside biased.
KLCI chart reading :  little upside biased with possible pullback correction.

20120815 1631 Global Markets & Commodities Related.

GLOBAL MARKETS: Asian shares fell as investors booked gains from recent rallies after data showing strong U.S. retail sales and Germany and France avoiding a contraction last quarter calmed sentiment, with weak euro zone growth sustaining stimulus hopes. European stock index futures pointed to a dip as shares continue to zig-zag while trading volumes drop, with investors moving to the sidelines and waiting for clear moves by central banks before increasing their exposure to equities. U.S. stocks ended little changed on Tuesday in what investors described as a fatigued market after the S&P 500 rose in seven of the past eight sessions. (Reuters)

FOREX: The dollar held firm near a one-month high against the yen, after surprisingly upbeat U.S. retail sales data the previous day dampened talk of monetary stimulus from the Federal Reserve. (Reuters)

FOREX-Dollar hovers near 1-mth high vs yen after upbeat data
SINGAPORE, Aug 15 (Reuters) - The dollar held firm near a one-month high against the yen, after surprisingly upbeat U.S. retail sales data the previous day dampened talk of monetary stimulus from the Federal Reserve.    
"It wouldn't be a surprise to see the dollar rise to 80 yen by the end of the month," said Masafumi Yamamoto, chief FX strategist Japan for Barclays Capital in Tokyo.

U.S. retail sales gain hints at stronger growth(Reuters)
U.S retail sales rose in July for the first time in four months as demand climbed for goods ranging from cars to electronics, a sign that consumers could drive faster economic growth in the third quarter.

Top U.S. farm lender worried by drought, politics(Reuters)
U.S. agriculture has plenty of financial reserves to get through the worst drought in more than 50 years, the top regulator of U.S. farm banks says.

China growth target at risk unless support stepped up-CCIEE
BEIJING, Aug 15 (Reuters) - China must step up pro-growth policies over the next three months or risk missing its annual growth target of 7.5 percent, a senior official at a top government think-tank told Reuters.
Zheng Xinli, vice chairman of China Centre for International Economic Exchanges (CCIEE), said Beijing must boost investment growth, preferably by raising spending on the country's high-speed rail network, to stop a slide in economic growth that has lasted for six straight quarters and is running into a seventh.

GRAINS: U.S. wheat edged up, after suffering its biggest three-day decline since July last year in a selloff triggered by Russia's exports to Egypt in two tenders this week, which eased concerns over supplies from the Black Sea region. (Reuters)

U.S. crude stocks rise unexpectedly, products mixed-API(Reuters)
U.S. crude oil stocks rose last week against analyst expectations, and refined product stocks were mixed, the American Petroleum Institute said on Tuesday.

North Dakota oil output at record high in June(Reuters)
Oil production in North Dakota hit yet another record high in June, after average production in the first half of the year jumped 67 percent higher than a year earlier.

OIL: Brent crude futures slipped below $114 after settling at a three-month high as supply disruption worries eased after the United States said it did not believe Israel had made a decision whether to attack Iran. (Reuters)

Lonmin halts S.Africa platinum output after violence(Reuters)
The world's no. 3 platinum producer Lonmin has been forced to freeze mining at its South African operations after violence between rival unions killed at least nine people.

Chile cuts its 2012 copper output, global price view
SANTIAGO, Aug 14 (Reuters) - Chile, the world's top copper producer, lowered its 2012 average copper price outlook to $3.52 per pound from a previous estimate of $3.85, and sees prices slipping to $3.48 next year.
"The lower copper price (forecast) is chiefly due to downwardly revised GDP growth and industrial production in the main copper consuming countries, as well as lower demand expectations," state copper commission Cochilco said on Tuesday.

Brazil to regain iron ore top spot from Australia in 2017 -Vale
RIO DE JANEIRO, Aug 14 (Reuters) - Brazil will overtake Australia and regain its position as the world's top iron ore exporter in 2017 after a giant new Amazon mine owned by Vale SA starts operations, Vale's investor relations chief said on Tuesday.
The reversal will be sealed by the addition of new mines in Brazil, including Vale's 90 million-tonne-a-year Serra Sul mine at its Carajas complex in Brazil's northern Amazonian state of Para, investor relations director Roberto Castello Branco told investors in Rio de Janeiro.

BASE METALS: London copper edged up, spurred by hopes for more stimulus measures by China after a government think-tank official said the country must crank up pro-growth policies over the next 3 months or risk missing its annual growth target. (Reuters)

PRECIOUS METALS: Gold edged up,after dropping to a 1-1/2-week low in the previous session on promising U.S. retail sales data that dampened hopes for further stimulus measures from the Federal Reserve. (Reuters)

Paulson adds to gold pile for first time since 2009
NEW YORK, Aug 14 (Reuters) - Prominent hedge fund manager John Paulson raised his stake in gold in the second quarter of 2012, boosting investor confidence that bullion prices have more room to rise this year, a U.S. regulatory filing showed on Tuesday.
It was the first time Paulson & Co had increased its position in the SPDR Gold Trust since the first quarter of 2009, when the investment firm initially acquired 31.5 million shares of the world's No. 1 exchange-traded fund.

METALS-LME copper steady after US data; China eyed
SHANGHAI, Aug 15 (Reuters) - London copper edged up, spurred by hopes for more stimulus measures by China after a government think-tank official said the country must crank up pro-growth policies over the next 3 months or risk missing its annual growth target.
"The markets have been directionless, with most traders I know sticking to strict day trading strategies for the past month. We usually take a position earlier in the day and make sure we get out of it by the close," said a Shanghai-based copper trader, referring to the morning rise in LME copper.

PRECIOUS-Gold inches up after taking a hit from US data
SINGAPORE, Aug 15 (Reuters) - Gold edged up, after dropping to a 1-1/2-week low in the previous session on promising U.S. retail sales data that dampened hopes for further stimulus measures from the Federal Reserve.
"The good news for economy is bad news for gold," said Yuichi Ikemizu, head of commodity trading, Japan, Standard Bank, adding that the lack of clarity on monetary policy direction will keep interest in trading gold muted.
"Gold is unlikely to move out of the current range until end of August or even September."

20120815 1116 Global Markets & Commodities Related.

U.S. crude stocks rise unexpectedly, products mixed-API
NEW YORK, Aug 14 (Reuters) - U.S. crude oil stocks rose last week against analyst expectations, and refined product stocks were mixed, the American Petroleum Institute said on Tuesday.
Total U.S. crude inventories rose 2.8 million barrels in the week to Aug. 10, compared with analyst expectations for a 1.7-million-barrel drawdown.  GLOBAL MARKETS-Shares steady, US data lifts mood, stimulus hopes endure
TOKYO, Aug 15 (Reuters) - Asian shares steadied on Wednesday as strong U.S. retail sales and data showing Germany and France avoiding a contraction last quarter bolstered investors' risk appetite, with weak euro zone growth sustaining hopes for more stimulus.
"We think this calm may last a few more days but see scope for volatility to pick up due to important upcoming events," such as the Jackson Hole meeting of central bankers and economists at the end of the month and the U.S. nonfarm payrolls data due early in September, Barclays Capital said in a note.

COMMODITIES-Oil up on supply woes, copper on German/French data
NEW YORK, Aug 14 (Reuters) - Oil and copper rose on Tuesday, underpinned by worries about supply constraints for North Sea Brent crude and better-than-expected data on U.S. retail sales and German and French economic growth.
"I think the strength of the retail sales numbers and a good opening of the stock market is pushing up (oil) demand expectations," said Carl Larry, president of Oil Outlooks LLC in New York.

OIL-Brent ends at 3-month high on US data, stimulus hopes
NEW YORK, Aug 14 (Reuters) - Brent oil futures ended at a fresh three-month high on Tuesday as strong U.S. retail sales, tighter North Sea crude supplies and speculation about economic stimulus outweighed weak euro zone growth data.
"I think the strength of the retail sales numbers and (gains in the) stock market have pushed up (oil) demand expectations," said Carl Larry, president of Oil Outlooks LLC in New York.

