Thursday, August 23, 2012

20120823 1809 FCPO EOD Daily Chart Study.

FCPO closed : 3061, changed : -17 points, volume : lower.
Bollinger band reading : pullback correction upside biased.
MACD Histogram : rising higher, buyer in control.
Support : 3050, 3020, 2970, 2950 level.
Resistance : 3070, 3100, 3150, 3200 level.
Comment :
FCPO closed slipped little lower with declined volume transacted. Soy oil currently pulling back lower after overnight advanced higher by more than 1% while crude oil price continue to trade firmer after yesterday rallied.
Price sliding downward after testing 1 month high near 3100 on profit taking activities after recent more than 250 points surged within 5 trading days. Market will be watching closely on export and crop damaging U.S. dry weather development.
Daily chart wise, market is currently having pullback correction within an upside biased market 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.

20120823 1735 FKLI EOD Daily Chart Study.

FKLI closed : 1654.5 changed : +5.5 points, volume : lower.
Bollinger band reading : upside biased.
MACD Histogram : turned upward, buyer in advantage.
Support : 1650, 1640, 1630, 1623 level.
Resistance : 1660, 1670, 1680, 1690 level.
Comment :
FKLI closed at all time high recorded gain with thinner volume changed hand doing about 3 points premium compare to cash market closed closed marginally lower. Overnight U.S. markets closed mixed and today Asia markets ended mostly higher while European markets currently trading higher.
Speculation on world top 2 countries (U.S. and China) will implement additional easing or stimulus soon send world markets higher following China purchasing managers index data released showing decline.
Daily chart reading adjusted to suggesting an upside biased market development.
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.

20120823 1700 Regional Markets EOD Daily Chart Study.

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

20120823 1601 Global Markets & Commodities Related.

GLOBAL MARKETS: Asian shares rose to a two-week high after Federal Reserve minutes raised hopes for fresh monetary stimulus, but a survey suggesting that China's manufacturing sector is contracting capped the gains. European stock index futures pointed to a higher open after steep declines in the previous session, with minutes from the latest Federal Reserve meeting raising expectations of another round of stimulus to help the economy. The S&P 500 erased earlier losses to close flat on Wednesday after minutes from the latest Federal Reserve meeting indicated the central bank might be ready for another round of stimulus. (Reuters)

FOREX-Dollar hits 2-month low on Fed easing optimism
TOKYO, Aug 23 (Reuters) - The dollar hit a two-month low against a basket of currencies after minutes of the U.S. Federal Reserve meeting surprised traders by suggesting it is willing to deliver more stimulus "fairly soon".
"The minutes were quite dovish, leading you to think that there will be some form of easing next month unless upcoming payroll data is surprisingly strong," said Ayako Sera, senior economist at Sumitomo Mitsui Trust Bank, referring to the U.S. employment report due on Sept. 7.

FOREX: The dollar hit a two-month low against a basket of currencies after minutes of the U.S. Federal Reserve meeting surprised traders by suggesting it is willing to deliver more stimulus "fairly soon".(Reuters)

Fed looks set to ease fairly soon barring swift rebound(Reuters)
The Federal Reserve is likely to deliver another round of monetary stimulus "fairly soon" unless the economy improves considerably, minutes from the U.S. central bank's latest meeting suggested.

China HSBC Flash PMI at 9-mth low, new export orders sink(Reuters)
China's factory activity in August shrank at its fastest pace in nine months as new export orders slumped and inventories rose, a signal that a persistent slowdown in economic growth has extended deeper into the third quarter.

China factory sector shrinks most in 9 mths-survey
BEIJING, Aug 23 (Reuters) - China's factories contracted in August the most in nine months according to a survey showing falling export orders and rising inventories, signs that more policy action is probably needed to stop a slowdown in economic growth now in a seventh quarter.
The HSBC Flash China manufacturing purchasing managers index (PMI) fell to 47.8 in August, its lowest level since November, down from both the 49.5 July flash and the 49.3 final reading.