U.S. crude stocks rise unexpectedly, products mixed-API
NEW YORK, Aug 14 (Reuters) - U.S. crude oil stocks rose last week against analyst expectations, and refined product stocks were mixed, the American Petroleum Institute said on Tuesday.
Total U.S. crude inventories rose 2.8 million barrels in the week to Aug. 10, compared with analyst expectations for a 1.7-million-barrel drawdown.

NATURAL GAS-U.S. natgas futures end up 4 pct after test of support
NEW YORK, Aug 14 (Reuters) - U.S. natural gas futures ended higher on Tuesday, backed by incremental demand from several unexpected nuclear plant outages  coupled with technical buying and short-covering after an overnight test of chart support held.
"The weather is still as mild as it was yesterday, but there was some stiff support as we neared $2.70. It's the proverbial 'bargain hunter' discussion that comes with a major slide like this," Gelber & Associates analyst Pax Saunders said.

EURO COAL-Steady despite oil rise, Colombia rail strike vote
LONDON, Aug 14 (Reuters) - Physical prompt coal prices were unchanged on Tuesday despite oil's rise close to a three-month high and a vote by striking Colombian rail workers to return to work.
The tonnage lost as a result of the Fenoco strike and a separate dispute at Prodeco's mines may have an impact on prices in two to three months' time when end-users return to the market for Q4 cargoes but at present, there is still more coal available than there are buyers, traders and utilities said.

20120815 0949 Malaysia Corporate Related News.

MRT Corp awards 3 contracts for station packages worth RM563m
MRT Corp has awarded three station packages to TRC, Ahmad Zaki and Apex Communications for the MRT Sungai Buloh-Kajang project with a total value of RM563m. With the announcement, 40 out of a total of 85 tender packages for the MRT project have been awarded. (Malaysian Reserve) Please see accompanying reports.

Astro offers IPO to Bumiputera investors at RM3.60 a share
Astro Malaysia Holdings’ IPO portion set aside for Bumiputera investors through the MITI is priced at RM3.60/share, according to a newswire report. At an indicative price of RM3.60, Astro stands to raise about RM2.15bn from the 597.69m of its shares allocated to Bumiputera investors. The offer to Bumiputera investors was made available in the middle of last week and will close today. (Malaysian Reserve)

Media Prima in early talks with Worldview Broadcasting Channel
Media Prima has commenced preliminary negotiations with Worldview Broadcasting Channel (M) SB (WBC), with the view of taking up a stake in the ailing free-to-air news channel that started test-transmission in December last year. Industry executives said things have not worked out too well for WBC, and the company has been on the lookout for investors for a few months now. (Financial Daily)

New minimum price RM7 for 20 cigarettes from 1 Sept
The minimum price for 20 cigarettes has been set at RM7 from 1 Sept. The new price for all brands and cigarettes can only be sold in packets of 20. Health Minister Datuk Seri Liow Tiong Lai said from 1 Sept, discounting by cigarette companies will not be allowed. Cigarette companies will only be allowed to sell cartons with a minimum of 10 packets of cigarettes. (Financial Daily)

KKB to build RM48m pipeline
KKB Engineering has received a letter of acceptance from the Sarawak government to build a transmission pipeline worth RM48m in Kuching’s Sama Jaya Free Industrial Zone. KKB said the job will last for 24 months and is expected to be completed by 3Q of 2014. (Financial Daily) Please see accompanying report.

Hibiscus proposes acquisition of Aussie assets
Hibiscus Petroleum has proposed to acquire stake in an Australian exploration and development company, which will take a majority stake in an oilfield off the southeast Victorian coastline. It expects the first production of oil from the Australian assets to occur around mid-2014, subject to relevant approvals and the availability of rig and production facilities. (Financial Daily)

The government will look into whether utilities such as Telekom Malaysia and Tenaga Nasional should have to incur additional capex to build infrastructure for new housing projects in order to lower the price of new properties said Minister for Housing and Local Government Datuk Seri Chor Chee Heung. This comes after both the House Buyers Association (HBA) and developers said that the current model of financing infrastructure such as laying of electrical cables and sewage and water pipes in new housing projects unfairly burdens the purchasers. HBA president Chang Kim Loong said the costs of building new properties could be reduced by up to 5% by shifting the cost of building utilities to the respective companies. Real Estate and Housing Developers Association of Malaysia president Datuk Seri Michael Yam said that in developed countries the government would be in charge of doing the masterplanning and building the public infrastructure. (The Malaysian Insider)

Utility companies such as Tenaga Nasional Bhd, Syarikat Bekalan Air Selangor Sdn Bhd and Perbadanan Urus Air Selangor (Puas) must share with property developers the cost of building public infrastructure such as reservoirs, substations and flyovers. National House Buyers Association secretary general Chang Kim Loong said developers have no qualms building the infrastructure if they can share the cost with government agencies. Chang said developers should not be the ones sacrificing their profits. As a result they have no choice but to lumber the cost into the house buyers purchase price. (BT)

Packet One, a unit of Green Packet, aims to add 50,000 business subscribers over the next 24 months with its latest product - P1 ForBiz Fibre targeted at SMEs. P1 CEO said highspeed broadband (HSBB) coverage for business in Malaysia is between 350,000 but only 46,000 are users.(StarBiz)

The government will initiate measures to address various issues gripping the property sector, including curbing rampant speculative activities in the market. Housing and Local Government Minister Datuk Seri Chor Chee Heung said he would present to the cabinet findings of an industry meeting which could be used to come up with innovative ways to build affordable homes. "The government has done fairly well in addressing the housing issues of the lower income. However, 40% of the medium-income society still need accommodation. "My ministry will use some of the findings to improve the sector," Chor told reporters here after opening a roundtable discussion on "Housing Affordability - Issues and Challenges". The government will put forward recommendations, which will be based on proposals made by Real Estate and Housing Developers Association Malaysia (Rehda) such as on how to curb speculative property prices, financing, abandoned projects and sluggish developments. Metro Kajang Holdings Bhd group managing director  Datuk Eddy Chen Lok Loi said for example, a house built in Perlis cost RM250,000 but the same house using the very same materials but built in KLCC would cost RM1m. "This is caused by land cost due to two different locations. Nevertheless, there are some of the issues which Rehda will look into to address this such as materials prices. Working groups and a task force have been set up," said Chen.(BT)

SP Setia Bhd president Tan Sri Liew Kee Sin and Permodalan Nasional Bhd (PNB) are unlikely to be taking up shares in the proposed share placement exercise which the property developer announced on Monday. The share placement exercise comes on the heels of announcements by SP Setia of several major JV projects, of which the most prominent would be the Battersea project in London announced early last month and the Qinzhou Industrial Park in south-west China announced in April.(Starbiz)

Wilmar International Ltd warned of challenges in the near term, especially in China due to excess capacity in oilseed crushing. Chairman and CEO Kuok Khoon Hong said short-term prospects are difficult, even though Wilmar is well positioned to benefit from growth in demand for agricultural commodities, especially in Asia and emerging markets like Africa. (Financial Daily)

Hartalega Holdings Berhad is on track to start construction of its new RM1.5bn facility in Sepang by Dec 2012. In a worse case scenario the company expects to start construction by Mar 2013. The move according to the company will not affect Hartalega’s dividend policy (45% payout of net profit) and will help the company stay ahead of its peer group due to cost efficiencies. Capex for the project is expected to be RM300-400m annually for the first three years of construction. The company says this will be funded internally. (Financial Daily)

Hartalega's first production line at its sixth plant will start operations in September this year. The glove manufacturer said that all 10 production lines at the sixth plant were expected to be completed in June 2013. Hartalega expected full contribution from the 10 lines to be in the financial year ending March 31, 2015. (StarBiz)

Supermax Corp Bhd aims to gain ground in new product markets with the construction of its new national distribution headquarters located in Chicago, Illinois. The first phase will cost US$6.25m and will consist of a building to suit 90,170 sq ft warehouse and distribution facility as well as a 6,000 sq ft office for the company’s operations. The facility will be completed by 2Q13 and will consolidate the company’s US distribution units. (Malaysian Reserve)