GRAINS: Chicago soybeans hit a contract high, rising for a fourth session out of five, after a group of experts painted a bleak supply picture for the crop that has been scorched by the worst drought across the U.S. Midwest in 56 years. (Reuters)

Illinois corn, soy farms suffer yield loss on drought -tour(Reuters)
Soybean yields in Illinois, the No. 2 growing state for the crop, have been hit by a blistering drought in the region, while corn yields there are at their lowest since 1995, a group of experts looking at the condition of crops in the United States said on Wednesday.

Australia declares resources boom has peaked(Reuters)
Australia declared the top of the resources boom, which had cushioned the country against the global financial crisis, a day after the world's biggest miner BHP Billiton shelved two major expansion plans worth at least $40 billion.

U.S. crude stocks fall sharply, oil products mixed-EIA(Reuters)
U.S. crude oil stockpiles fell sharply last week amid a drop in crude imports, while inventories of refined products were mixed as plant utilization fell, government data showed on Wednesday.

OIL: Brent crude rose more than a dollar, approaching $116 per barrel on renewed hopes for another round of monetary stimulus by the U.S. Federal Reserve, helping investors look past weak manufacturing data from China. (Reuters)

COLUMN-China's metals imports reflect supply as well
---Andy Home is a Reuters columnist. The opinions expressed are his own.---
LONDON, Aug 22 (Reuters) - Once again the strength of China's metallic imports has surprised many commentators.
Construction sector clampdown? Manufacturing slowdown? The drags on the Dragon, as it is affectionately known in the metals markets, are multiple.

Rio's CEO says long-term commodities outlook unchanged
PERTH, Aug 23 (Reuters) - The positive long-term outlook for global commodity prices has not changed, global miner Rio Tinto's chief executive said on Thursday, shortly after Australia's resources minister announced the peak of the country's resources boom.
"The long term picture for me hasn't changed," Tom Albanese told a resources industry gathering in Perth, adding "I would have never have said there was a boom in the first place."

BASE METALS: London copper rallied to a one-month high, after the U.S. Federal Reserve signalled further stimulus might be on the agenda, but shrinking factory growth numbers out of top metals consumer China kept a lid on gains.(Reuters)

PRECIOUS METALS: Gold rose above $1,660 an ounce for the first time since early May, after minutes from the latest U.S. Federal Reserve meeting fuelled hopes for the swift launch of another round of quantitative easing. (Reuters)

METALS-Copper tails back from one-month high after China PMI
SINGAPORE, Aug 23 (Reuters) - London copper rallied to a one-month high, after the U.S. Federal Reserve signalled further stimulus might be on the agenda, but shrinking factory growth numbers out of top metals consumer China kept a lid on gains.
"The Fed said they would act unless they see substantial and sustainable strengthening. Clearly you're not seeing that which says the Fed has to do something," said Hong Kong-based commodities analyst James Luke of China International Capital Corporation.
"But it's been a pretty muted price response, which I think reflects ongoing China industrial weakening and doubts over the efficacy of any new stimulus round."

PRECIOUS-Gold hits highest since early May on Fed stimulus hopes
SINGAPORE, Aug 23 (Reuters) - Gold and silver both rose to their highest levels in more than three months, shaking off months of lethargy after minutes from the latest U.S. Federal Reserve meeting fuelled hopes for the swift launch of more bond buying.
"The Fed's tone is totally different in the minutes from previous comments, and that helped gold break from the previous range and move into a higher price range ahead of the peak consumption season," said Chen Min, an analyst at Jinrui Futures in the southern Chinese city of Shenzhen.

20120823 1130 Global Markets & Commodities Related...

GLOBAL MARKETS-Asian shares up after Fed minutes, euro hits 7-week high
TOKYO, Aug 23 (Reuters) - Asian shares rose and the euro hit a seven-week high on Thursday as the Federal Reserve's minutes raised the prospect for more stimulus while uncertainty continued over progress in Europe's debt crisis including the European Central Bank's bold action.
"The data released since the August 1 conclusion does little to sway the 'substantial and sustainable' requirement," said Andrew Wilkinson, chief economic strategist at Miller Tabak & Co. in a note.