WCT Bhd expects to start work on its RM4bn mixed development project on an strategically-located site in the vicinity of Kuala Lumpur in 2014. Deputy MD Goh Chin Liong said the project would be done phase by phase over a period of 10 years. “Development will go in tandem with the market outlook,” he said after the company's EGM. The project will mark the company's first development foray in Kuala Lumpur after having completed several projects in the Klang Valley, including its flagship township Bandar Bukit Tinggi in Klang. At the EGM, shareholders approved the company's RM450m acquisition of the said land in the Overseas Union Garden (OUG) area. (Starbiz)

Multi-Purpose Holdings Bhd's (MPHB) indirect subsidiary Magnum Corporation Sdn Bhd has proposed to undertake a medium-term notes programme of up to RM1bn. It said the tenure for the programme would be 20 years and the proceeds from the first issuance would be used to refinance Magnum's current borrowings and or its holding company Magnum Holdings Sdn Bhd. There were also plans to use the funds to finance working capital requirements and future investments. (StarBiz)

MMC Corp Bhd has appointed CIMB Investment Bank and Maybank Investment Bank Bhd as lead managers for the proposed initial public offering of its unit Malakoff Corp Bhd. Credit Suisse and J.P. Morgan have also been appointed as global co-coordinators of the proposed IPO, which is due to be launched in the 1Q13 and is expected to raise over US$1bn. (Reuters)

RGB International Bhd plans to undertake an unrated commercial papers/medium term notes programme of up to RM77m in nominal value to refinance the outstanding RM76m. It said on Tuesday the proceeds from the proposed seven-year programme would be used to refinance the outstanding RM76m from its existing CP/MTN programme of RM97m from existing noteholders. RGB added the proposed CP/MTN programme was expected to be implemented by 4Q12. (Starbiz)

Borneo Aqua Harvest Bhd’s unit Plentiful Harvest Sdn Bhd has been granted RM24.8m in financial incentive by the Ministry of Agriculture and Agro-Based Industry. The company said the grant is to implement and complete the agro-based project identified by the government. (BT)

The shares of Stemlife, which is listed on the ACE Market, will be suspended from trading today pending a announcement on a corporate exercise involving a substantial transaction. (BT)

MAS: Suffers net losses of RM349.2m in Q2 due to drop in revenue
Malaysia Airlines (MAS) continued to be in the red for the sixth quarter, with net losses of RM349.3m in the 2QFY2012, though the losses had narrowed compared with RM526.7m a year ago. Its revenue fell 5.1% to RM3.3bn from RM3.5bn a year ago following the Route Rationalisation programme in late 2011 and early 2012 to cut several loss making and low yielding routes. Loss per share was 10.45 sen compared with 15.76 sen. MAS said it had managed to reduce operating loss to RM102m compared with RM443m a year ago. (StarBiz)

Top Glove: Swap land with New Hoong Fatt Holdings
Top Glove and New Hoong Fatt Holdings (NHF) have agreed to swap land worth RM10m with each other. NHF said both parties decided to swap the land due to their locations. Top Glove’s land is located behind NHF’s existing warehouse while NHF’s parcel is located behind Top Glove’s existing factories in Meru, Klang. (Financial Daily)

Deleum: Unit to buy 60% stake in NPSB
Deleum’s wholly-owned subsidiary, Deleum Services Sdn Bhd, has proposed to acquire a 60% stake, or 594,000 shares, in Northern Primera Sdn Bhd (NPSB) for a total cash consideration of RM3.18m. In a statement to Bursa Malaysia, Deleum said the proposed acquisition, which was expected to be completed by 3Q 2012, was expected to generate an additional revenue stream for the group through the existing business of NPSB, which is involved in providing services in integrated corrosion, inspection and mitigation, primarily using Sponge-Jet products. At present, NPSB is the sole distributor of certain Sponge-Jet products in Malaysia and Indonesia. (StarBiz)

20120815 0948 Local & Global Economy Related News.

The leading index (LI) declined by 0.1% mom in Jun (+0.3% mom in May). The coincident index (CI) dropped by 0.8% mom in Jun (+0.2% mom in May) while the lagging index contracted 0.3% mom (-0.8% mom in May). The diffusion index for both LI and CI suggested that the Malaysian economy should continue to expand at a moderate pace in the months ahead. (Department of Statistics)

The US producer price index rose 0.3% mom in Jul (a revised 0.1% in Jun), overshooting consensus of 0.2%, whilst on a yoy basis, the gauge gained 0.5% (0.8% in Jun). (Bloomberg)

US retail sales gained 0.8% mom in Jul, reversing a revised -0.7% in Jun and almost three times the consensus of 0.3%. Retail sales less autos and gas increased by 0.9% mom (a revised -0.4% in Jun), almost double the 0.5% expected by economists. (Bloomberg)

US business inventories gained 0.1% mom in Jun (0.3% in May), undershooting consensus of 0.2%. (Bloomberg)

The US ICSC-Goldman store sales index gained 3.6% yoy in the 11 Aug week (1.4% in the earlier week), whilst on a wow basis, the measure fell 0.3% (no change in the prior week). (Bloomberg)

The US NFIB Small Business Optimism Index slipped to 91.2 in Jul from 91.4 in Jun, but still higher than the average of 90 during the recovery. Economists were expecting a smaller decline at 91.3. (Bloomberg)

US agriculture has plenty of financial reserves to get through the worst drought in more than 50 years, the top regulator of US farm banks Farm Credit Administration says. (Reuters)

Eurozone industrial production fell 2.1% yoy in Jun, moderating from the 2.6% fall in May. (Bloomberg)

The Eurozone ZEW survey of economic sentiment, which has been declining for the last three consecutive months, improved slightly in Aug to -21.2 pts from -22.3 pts registered in Jul. (Bloomberg)

Eurozone’s GDP fell 0.2% qoq in 2Q12, in line with economists’ expectations after stagnating in 1Q12. (Bloomberg)

Germany: Growth slows less than forecast
The German economies slowed less than forecast in the second quarter, fending off a debt crisis that has dragged at least six of their euro-area neighbours into recessions. In Germany, GDP rose 0.3% from the first quarter, when it gained 0.5%, the Federal Statistics Office said. Economists predicted a 0.2% increase, according to the median of 40 estimates in a Bloomberg News survey. (Bloomberg)

EU: Hungary joins Czechs in recession on budget cuts, Euro woes
The Czech economy extended its decline and Hungary returned to a recession in the second quarter as government budget cuts sapped domestic demand and the euro-area crisis weakened exports. The Czech and Hungarian economies (the second- and third- largest among post-communist European Union members) each contracted 0.2% from the first three months of the year, according to preliminary data released by statistics offices today. GDP declined 1.2% from a year earlier in both countries. (Bloomberg)

China's refined copper production in July declined 6.8% mom but rose 0.8% yoy to 483,000 tons. (People's Daily)

China: Reluctance on reserve-ratio cut signals inflation concern
China’s slower-than-forecast cuts in banks’ reserve requirements show authorities are reluctant to shake their concern that inflation will quicken, three months after Premier Wen Jiabao shifted priorities to boosting growth. China has left the reserve ratio for its biggest banks at 20% since mid-May, while lowering interest rates in June and July. Industrial production and loan data for July missed estimates last week, further fuelling speculation that the People’s Bank of China would cut the ratio as soon as 10 Aug. (Bloomberg)

Land authorities in China have already started to cut land supplies in an effort to adjust the housing market, from 172,600 hectares planned at the beginning of this year to 159,300 hectares. (China Daily)

Japan’s tertiary industry index grew by 0.1% mom in Jun (0.7% in May), beating forecasts for a 0.3% contraction. (RTTNews)

India's inflation slowed unexpectedly in July to 6.87% yoy (7.25% in Jun), significantly below the median forecast of 7.4%. (CNA)

India has granted a US$500m loan to Myanmar, part of which will be used to finance construction of a 3,200-km trilateral highway linking India, Myanmar and Thailand. The route, which is expected to be completed in 2016, will run from India's northeastern states into Myanmar. (CNA)

India's trade deficit widened to US$15.5bn in July, compared with US$14.8bn a year earlier. Exports recorded their sharpest fall since Nov 2011, shrinking 14.8% yoy to US$22.4bn amid low demand from Europe and the US Imports slid as well—but at a slower pace of 7.6%—to US$37.9bn. (WSJ)

Petroleum importers in Vietnam raised retail fuel prices by VND1,100 (US$ 0.05) per litre starting from 5pm yesterday afternoon. (Vietnam News)

The opening of the World Bank Group and the Asian Development Bank (ADB) offices in Yangon has paved the way for Myanmar to regain access to financing from official development banks and foreign governments, Moody's Investors Service said. It added that the offices add credit positive to Myanmar, which has not been given any ratings yet. (The Nation)

20120815 0937 Global Markets Related News.