OIL-Oil rises on Fed minutes, U.S. inventory drop
NEW YORK, Aug 22 (Reuters) - Oil prices rose on Wednesday as indications the Federal Reserve is likely to provide more stimulus and a sharp drop in U.S. crude inventories countered concerns about Europe's debt crisis.
"The implication is that it will require more units of a degraded asset (U.S. dollar) to purchase hard assets like oil," said Michael Fitzpatrick, editor in chief at industry newsletter Energy Overview in New York.

U.S. crude stocks fall sharply, oil products mixed-EIA
NEW YORK, Aug 22 (Reuters) - U.S. crude oil stockpiles fell sharply last week amid a drop in crude imports, while inventories of refined products were mixed as plant utilization fell, government data showed on Wednesday.
Domestic stocks of crude, excluding oil held in the Strategic Petroleum Reserve, fell by 5.41 million barrels to 360.75 million barrels in the week ended on Friday, the Energy Information Administration reported. Analysts polled by Reuters had forecast a smaller drop of 400,000 barrels.

U.S. SEC forces disclosure of oil, mining payments abroad
WASHINGTON, Aug 22 (Reuters) - U.S.-listed oil, gas and mining companies will be required to  reveal payments they make to foreign governments, including those for drilling or exploration licenses, under rules adopted by U.S. regulators that try to reduce bribery and corruption risks.
The U.S. Securities and Exchange Commission also on Wednesday finalized a rule requiring manufacturers to disclose whether their products include certain minerals from the war-torn Democratic Republic of the Congo.

NATURAL GAS-Warm forecasts, storm drive U.S. natgas futures higher
NEW YORK, Aug 22 (Reuters) - U.S. natural gas futures ended higher on Wednesday, driven by forecasts for warm weather that should lift power demand, and concerns that a storm headed into the Caribbean could strengthen into a hurricane and disrupt Gulf
of Mexico gas production.
"The reason to show how wobbly these forecasts are is to highlight the uncertainty we have going into the back half of the week. Even if such a small slice of the production pie comes out of the Gulf Offshore ... incremental losses of production will restrain selling until the threat has passed," Gelber & Associates analyst Patrick Saunders said in a report.

EURO COAL-prices drop ahead of more Colombian exports
LONDON, Aug 22 (Reuters) - Physical prompt coal prices eased slightly in thin trading on Wednesday as Atlantic seaborne supplies were expected to improve by September, following the end of a Colombian rail workers strike.
"Some producers need to sell their prompt coal cargoes above $90 a tonne in order to make a profit, and they are worried that their margins will be eaten up by the time Colombia has returned to full export mode at the end of August," one coal trader said.

20120823 1018 Global Economy Related News.

Taiwan: Unemployment rate rose in July after economy contracted
Taiwan’s jobless rate increased in July for a third month this year after the economy contracted, as a slowdown in China and Europe’s debt crisis hurt exports. The seasonally-adjusted unemployment rate rose to 4.25% from 4.24% in June, the statistics bureau said. The median estimate of 11 economists in a Bloomberg News survey was 4.3%. (Bloomberg)

China needs about Rmb2.4tr (US$373bn) of green investment if it is to meet its  energy conservation targets under a five-year plan ending 2015. The spending will reduce China's energy consumption per unit of GDP by 16% by 2015 and save an equivalent of 670m tonnes of coal. (Reuters)

Japan's trade balance left a shortfall of ¥517.4bn in Jul, reversing the surplus of ¥60.3bn in Jun and bigger than a market forecast for a ¥275bn deficit. (AFP)

India: Considers USD35bn debt revamp after biggest blackout
India plans to restructure about USD35bn of loans held by its utilities to boost their ability to supply electricity and avert outages like the one that cut off power to half the nation’s 1.2bn people. Half of the short-term borrowings of the state-owned utilities, which generate or buy and distribute electricity, will be transferred to the books of the regional governments, according to a power ministry draft proposal obtained by Bloomberg News. The rest will be rescheduled by the banks and allowed a three-year moratorium on principal repayments. (Bloomberg)

India: July consumer prices rise at slowest pace in four months
Indian consumer prices increased at the slowest pace in four months in July as the climb in energy costs moderated. The consumer-price index rose 9.86% from a year earlier, compared with a revised 9.93% in June, the Central Statistical Office said. (Bloomberg)

UK: Factory orders decline as export demand weakens, CBI says
An index of UK manufacturing orders fell to its lowest in eight months in August as overseas demand dropped, the Confederation of British Industry said. An index of factory orders declined to -21 from -6 in July, the employers’ group in London said, the lowest since last December. A gauge of export orders also fell to its lowest since January. (Bloomberg)

UK: Unexpectedly posts deficit as tax receipts plunge
Britain unexpectedly posted a budget deficit in July as corporation-tax receipts plunged, partly due to the closure of the Elgin gas field in the North Sea. The shortfall, which excludes government support for banks, was GBP557m (USD878m) compared with a surplus of GBP2.84bn a year earlier, the Office for National Statistics said. The median of 17 forecasts in a Bloomberg News survey was for a surplus of GBP2.2bn. Tax revenue fell 0.8% and corporation tax plunged 19.3%. Government spending rose 5.1%. (Bloomberg)

UK: Pound snaps two-day decline against the euro before UK growth data
The pound snapped a two-day decline against the euro before a report this week that analysts said may show Britain’s economy contracted less than previously estimated in the second quarter. The sterling strengthened versus most of its 16 major counterparts. It slid to the lowest level in two weeks against the 17-nation common currency. GDP fell 0.5% from the first quarter, when it shrank 0.7%, according to the median estimate of 30 economists in a Bloomberg News survey. (Bloomberg)

Euro: Christmas decoration sales to US rise on economy
Sales of traditional German Christmas decorations to the US are rising because of the improving US economy and the euro’s decline, the industry association said. Exports of Christmas decorations to the US from the Erzgebirge region in eastern Saxony state will be worth as much as EUR10m (USD12.5m) this year, said Dieter Uhlmann, the industry association’s head. That compares with EUR9.5m in 2011, EUR9m in 2010 and less than EUR6m in 2009. (Bloomberg)

US: Existing-home sales rise from eight-month low
Sales of existing homes climbed in July from an eight-month low, showing that the cheapest mortgage rates on record are underpinning a market struggling to join the US economic recovery that began three years ago. Purchases increased 2.3% to a 4.47m annual rate, figures from the National Association of Realtors showed. The median forecast of 73 economists surveyed by Bloomberg called for a rise to a 4.51m rate. (Bloomberg)

The  US MBA purchase applications index  rose 0.9% wow in the 17 Aug week (-2.0% in the earlier week), whilst the  refinance index fell 9.0% wow (-5.0% in the prior week). (Bloomberg)

The US Congressional Budget Office said that current policies designed to slash the budget deficit after 1 Jan 2013 will plunge the country into recession and push up joblessness. (AFP)

US Federal Reserve policymakers  are leaning toward  more stimulus action "fairly soon" unless economic data turns around, minutes from their meeting three weeks ago showed. (AFP)

20120823 1017 Malaysia Corporate Related News.

Guan Chong bonus issue is on
Guan Chong Bhd, whose share price took a hit yesterday after it shelved plans for a secondary listing in Singapore, said it will proceed with a bonus issue that was proposed together with that listing exercise. The company, one of the region’s largest cocoa processors that supplies to chocolate makers such as Mars and Hershey’s, expects its issue of up to 159.9m shares to be listed on 12 Sept. (BT)

Guan Chong won’t proceed with listing in Singapore
Main Board-listed Guan Chong will not proceed with its secondary IPO on the Singapore Exchange “for the time being”. Managing director and CEO Brandon Tay said that after much consideration, the processing company wished to reassess its strategic directions with regard to capital requirements for expansion. It did not provide a reason for not proceeding with the IPO for now. (StarBizWeek)