Asia FX By Cornelius Luca - Tue 14 Aug 2012 17:07:23 CT (
The appetite for risk dwindled later on Tuesday because better than expected economic data in the US and Germany was countered by ongoing concern about the sustainability of the global economy. The European currencies made little progress on Tuesday, while the yen fell. The US stock indexes consolidated. The gold/oil ratio fell. The short-term outlook for the European and commodity currencies is sideways. The medium-term outlook for most of the foreign currencies is sideways. The LGR short-term model is short only the yen.  Good luck!

US: Retail sales rose 0.8% in July, but the June retail sales figures were revised down to -0.7% from -0.5%.
US: PPI rose by 0.3% in July following a 0.1% increase in June. The core PPI rose by 0.4% in July after edging up by 0.2% in each of the two previous months.US: Business inventories edged up a 0.1% in June, down +0.3% in May. Business sales sank 1.1% for June.

Today's economic calendar
Australia: Westpac Consumer Confidence for August
Australia: Wage Price Index for the second quarter

Most Asian Stocks Rise on U.S. Retail, German GDP Reports (Source: Bloomberg)
Most Asian stocks gained after U.S. retail sales and German gross domestic product rose more than forecast, boosting the outlook for exporters. Toyota Motor Corp. (7203), Asia’s biggest carmaker by market value, rose 0.8 percent in Tokyo. Alacer Gold Corp. (ASR) slumped 7 percent in Sydney after the miner cut a production forecast. Anhui Conch Cement Co. may be active today in Hong Kong after profit fell at China’s biggest cement company. The MSCI Asia Pacific Index (MXAP) rose less than 0.1 percent to 120.41 as of 9:19 a.m. in Tokyo. About four stocks gained for every three that fell before the open of markets in Hong Kong and China. Asia’s benchmark index fell 6.7 percent from this year’s high on Feb. 29 through yesterday amid concern Europe’s debt crisis will worsen and China’s economy is slowing. The gauge traded at 12.4 times estimated earnings compared with 13.6 for the Standard & Poor’s 500 Index and 11.6 for the Stoxx Europe 600 Index, according to data compiled by Bloomberg.
The Nikkei 225 Stock Average gained 0.2 percent, and Australia’s S&P/ASX 200 Index (AS51) climbed 0.3 percent. South Korea’s markets are closed for a holiday today.

Japanese Stocks Advance on U.S. Retail Sales, German GDP (Source: Bloomberg)
Japanese stocks gained, with the Topix Index heading for a three-day advance, after U.S. retail sales and German gross domestic product rose more than estimated, boosting the outlook for exporters. Brother Industries Ltd., a maker of office equipment that gets half its sales in the U.S. and Europe, climbed 1.2 percent. Toyota Motor Corp., Asia’s biggest auto manufacturer, climbed 1 percent after the Nikkei newspaper reported Japan will offer subsidies for ultra-compact cars. Sharp Corp., the nation’s biggest liquid-crystal panel maker, sank 4.2 percent after trimming its sales forecast and having its equity rating cut to sell by Deutsche Bank. The U.S. economic data “would temporarily weaken the expectations for additional easing and is alleviating concerns of the yen’s strength against the dollar, which is a good factor for exporters,” said Hiroichi Nishi, an equities manager in Tokyo at SMBC Nikko Securities Inc.
The Nikkei 225 Stock Average (NKY) gained 0.2 percent to 8,950.14 as of 9:15 a.m. in Tokyo. Volume on the gauge was 5.6 percent below the 30-day average with many traders off for O-bon holidays this week. The broader Topix rose 0.1 percent to 750.24, with about seven shares advancing for every six that fell.

S&P 500 Erases Early Gain as Tech, Financial Shares Slump (Source: Bloomberg)
U.S. stocks erased gains, sending the Standard & Poor’s 500 Index lower for a second day, as a slump in technology and financial shares reversed an earlier rally amid better-than-estimated retail sales. Hewlett-Packard Co. (HPQ) and Cisco Systems Inc. (CSCO) posted the biggest declines in the Dow Jones Industrial Average. The S&P 500 Financials Index slipped 0.1 percent after earlier rising as much as 0.7 percent. Alcoa Inc. (AA) retreated 1.6 percent, pacing losses among commodity stocks. Home Depot Inc. (HD) increased 3.6 percent after quarterly earnings topped analysts’ estimates. The S&P 500 dropped less than 0.1 percent to 1,403.93 at 4 p.m. in New York, after earlier rising as much as 0.4 percent. The Dow added 2.71 points, or less than 0.1 percent, to 13,172.14. Volume for exchange-listed stocks in the U.S. was about 5.2 billion shares today, 20 percent below the three-month average, according to data compiled by Bloomberg.
“The light volume demonstrates there’s just little conviction right now,” Peter Tuz, who helps manage about $800 million as president of Chase Investment Counsel Corp. in Charlottesville, Virginia, said in a telephone interview. “It is a symptomatic of the fact that people are just not that interested in the equity market.”

Stock Trading in U.S. Falls to Lowest Level Since 2008 (Source: Bloomberg)
U.S. equity volume reached the lowest level since at least 2008 excluding holidays and volatility slid to a five-year low as vacationing traders awaited policy clues from the Federal Reserve’s summit in Jackson Hole, Wyoming. About 4.5 billion shares changed hands on all venues, the lowest level in data compiled by Bloomberg going back four years that excludes the days surrounding New Year’s, Christmas, Thanksgiving and Independence Day. The Chicago Board Options Exchange Volatility Index, known as the VIX (VIX), lost 7.1 percent to 13.70, the lowest level since June 2007. U.S. equity volume has fallen as investors speculated on whether the European Central Bank will start buying bonds to lower borrowing costs and if the Fed will take steps to deliver more stimulus. The VIX, which tracks the cost of protecting against a drop in U.S. stocks, has slumped as Standard & Poor’s 500 Index (SPX) reached the highest level since April last week.
“We’re getting to a point where everybody is going to be on hold waiting for some action out of the ECB and the Fed,” Bruce McCain, who helps oversee more than $20 billion as chief investment strategist at the private-banking unit of KeyCorp in Cleveland, said in a telephone interview. “At this time of the year, there are fewer people in the office.” Daily volume on U.S. equity exchanges has averaged 6.67 billion this year, 15 percent less than the average from last year, according to data compiled by Bloomberg. That compares with 8.5 billion in 2010.

Recap Stock Index Market Report (Source:CME)
The September S&P 500 trended higher during the initial morning hours, climbing to their highest level since April 2nd. The upside action in the stock market was fueled by German GDP data that was slightly better than expected, then from US July Retail Sales that beat consensus estimates. There were also a number of US retail-related companies that posted upbeat quarterly results earlier this morning, and that seemed to support the notion of a healthy consumer. The index struggled to hold into positive territory during the afternoon session and posted new lows into the close. Most of the major S&P sectors were lower on the session, with material-related shares as the downside leader.

European Stocks Rise on German GDP Report (Source: Bloomberg)
European stocks gained, rebounding from a two-day decline, as a report showed German growth slowed less than forecast, while minutes revealed that several Bank of Japan policy makers are prepared to stimulate the economy. Standard Life Plc (SL/) rallied 8.1 percent as first-half profit at Scotland’s biggest insurer rose 15 percent. A.P. Moeller- Maersk A/S advanced 3.2 percent after increasing the full-year forecast for its container-shipping unit. CRH Plc (CRH) plunged 4.8 percent after saying a European sales decline will worsen. The Stoxx Europe 600 Index (SXXP) gained 0.7 percent to 270.54 at the close. The gauge has rallied 16 percent from this year’s low on June 4 as European Central Bank President Mario Draghi said that he will do anything to protect the 17-nation currency.
“While not great in any way, German and French GDP numbers were better than expected, which adds to the scenario that there is no risk of an imminent euro break up,” said Alexander Kraemer, a cross-asset strategist at Commerzbank AG in Frankfurt. “It shows global growth is not collapsing, which also helps reduce investment risks.”