Dialog shareholders’ pact with CAO lapses
Dialog Group announced its shareholders’ agreement with China Aviation Oil (S) Corp Ltd (CAO) has lapsed. The company said the parties involved had mutually agreed that the agreement would lapse on Monday, as not all the conditions precedent had been fulfilled within the required timeframe. (StarBizWeek)

1MDB said planning USD2bn power asset share offer
1Malaysia Development (1MDB) plans to raise as much as USD2bn (RM6.26bn) in an IPO of its power assets, said a person with knowledge of the matter. The IPO may take place in the first quarter of next year, said the person who asked not to be identified as the process is private. 1MDB has recently spent about USD3.5bn purchasing electricity generation plants. (BT)

Heineken may raise bid for brewer
Heineken NV is negotiating with Singapore’s F&N about raising its USD6bn (RM18.78bn) bid for full control of the maker of Tiger Beer and breweries in 14 countries as it fights against Thai billionaire Charoen Sirivadhanabhakdi for its future in Asia. A revised offer for Asia Pacific Breweries (APB) by Heineken could be up 10% higher than its earlier bid and may be conditional on F&N not accepting a partial Thai bid, sources with direct knowledge of the talks said. (BT) Please see accompanying report on the consumer sector.

KNM pins hope on UK job
Nearly two years after announcing its proposed RM2.2bn waste-to-energy project in the UK, KNM Group Bhd says it is close to securing financials for the job that is crucial to regain investor confidence in the process equipment manufacturer. The company, which has fallen off the radar of most investment houses after a wrongly timed expansion at the height of the financial crisis in 2008, said Exim Bank is the lead arranger for a syndicated loan for the project. If successfully implemented, it will provide KNM with recurring cash flow, giving some comfort for the company whose earnings are driven by contracts. (Financial Daily)

Penang manufacturers require more manpower
Penang’s total manpower needs for 33 manufacturing firms between now and 2013 stands at 3,766 employees. These firms, comprising both multinational and local corporations, were the respondents in a survey conducted by the industry-led Penang Skills Development Centre among its 100 manufacturer member companies. (BT)

TSH outlines benefits of acquiring Pontian United
TSH Resources Bhd says it is upbeat that its RM800m investment to acquire Pontian United Plantations Bhd will generate positive cash flow and create long-term synergistic value for both companies. Its chairman, Datuk Kelvin Tan, said the plan to buy the small-size planter will help both companies lower their overall production cost by a significant value. (BT)

Qatar buys 22% stake in Citic Capital
A unit of Qatar’s sovereign wealth fund has bought a 22% stake in Citic Capital Holdings, linking one of the Middle East’s most powerful investors with one of China’s top investment funds. While the sum Qatar is paying for the stake is likely in the tens of millions of dollars, the partnership could have a big global impact given the hundreds of billions of dollars in cash each fund has access to. (Financial Daily)

Astro Malaysia to take one-third of IPO proceeds
The re-listing of Astro Malaysia Holdings Bhd is expected to raise some USD1.75bn (RM5.47bn) from the sale of 29.2% of the company. However, only 31.2% of proceeds raised from the sale of up to 1.52bn new and existing shares as the comeback IPO will go to Astro Malaysia, according to an updated prospectus dated 17 Aug on the Securities Commission’s website. (Financial Daily)

Higher rental income lifts KrisAssets’ earnings
KrisAssets Holdings Bhd, in the midst of listing a real estate investment trust (REIT), sees a sharp jump on earnings for the second quarter (2Q) ended 30 June due to higher rental income and lower property maintenance costs. The shopping mall owner announced a 33.6% jump in pre-tax profit of RM57.3m for 2Q from RM42.9m, excluding the recognition of a RM55m revaluation surplus in the previous corresponding quarter (Financial Daily)

Allianz, OSK Trustees sign strategic partnership
Allianz Life Insurance Malaysia Bhd, which has signed a strategic partnership agreement with OSK Trustees Bhd, hopes to offer a holistic financial solution to existing customers. Allianz CEO Jens Reisch said it will recommend customers a life insurance product that suits their needs while OSK Trustees will offer estate planning services. (Financial Daily)