China Bear Market Lures Record Foreign Bids as Locals Pull Funds (Source: Bloomberg)
International money managers are lining up to buy stocks in mainland China at a record pace, even as a third year of equity losses spurs local investors to empty trading accounts like never before. While overseas firms were granted $6.9 billion of quotas to purchase mainland securities since December, more than in any full year since the government program began, the number of Chinese stock accounts containing funds dropped by 788,000 to 56.3 million in the year to Aug. 3, the most for a 12-month period. A record 110 million are empty or frozen, according to regulatory data compiled by Bloomberg. Foreign funds from Taiwan Life Insurance Co. to Shinhan BNP Paribas Asset Management Co. say the 54 percent discount for companies in the Shanghai Composite Index to their 10-year average, and the lowest valuations relative to MSCI Inc.’s developing-nations measure make China shares irresistible.
Local individuals, companies and institutions, which hold about 99 percent of mainland shares, are turning more bearish as the world’s second-largest economy slows. “The value story is clearly emerging in China,” Kim Jun Sung, the chief investment officer for equities at Samsung Asset Management Co., which oversees about $100 billion and received a $150 million quota to buy mainland securities in 2010, said in an Aug. 7 interview in Seoul. “The economic outlook continues to be negative so the catalyst for growth is not yet there.”

Recap Interest Rate Market Report (Source:CME)
September 30-Year Bonds traded lower throughout the session, making an exact test of last week's low of 147-10. Treasury markets were on the defensive following GDP data from France and Germany that came in slightly better than expected. Bonds broke down to their low of the session in response to US Retail Sales data that came in stronger than expected. July Producer Prices jumped at their fastest clip in five months, and that might have put further pressure on prices. Some traders indicated that the push higher in yields during the session came on diminished prospects for the Fed to take policy action at their September meeting.

U.S. 10-Year Yield Highest Since May After Retail-Sales Gain (Source: Bloomberg)
Treasuries fell after U.S. retail sales rose for the first time in four months in July and exceeded forecasts, damping demand for the safety of U.S. government debt. Benchmark 10-year note yields reached the highest level since May as the consumer-spending data and the Aug. 3 report of stronger-than-forecast jobs gains reduced speculation the Federal Reserve will add to its monetary stimulus. U.S. debt fell earlier after the German economy expanded in the second quarter at a faster pace than analysts forecast and the French economy unexpectedly avoided a contraction. “Today’s data, combined with the employment report, makes it harder for the Fed to do another round of quantitative easing,” said Gary Pollack, who manages $12 billion as head of fixed-income trading at Deutsche Bank AG’s Private Wealth Management unit in New York. With the Fed buying so much long- term debt “yields are much lower than they should be.”
The benchmark 10-year yield rose eight basis points, or 0.08 percentage point, to 1.74 percent at 5 p.m. in New York, according to Bloomberg Bond Trader prices. The 1.625 percent note due in August 2022 fell 21/32, or $6.56 per $1,000 face amount, to 98 31/32. The yield is the highest since May 29.

Dollar Near One-Month High Versus Yen Before U.S. Data (Source: Bloomberg)
The dollar was 0.2 percent from an almost one-month high against the yen before data today that may add to signs of economic recovery in the U.S., curbing chances for expanded monetary easing from the Federal Reserve. The greenback held gains versus most of major peers ahead of reports forecast to show improvements in the manufacturing sector of the world’s biggest economy. Demand for the euro was limited after figures yesterday showed gross domestic product contracted in the 17-nation region. “The U.S. economy is growing slowly, and I view that as a positive,” said Hans Kunnen, chief economist at St. George Bank Ltd. in Sydney. The expansion is “at a sufficient pace for the Fed to hold fire. This lends support to the dollar.” The dollar bought 78.80 yen at 8:37 a.m. in Tokyo. It touched 78.93 yesterday, the strongest since July 18. The U.S. currency was unchanged at $1.2322 per euro. Europe’s shared currency traded at 97.11 yen from 97.02.
Industrial production in the U.S. probably rose 0.5 percent last month after a 0.4 percent gain in June, according to the median economist forecast compiled by Bloomberg News before today’s data. The New York Fed’s general economic index was probably at 7 in August, according to a separate survey. Readings greater than zero signal expansion in the region and the last negative reading was in October.

FOREX REPORT- Euro dips after German ZEW, euro zone GDP data (Reuters)
The euro dipped against the dollar after the German ZEW economic sentiment survey came in worse than expected while the euro zone economy contracted by 0.2 percent during the second quarter.

Retail Sales in U.S. Jumped More Than Forecast: Economy (Source: Bloomberg)
Retail sales in the U.S. rose more than forecast in July, reflecting broad-based gains that ease concern elevated unemployment will cause consumers to retrench. The 0.8 percent advance, the biggest since February and first gain in four months, followed a 0.7 percent decrease in June, Commerce Department figures showed today in Washington. Economists projected a 0.3 percent rise, according to the median forecast in a Bloomberg survey. Purchases climbed in all 13 categories, the first time that’s happened since 2005. Improved sales at merchants such as Gap Inc. (GPS) and TJX Cos. (TJX) indicate American households are looking beyond the global economic slowdown as hiring improves. At the same time, joblessness in excess of 8 percent is keeping consumer spending from surging, consistent with the Federal Reserve’s view that economic growth will “remain moderate over coming quarters.”
“The consumer hasn’t exactly thrown in the towel, which is encouraging because they’ve been battered and bruised in recent months with very slow job growth,” said Millan Mulraine, senior U.S. strategist at TD Securities Inc. in New York. “We’re off to good a start in the third quarter. I do question the sustainability of the current level of spending. It can only be sustained if employment growth accelerates beyond July.”

Romney-Ryan See Fed QE as Inflation Risk Amid Low Prices (Source: Bloomberg)
Representative Paul Ryan, writing less than a month after the Federal Reserve announced a new round of bond-buying in 2010, said the move to purchase another $600 billion in securities risked stoking inflation and pushing down the dollar. Since that prediction by Ryan, who has been chosen by presumptive Republican presidential nominee Mitt Romney to be his running mate, the dollar has risen against major currencies and inflation has stayed below the Fed’s goal of 2 percent. While off target so far, the warning by Ryan parallels Romney’s criticism of the unprecedented Fed program known as quantitative easing to spur growth by purchasing a total of $2.3 trillion in securities. Romney and Ryan oppose the policy even as Chairman Ben S. Bernanke says he stands ready to provide more accommodation if necessary to achieve a steady decline in the 8.3 percent U.S. unemployment rate.
A Fed led by a Romney-Ryan administration appointee “would be less inclined to frequently fiddle with the knobs” of economic policy, said Stephen Stanley, chief economist for Pierpont Securities LLC in Stamford, Connecticut. “There would be a strong sense in the markets that a different strategy is probably forthcoming,” with higher odds the Fed would raise interest rates and a lower probability it would buy more bonds.

California Sells $2.3 Billion in Notes to Raise Cash (Source: Bloomberg)
Individual investors bought almost a quarter of $10 billion in notes offered by California at yields of as much as 0.55 percent in the state’s largest short-term borrowing in two years, according to state Treasurer Bill Lockyer’s office. While individuals scooped up 23 percent of the issue, that’s less than half the 57 percent sold on the first day of the state’s last such sale. That $5.4 billion offering in September carried yields of 0.38 percent to 0.4 percent. The revenue-anticipation notes sold today offer yields ranging from 0.3 percent to 0.4 percent for those coming due in May and 0.4 percent to 0.55 percent for June maturities, according to a pricing memo e-mailed by Tom Dresslar, a Lockyer spokesman. The range is almost 12 basis points to about 37 basis points higher than yesterday’s 0.18 percent yield on benchmark AAA one-year tax-exempt debt, according to data compiled by Bloomberg. A basis point is 0.01 percentage point.
Borrowing costs for the most-populous U.S. state have declined as Governor Jerry Brown, a Democrat, has taken measures to curb borrowing and reduce the state’s reliance on fiscal maneuvers such as internal loans and delaying payments owed to schools and local governments. Both Standard & Poor’s and Moody’s Investors Service gave the notes top ratings.

China Reluctance on Reserve Cut Signals Inflation Concern (Source: Bloomberg)
China’s slower-than-forecast cuts in banks’ reserve requirements show authorities are reluctant to shake their concern inflation will quicken, three months after Premier Wen Jiabao shifted priorities to boosting growth. China has left the reserve ratio for the biggest banks at 20 percent since mid-May while lowering interest rates in June and July, bucking forecasts from HSBC Holdings Plc and Societe Generale SA that the government would build on three ratio reductions since Nov. 30. Industrial-production and loan data for July that missed estimates last week fueled further speculation the People’s Bank of China would cut the ratio as soon as Aug. 10. The hesitation risks increasing the odds that growth will decelerate for a seventh quarter just as Communist Party leaders gather for a once-a-decade power handover. The PBOC said this month that price gains may rebound after August and a newspaper published by the institution said more reserve-ratio cuts would backfire by increasing inflation expectations.
“The central bank is still concerned about a rebound in inflation, and it is reluctant to loosen too much on the liquidity side,” said Xu Gao, an economist with Everbright Securities Co. in Beijing who previously worked for the World Bank. “The key problem now is that banks have money but the money can’t be channeled to the real economy.”

China ‘Golden Years’ Are Gone as Growth Slows, Vale Says (Source: Bloomberg)
China’s “golden years” are gone as economic growth at the world’s second-biggest economy slows, said an official at Vale SA (VALE5), the top iron-ore producer. Vale, which shipped about 44 percent of its iron ore and pellets to Chinese steelmakers in the second quarter, expects the country to start to recover by the end of the year, said Roberto Castello Branco, the Rio de Janeiro-based company’s director of investor relations. Vale sees some “early signals” of recovery, which are still “very weak,” he said. “We are not going to see the spectacular growth rates of 10, 12 percent per year,” Castello Branco said at the Bloomberg Brazil Economic Summit in Rio today. “The golden years are gone.”
Iron-ore prices dropped to the lowest since Dec. 2009 yesterday on slower growth in China, the biggest user of the steelmaking ingredient, and a weaker outlook for the global economy. Vale said on July 25 that second-quarter profit plummeted 59 percent, missing analysts’ estimates for the fourth time in the past five quarters, after prices for minerals and metals declined. Chinese policy makers cut their expansion target to 7.5 percent from the 8 percent goal in place since 2005, Premier Wen Jiabao said on March 5. Wen, 69, is trying to reduce China’s reliance on exports and boost consumption as he hands power to a younger generation of leaders this year. The economy grew 7.6 percent in the second quarter, the slowest pace since 2009.

Hamburg Harbor Hurt as Europe Debt Crisis Hits China (Source: Bloomberg)
Growth in Hamburg is stalling as Europe’s fiscal crisis spreads into China and Russia, threatening the recovery of Germany’s biggest port. Hamburger Hafen und Logistik AG, which handles two thirds of containers in Hamburg, cut its forecast for 2012 on July 25, saying it now sees container throughput at the same level as last year, compared with an earlier 5 percent growth estimate. Such an increase would have led to volumes exceeding the record 7.3 million standard containers handled in 2008, the year before the global financial slump prompted a 33 percent drop. “The port of Hamburg’s Asian exposure is close to 60 percent, and obviously the euro crisis is now having an impact on the Asia-Europe trade line,” said Christian Cohrs, an analyst at M.M. Warburg & Co. KGaA in Hamburg, who has a sell recommendation on shares of Hamburger Hafen, also known as HHLA.
“With throughput growth of almost 5 percent in the first quarter and 1.5 percent in the second quarter, the guidance cut assumes nearly a 3 percent decline in volumes in the second half of this year.” Germany, Europe’s largest economy, is cooling as the euro area, its biggest export market, heads toward recession. Hamburg’s port, on which 275,000 people rely for jobs, largely had been shielded from Europe’s fiscal woes because of expanding trade with China and the countries around the Baltic Sea. Now these nations are feeling the impact of the debt crisis, and container-volume growth in Hamburg has slowed for six consecutive quarters.

German Growth Slowed Less Than Forecast in Second Quarter (Source: Bloomberg)
The German and French economies slowed less than forecast in the second quarter, fending off a debt crisis that has dragged at least six of their euro-area neighbors into recession. In Germany, gross domestic product rose 0.3 percent from the first quarter, when it gained 0.5 percent, the Federal Statistics Office in Wiesbaden said today. Economists predicted a 0.2 percent increase, according to the median of 40 estimates in a Bloomberg News survey. French GDP was unchanged in the quarter, better than the 0.1 percent decline economists had predicted. While the euro region’s two largest economies defied the debt crisis in the first half of the year, the worsening turmoil is starting to take its toll by eroding demand for their exports. Italy and Spain are in recession and euro-area GDP dropped 0.2 percent in the three months through June, the European Union’s statistics office in Luxembourg said today.
“For Germany, the outlook remains pretty robust,” said Christian Schulz, an economist at Berenberg Bank in London. “For France, the outlook is less rosy as a number of the components that have prevented it from contracting will be hit by austerity measures, plus the country is losing competitiveness.”

Hungary Joins Czechs in Recession on Budget Cuts, Crisis (Source: Bloomberg)
The Czech economy extended its decline and Hungary returned to a recession in the second quarter as government budget cuts sapped domestic demand and the euro-area crisis weakened exports. The Czech and Hungarian economies, the second- and third- largest among post-communist European Union members, each contracted 0.2 percent from the first three months of the year, according to preliminary data released by statistics offices in Prague and Budapest today. Gross domestic product declined 1.2 percent from a year earlier in both countries. The worsening economic performance is adding to the governments’ financial strains as they struggle to curb budget deficits with measures including tax increases, which depress consumer spending. Exports from factories including Skoda Auto AS, Daimler AG (DAI) and Audi AG (NSU) continue to support the Czech and Hungarian economies, even as the manufacturers face weakening demand from their main markets in the 17-nation euro area.
“For now, the drop in output in both countries seems to have been driven as much by domestic austerity as by weaker export demand from Europe,” Neil Shearing, chief emerging- markets economist at Capital Economics Ltd. in London, said in an e-mail. “But with external headwinds likely to build over the second half of this year and into 2013, the growth prospects for the entire region are pretty grim.”

Euro-Area Economic Output Contracted on Spain: Economy (Source: Bloomberg)
The euro-area economy shrank in the second quarter after the worsening debt crisis and tougher budget cuts forced at least six nations into recessions. Gross domestic product in the 17-nation currency bloc fell 0.2 percent from the first quarter, when it stagnated, the European Union’s statistics office in Luxembourg said today. That’s in line with the median estimate of 35 economists in a Bloomberg survey. The contraction was softened by stronger-than- forecast growth in Germany, the region’s largest economy. Europe’s slump is deepening as governments struggle to restore investor confidence and companies eliminate jobs. While Germany’s economy helped to support the euro region in the first half, surveys are weakening, with a gauge of investor confidence dropping in August. The Bank of Japan (8301) today cited the euro turmoil among risks to its economy.
“The ongoing recession in large parts of the periphery will continue to hold back euro-zone growth,” said Martin Van Vliet, an economist at ING Bank in Amsterdam. “Any recovery will likely remain sluggish and fragile. There are a lot of things that could go wrong on the crisis resolution that could derail the envisaged recovery.”

Euro zone economy shrinks despite German growth(Reuters)
The euro zone's debt-ravaged economy shrank in the second quarter, having flatlined in the first, despite continued German growth which economists said could soon be snuffed out.

20120815 0937 Global Commodities Related News.

Australia says signs El Nino weather pattern forming(Reuters)
Australia's weather bureau said there were clear signs El Nino was developing in the eastern Pacific, raising concerns over the potential impact of the weather event on agriculture at time of soaring global food prices.