Dialog unit to work with CAO despite termination of storage terminal plan
Dialog Group Bhd’s 55%-owned Centralised Terminals SB and China Aviation Oil (Singapore) Corp Ltd (CAO) have agreed to continue to explore other suitable collaboration opportunities after the termination of its plan to build an oil storage terminal. The remaining 45% of Centralised Terminals is owned by MISC Bhd. (StarBiz)

Shrimp producer eyes ACE Market listing
Kembang Subur Holdings Bhd (KSHB), a company involved in shrimp production, is seeking a listing on the ACE Market of Bursa Malaysia with an offer of 39.2m of new shares in its initial public offering. The company said it would utilize RM4.9m or 48% of its raised proceeds as capital expenditure. (StarBiz)

Supermax Corp Bhd which will continue to focus on downstream activities is looking to strengthen its distribution network in Germany, the US, Canada, Brazil and the UK. The company also intends to sell more gloves under its own brand. The company said that it expects to achieve a 15-20% annual profit growth over the next five years. Supermax also said it has no intentions to move into the upstream activity of managing rubber plantations. (Sun Biz)

Temasek’s partnership with Malaysia’s privately held  Langkah Bahagia is complicating the Singapore investment agency to divest its investment in Alliance Financial Group to DBS Bank. The transaction won’t comply with domestic banking rules that limit ownership by any single group in a financial institution to 20%. Langkah Bahagia and Temasek control a 29.06% stake in AFG through a JV called Verticle Theme. Bankers said Temasek’s plan to sell 49% interest in Verticle Theme to DBS won’t resolve shareholding issues at AFG. The plan is also being complicated by Langkah Bahagia’s desire to sell its indirect interest in AFG. (Financial Daily)

The  Casino Regulatory Authority of Singapore (CRA) has imposed financial penalties totalling S$357,500 and $140,000 on  Marina Bay Sand Pte Ltd and Resorts World at Sentosa Pte Ltd respectively for breaching social safeguard requirements during the period May 1, 2011 to Oct 31, 2011. In a statement, CRA said the casino operators were found to have not complied fully with social safeguard requirements, which are put in place to contain and control the potential harm of casino gambling to society. (Bernama)

After almost a decade of trying and failing to set up a Singapore- based budget carrier,  AirAsia is planning to give it another go. Its new Singapore CEO Logan Velaitham has confirmed that Asia's largest budget airline group is preparing to apply for a Singapore Air Operator's Certificate (AOC). AirAsia has made a preliminary presentation to the Ministry of Transport to demonstrate AirAsia’s commitment and contribution to Singapore.  Mr Logan is confident that AirAsia will finally land its much coveted Singapore AOC. Under existing rules, a Singapore AirAsia would need to be 51% held by Singaporean entities, with Malaysia’s AirAsia Bhd controlling the remaining 49% stake. The airline is evaluating various potential Singapore partners.  Mr Logan conceded that his recent promotion to CEO of the Singapore operation was a precursor to the AOC application. (BT)

Shin Yang Shipping Corporation Bhd (Syscorp) has broadened its revenue base with the commencement of crude palm oil (CPO) transportation. Group financial controller Richard Ling said the maiden CPO shipment left to China about 10 days ago while another tanker is expected to start CPO transportation to India in one to two months. Ling said CPO transportation would start contributing to the group revenue from current financial year ending June 30, 2013. Both tankers were owned by Micaline Sdn Bhd, a 55:45 joint venture between Syscorp and Sarawak Oil Palms Bhd. (StarBiz)

20120823 1014 Global Markets Related News.

Asia FX By Cornelius Luca - Wed 22 Aug 2012 17:07:10 CT (Source:CME/
The appetite for risk was spotty on Wednesday. The market focused on the Fed's minutes and the weakness of the economy should sanction another round of quantitative easing measures at their next meeting in September. Just in time for the elections! All of the foreign currencies but the Canadian dollar surged on hopes that the Fed will ease (see above) and that the European Central Bank will act to curb surging peripheral Eurozone borrowing costs and find ways to keep Greece afloat. The US stock markets were mixed, but gold, oil and silver advanced. The short-term outlook for most foreign currencies is sideways. The medium-term outlook for most of the foreign currencies is sideways. The LGR short-term model is long across the board.  Good luck!