GRAINS: Chicago new-crop soybeans were little changed after previous session's losses as an improved weather outlook for the U.S. Midwest weighed on prices, while corn rose half a percent on supply worries. Wheat ticked up, after sliding 6 percent in the last two sessions to a near three-week low as fears of shortfalls in key global exporting regions eased.(Reuters)

DTN Closing Grain Comments 08/14 14:53 : Grains Drift Lower Tuesday(Source:CME)
It was a quiet day to say the least in grains with contracts locked in narrow ranges. Contracts closed mostly lower with wheat sustaining the largest decline on continued noncommercial long-liquidation.

Crop forecaster sees 20-30 pct yield drop in Urals, Siberia(Reuters)
Drought is expected to reduce grain yields in the 2012/13 crop year by 20-30 percent in Siberia and the Urals, the last of Russia's grain producing regions to start their harvest, the state crop weather forecaster said on Monday.

Wheat Climbs on Demand for U.S. Supplies; Corn, Soy Gain (Source: Bloomberg)
Wheat futures capped the biggest three-session slump in 14 months on signs that this year’s drought-fueled rally is eroding demand for grain from the U.S., the world’s largest exporter. Corn and soybeans declined. Egypt, the largest wheat importer, said today it bought 60,000 metric tons from Russia at $313 a ton and an equal amount from Ukraine at $313.88 a ton. Cargill Inc. had offered to sell U.S. supplies for $344.53 a ton, according to two traders with direct knowledge of the tender. Wheat futures rose as much as 51 percent since mid-June as drought damaged crops. “U.S. wheat is not competitive on the world markets,” Roy Huckabay, an executive vice president for the Linn Group in Chicago, said in a telephone interview. “Wheat’s premium to corn will also slow demand from domestic livestock producers.”
Wheat futures for December delivery slumped 2 percent to close at $8.5825 a bushel at 2 p.m. on the Chicago Board of Trade. The most-active contract dropped 7.4 percent since Aug. 9, the biggest three-session slide since June 2011. Wheat is a substitute for corn in animal-feed rations. The grain also fell because rain may improve conditions for crops in Australia, Argentina and parts of the southern U.S. Great Plains, Huckabay said. Above-average moisture may fall in parts of Nebraska, Kansas and Missouri from Aug. 19 to Aug. 23, boosting soil moisture for planting winter-wheat crops, Commodity Weather Group LLC said in a report today. Corn futures for delivery in December fell 0.4 percent to $7.89 a bushel in Chicago, capping a three-day drop of 4.2 percent. The most-active contract reached a record $8.49 on Aug. 10, after the government said the worst U.S. drought since 1956 reduced yields to the lowest since 1995.
Soybean futures for July delivery slid 0.2 percent to $15.98 a bushel on the CBOT. The price touched a record $16.915 on July 23. Corn is the most valuable U.S. crop, followed by soybeans, hay and wheat, USDA data show.

Wheat Market Recap Report (Source:CME)
September Wheat finished down 17 at 839 3/4, 26 1/4 off the high and 1 1/2 up from the low. December Wheat closed down 17 1/2 at 858 1/4. This was 1 up from the low and 26 1/4 off the high. September Chicago wheat traded sharply lower for the 3rd straight session after it was reported that Egypt bought another round of Russian and Ukrainian wheat in their second tender this week. Kansas City and Minneapolis wheat traded lower as well. Algeria, another major wheat importer, has also tendered for 50,000 tonnes of milling wheat. International importers continue to tender for wheat through October as the market becomes concerned with rising coarse grain prices going forward and the potential for lower export volume out of the Black Sea in 2013. Wheat shook off midday support from the corn market after technical selling took wheat near session lows. Recent rainfall in the Black Sea, Southwestern Australia, and the Western Midwest also pressured wheat as dry soil conditions saw marginal relief which should benefit wheat planting for next year's crop. Outside markets offered no support today with the US Dollar trading weaker early in the session and crude oil trading stronger on the day. September Oats closed down 3 3/4 at 368 1/2. This was 1 1/2 up from the low and 5 off the high.

Pro Farmer: After the Bell Wheat Recap(Source:CME)
Wheat futures softened as the day progressed, which resulted in Chicago and Kansas City wheat ending with losses mostly in the mid- to upper-teens. Minneapolis wheat closed with slightly lighter losses. Futures enjoyed gains early this morning, but as the corn market came under pressure, so too did wheat.

Corn Market Recap for 8/14/2012 (Source:CME)
September Corn finished down 3 at 779 3/4, 10 3/4 off the high and 2 up from the low. December Corn closed down 3 1/4 at 789. This was 2 1/2 up from the low and 11 off the high. December corn traded slightly lower into the close after seeing marginal gains midsession. The new crop contract saw support from end user buying but technical selling was ultimately too much pressure for the bulls. Corn was also pressured by sharp losses in Chicago Wheat market after Egypt bought another round of Black Sea wheat. Early yields in the Delta continue to be reported better than expected but traders anticipate lower yields and test weights as harvest moves to the northwest. Cash corn at the Gulf of Mexico export channels was weaker today and fell to a new 2 year low as new crop bushels make their way to the market and export demand weakens. Corn bulls remain nervous about the possibility of a cut to the Ethanol Mandate but recent studies show that blending economics and a surplus of RINS will keep ethanol in demand by blenders even if a the RFS is revised lower. Corn bears feel demand rationing has occurred in the livestock and export markets but more may need to be done if the average US corn yield falls below the August USDA estimate of 123.4 bushels/acre. Outside markets were mixed today with the US Dollar trading slightly higher and a higher crude oil market offered minimal support. September Rice finished down 0.365 at 15.29, 0.09 off the high and equal to the low.

Pro Farmer: After the Bell Corn Recap (Source:CME)
Corn futures saw two-sided trade but didn't stray too far from unchanged as traders reevaluated positions. Futures ended near session lows with losses mostly around 3 to 4 cents. Early gains were spurred by short-covering following back-to-back days of sharp price losses. Increased harvest-related pressure from the South limited the market's ability to rally and contributed to deterioration in Gulf basis.

China diverts up to 500,000 T of Brazilian sugar -dealers(Reuters)
China has diverted up to half a million tonnes of Brazilian sugar scheduled to reach its shores in the third quarter to destinations including India, Indonesia and Malaysia, as it looks to avoid a supply glut, five dealers said on Tuesday.

SOFTS: Raw sugar futures nudged higher after recent losses caused by improving prospects in top producers Brazil and India, while arabica coffee and ICE cocoa were firm.(Reuters)

Oil Falls After Industry Report Shows U.S. Crude Supply Gained (Source: Bloomberg)
Crude fell in New York after an industry report showed stockpiles in the U.S., the world’s biggest crude user, rose for the first time in three weeks. Futures dropped as much as 0.4 percent, reversing yesterday’s 0.8 percent gain, after the American Petroleum Institute reported that oil inventories climbed by 2.78 million barrels to 367.1 million last week. The U.S. Energy Department may report stockpiles fell by 1.5 million barrels when it releases data today, according to a survey of 10 analysts by Bloomberg News. “Increased inventory is something that’s taken very negatively,” said Ric Spooner, a chief market analyst at CMC Markets in Sydney who predicts prices will trade lower than $98 a barrel for the next two to three months. “It becomes a bit of a barrier toward higher prices if there’s extra supply that can come on the market.”
Oil for September delivery fell as much as 37 cents to $93.06 a barrel on the New York Mercantile Exchange. It was at $93.19 at 9:52 a.m. Tokyo time. The contract yesterday advanced 70 cents to settle at $93.43. Prices are down 5.7 percent since the beginning of the year. Brent crude for September settlement, which expires Aug. 16, fell as much as 54 cents, or 0.5 percent, to $113.49 a barrel on the London-based ICE Futures Europe exchange. It yesterday lost 14 cents, or 0.1 percent, to $113.89. The European benchmark contract’s premium to New York futures was at $20.49 from yesterday’s close of $20.60.

OIL-Oil up despite weak Europe data, eyes U.S. stocks (Reuters)
Oil prices edged up to trade close to $114 a barrel after weak European economic data proved to be slightly less gloomy than anticipated and ahead of a U.S. report expected to show a drop in oil stockpiles. "Investors will be looking for a positive retail sales number in July to turn around a succession of weaker months,"  Ric Spooner, chief market analyst at CMC Markets, said in a note. Prices also remained supported by underlying supply worries stemming from tensions in the Middle East and falling North Sea production in September.

Oil price inflates as speculators bet on stimulus (Reuters)
LONDON, Aug 14 (Reuters) - Oil prices are racing higher as investors bet that central bank cash will soon boost a market afraid of Middle East war and worried about North Sea supplies, but the rally looks increasingly inflated by speculative guesswork.
Oil is up almost a third in six weeks at a time when the world economy, and hence fuel demand, are extremely weak.

Argentina to buy fewer LNG cargos than expected-source (Reuters)
BUENOS AIRES, Aug 13 (Reuters) - Argentina will buy about 30 percent less liquefied natural gas than originally expected this year due mainly to rising fuel imports from neighboring Bolivia, a source at state energy company ENARSA said on Monday.
Latin America's No. 3 economy, Argentina has seen its energy import bills spike while its own oil and gas output has fallen in recent years - prompting the controversial state takeover of top energy company YPF  earlier this year.

Rusal Beating Metal as Near-Record Reserves Elusive: Commodities (Source: Bloomberg)
Aluminum company shares are poised to return more than the metal they make as financial contracts mask a glut by limiting supplies and raising costs for buyers. United Co. Rusal, the biggest producer, will climb 35 percent in Hong Kong trading and Oslo-based Norsk Hydro ASA, 27 percent, the average of as many as 19 analyst estimates shows. The projected 21 percent gain for Alcoa Inc., the largest in the U.S., would extend this year’s 1.7 percent advance, compared with aluminum’s 8.4 percent drop. The metal will gain 19 percent to $2,200 a metric ton on the London Metal Exchange in 12 months, the median of 15 analysts surveyed by Bloomberg. Production of 45 million tons this year will exceed consumption of 44.6 million tons, while another 11.4 million is currently stored in warehouses, according to Morgan Stanley. About 65 percent of inventories is locked away in financial contracts, enough metal to supply the U.S. for two years.
“You cannot access this stuff because it’s tied up in inventory financing deals,” said Peter Richardson, chief metals economist at Morgan Stanley in Melbourne. “Given the scale of the material that’s around and the volume tied up in these deals, you are inevitably going to get a tighter market.” Aluminum tumbled into a bear market in mid September and retreated another 17 percent since then to $1,850, as output rose to the highest ever and the global economy slowed. The LMEX (LMEX) index of six industrial metals dropped 2 percent since the end of September as the Standard & Poor’s GSCI gauge climbed 11 percent, led by crops as drought parched fields from the U.S. to Australia. The MSCI All-Country World Index of equities rose 15 percent and Treasuries returned 3 percent, a Bank of America Corp. index shows.

Paulson, Soros Add Gold as Price Declines Most Since 2008 (Source: Bloomberg)
Billionaire investors George Soros and John Paulson increased their stakes in the biggest exchange- traded fund backed by gold as prices posted the largest quarterly drop since 2008. Soros Fund Management more than doubled its investment in the SPDR Gold Trust to 884,400 shares as of June 30, compared with three months earlier, a U.S. Securities and Exchange Commission filing for second-quarter holdings showed yesterday. Paulson & Co. increased its holdings by 26 percent to 21.8 million shares. Gold slumped 4 percent in the second quarter, the biggest such loss since Sept. 30, 2008. Prices fell as European Central Bank President Mario Draghi and Federal Reserve Chairman Ben S. Bernanke failed to increase stimulus measures, damping the outlook for global growth and demand for the metal as a hedge against inflation. The price is down 0.1 percent since June 30.
“It’s all about easing, and people are especially waiting for the Fed since investors expect prices will rise,” if the central bank announces more bond purchases, said Walter “Bucky” Hellwig, who helps manage $17 billion of assets at BB&T Wealth Management in Birmingham, Alabama. “People are willing to hold on to gold to see what the Fed will say.” The metal surged 70 percent from the end of December 2008 to June 2011 as the Fed kept borrowing costs at a record low and bought $2.3 trillion of debt in two rounds of so-called quantitative easing.

Silver Hoard Near Record as Hedge-Fund Bulls Recoil: Commodities (Source: Bloomberg)
At a time when hedge funds are the least bullish on silver in almost four years, investors’ holdings are near a record, siding with the analysts predicting a rally as central banks move to bolster growth. Speculators cut bets on higher prices by 72 percent since the end of February, mirroring changes in their copper wagers, which turned bearish in May, U.S. Commodity Futures Trading Commission data show. Silver held in exchange-traded products climbed for three months and is now valued at $16.2 billion, according to data compiled by Bloomberg. Prices will average $33.02 an ounce in the fourth quarter, 18 percent more than now, the median of 13 analyst estimates compiled by Bloomberg show.
Hedge funds anticipate slowing growth will curb demand for silver, 53 percent of which is used in products from televisions to batteries. Investors and analysts are bullish on expectations central banks will do more to stimulate economies, expanding consumption and increasing the allure of precious metals as a store of value. Prices tripled as the Federal Reserve bought $2.3 trillion of debt in two rounds of so-called quantitative easing from December 2008 to June 2011. “Since the beginning of the year it has reacted more like a base metal than a precious one,” said Frederique Dubrion, the Geneva-based president and chief investment officer of Blue Star Advisors SA, which manages metals and energy assets. “The main negatives are still in industry. We’re waiting for more quantitative easing, and that would be really positive.”

20120815 0936 Soy Oil & Palm Oil Related News.

ITS CPO export up 7.6% to 606,449 tonnes for the period of 1~15 Aug 2012.
SGS CPO export up 10.3% to 588,749 tonnes for the period of 1~15 Aug 2012.

Soybean Complex Market Recap (Source:CME)
August Soybeans finished up 23 3/4 at 1680, 10 off the high and 20 3/4 up from the low. November Soybeans closed down 2 3/4 at 1598. This was 11 up from the low and 15 off the high. August Soymeal closed up 4.5 at 530.8. This was 3.0 up from the low and 3.3 off the high. August Soybean Oil finished down 0.12 at 52.83, 0.19 off the high and 0.03 up from the low. November soybeans traded slightly lower into the close but managed to settle off session lows made this morning. Soybean oil traded lower on the day while soybean meal saw slight gains. Early losses were linked to a slightly cooler weather outlook for the Midwest and technical sell pressure. July NOPA crush was reported at 137.4 million bushels vs. 134.2 in June. The crush estimate was much better than trade expectations at 132.5 million bushels. Rising food prices in China have traders expecting more soybean imports in the near future. This has strengthened cash soybean levels along the Mississippi River and in export channels providing a lift to futures. A closely followed crop advisor revised his US average soybean yield to 36 bushels/acre vs. 38 in his last estimate. US soybean export sales for the 2012/13 (next) marketing year are already more than 50% of the current USDA estimate vs. the 5 year average of just 22%. The sharply lower production in South America continues to push export demand to the US market. Analysts believe this trend could last well into 2013 causing US supply to tighten further given the lower US production forecast.

Pro Farmer: After the Bell Soybean Recap(Source:CME)
August soybean futures expired 23 3/4 cents higher at $16.80. Deferred months saw two-sided trade and ended mid-range and narrowly mixed. Soymeal ended with slight gains while soyoil ended mostly slightly lower. Soybean futures were initially supported by better-than-expected NOPA soybean crush data that along with firmer Gulf basis point to still-strong soybean demand and the need for more price rationing.

Brazil forward soy sales slow, shortage of physical beans-Celeres(Reuters)
Some Brazilian states seeking to lock in record-high grains prices have already sold half of their 2012/2013 soybean crop as the U.S. drought spurs fears of a global food crisis, local analyst Celeres said on Monday.

EDIBLE OIL: Malaysian crude palm oil futures hit a fresh 10-month low as improving output and slower exports in the Southeast Asian country stirred concerns over swelling stocks.(Reuters)