US: Existing home sales rose 2.3% to an annual rate of 4.47 million in July from 4.37 million in June. The report median existing-home price edged down 0.8% to $187,300 in July from $188,800 in June.
US: The FOMC minutes of the most recent policy meeting showed that many members of the Federal Reserve say additional monetary policy accommodation is likely warranted unless the economy improves substantial. This may signal another round of quantitative easing measures at their next meeting in September.
Canada: Retail sales declined by 0.4% in June after expanding 0.2% gains in May.

Today's economic calendar
China: Leading economic index
China: HSBC manufacturing PMI for August

Most Asian Stocks Drop Led by Exporters as Dollar Weakens (Source:Bloomberg)
Most Asian stocks declined led by Japanese and South Korean exporters as the U.S. dollar weakened after minutes from a Federal Reserve meeting showed many policy makers favored more monetary easing unless the economy shows signs of sustained growth. Honda Motor Co. (7267), a Japanese carmaker that gets about 44 percent of sales from North America, slipped 1.6 percent in Tokyo. Samsung Electronics Co., the world’s biggest mobile-phone maker by sales, lost 0.6 percent in Seoul as South Korea’s won rose toward a one-month high. QR National Ltd. advanced 1.9 percent after Australia’s largest coal-train operator posted full-year profit that topped estimates. Three shares fell for every two that rose on the MSCI Asia Pacific Index (MXAP), which gained 0.4 percent to 121.04 as of 9:39 a.m. in Tokyo. Investor optimism that global central banks will take action to stimulate economic growth has pushed the gauge up 11 percent from its June low.
“U.S. policy makers are frustrated with the anemic pace of the recovery and this increased the odds that some form of additional Fed easing will be implemented at the central bank’s September meeting,” said Matthew Sherwood, Perpetual Investments’ head of investment markets research in Sydney. Perpetual manages about $23 billion. “Some form of quantitative easing is coming soonish.” Japan’s Nikkei 225 Stock Average lost 0.5 percent, while South Korea’s Kospi Index slipped 0.3 percent. Australia’s S&P/ASX 200 Index gained 0.4 percent. Markets in Hong Kong and China have yet to open.

Japan Stocks Fall as Yen Strengthens on Fed Speculation (Source:Bloomberg)
Japanese stocks fell, with Nikkei 225 Stock Average (NKY) falling the most in almost two weeks, as the yen strengthened after minutes from a Federal Reserve meeting showed policy makers favored adding stimulus unless the world’s biggest economy shows signs of sustained growth. Nissan Motor Co. (7201), a carmaker that gets almost half of its sales in North America and Europe, sank 2.8 percent after the yen rose against the dollar and euro. Toshiba Corp. fell 0.7 percent after its joint venture with Samsung Electronics Co. was sued over technology patents by LG Electronics Inc. Sharp Corp. jumped 3.9 percent on a report the manufacturer of liquid- crystal display televisions may get additional loans from banks. The Nikkei 225 Stock Average fell 0.6 percent to 9,073.55 as of 9:58 a.m. in Tokyo, with volume almost 10 percent lower than the 30-day average. The broader Topix Index lost 0.6 percent to 758.28, with about three times as many shares declining as advancing.
“The dollar has dropped on speculation that the Fed may ease policy -- that’s not very good for Japanese stocks,” said Akio Yoshino, who helps oversee the equivalent of $32 billion as chief economist at Amundi Japan Ltd. in Tokyo. “You also have to look at why the Fed is easing policy. If the economy were in better shape we wouldn’t be having this conversation.”

S&P 500 Erases Loss as Fed Minutes Show Stimulus Support (Source:Bloomberg)
The Standard & Poor’s 500 Index erased earlier losses as minutes from the Federal Reserve’s last meeting showed many policy makers favored more stimulus soon. Apple Inc. rose 2 percent, pacing a recovery among technology companies. PulteGroup Inc. (PHM) jumped 3.9 percent as a report showed sales of existing homes climbed in July from an eight-month low. Dell Inc. (DELL) sank 5.4 percent after cutting this year’s profit forecast. Rival Hewlett-Packard Co. (HPQ) gained 1.6 percent in late trading after the world’s biggest computer maker reported profit and sales that matched analysts’ estimates. The S&P 500 rose less than 0.1 percent to 1,413.49 at 4 p.m. in New York, after dropping as much as 0.5 percent earlier. The gauge briefly topped a four-year high yesterday. The Dow Jones Industrial Average lost 30.82 points, or 0.2 percent, to 13,172.76. Volume for exchange-listed stocks in the U.S. was 5.4 billion shares, 14 percent below the three-month average.
“The Fed minutes point slightly more in the direction of QE,” Seth Setrakian, the New York-based co-head of U.S. equities at First New York Securities, said in a telephone interview, referring to an additional round of stimulus known as quantitative easing. “It’s certainly seems to have a dovish tone, just a little bit more than what people thought before.” He said, “The market’s have become much more favorably inclined since the minutes came out.” Many Federal Reserve policy makers said additional stimulus would probably be needed soon unless the economy shows signs of a durable pickup, according to the record of the Federal Open Market Committee’s July 31-Aug. 1 gathering released today in Washington. The S&P 500 has rallied 11 percent since June 1 on speculation global central banks will take action to stimulate growth.

European Stocks Fall on Japan Trade Deficit (Source:Bloomberg)
European stocks slid the most in almost three weeks as Japan reported a wider-than-expected trade deficit and investors awaited the outcome of meetings between the leaders of countries in the euro area. BHP Billiton Ltd. (BHP) slid 1.7 percent after the world’s biggest mining company put $68 billion of projects on hold. Heineken NV (HEIA), which last week increased its offer to gain control of Asia Pacific Breweries Ltd., lost 1.1 percent after posting first-half earnings that missed analysts’ estimates because of higher costs. Man Group Plc (EMG) sank 4.4 percent as the hedge-fund manager reported a drop in assets at its flagship fund. The Stoxx Europe 600 Index (SXXP) declined 1.2 percent to 269.27 at the close, its biggest retreat since Aug. 2. The equity benchmark has still rallied 15 percent from this year’s low on June 4 as European Central Bank President Mario Draghi pledged to protect the single currency.
“Everybody’s waiting for the September 6 ECB meeting to see if policy makers will deliver on what has so far been a verbal intervention,” said Morten Kongshaug, the chief equity strategist at Danske Bank A/S. “Markets have overreacted to those prospects and we could see a selloff before then. Economic data are far from good as the numbers from Japan showed this morning.” The volume of shares changing hands on the Stoxx 600 was 9.8 percent lower than the average of the last 30 days, data compiled by Bloomberg show. National benchmark indexes declined in every western-European market. The U.K.’s FTSE 100 Index fell 1.4 percent. France’s CAC 40 Index lost 1.5 percent and Germany’s DAX Index slid 1 percent.

Brazilian Stocks Rise as Fed Minutes Spur Stimulus Speculation (Source:Bloomberg)
Brazilian stocks rebounded from yesterday’s drop as Federal Reserve minutes spurred speculation that U.S. policy makers may provide additional stimulus, buoying the prospects for Latin America’s biggest economy. Oil producer Petroleo Brasileiro SA contributed the most to the benchmark Bovespa index’s gain, following crude higher. Usinas Siderurgicas de Minas Gerais SA, the steelmaker that had losses in three of the past six quarters, gained the most in two weeks after Deutsche Bank AG said it expects an increase in flat-steel prices. Wireless carrier Tim Participacoes SA sank after Sanford C. Bernstein & Co. lowered its recommendation to the equivalent of hold. The Bovespa gained 0.8 percent to 59,380.76 at the close of trading in Sao Paulo. Forty-seven stocks rose on the measure while 19 declined. The real weakened 0.1 percent to 2.0177 per U.S. dollar at 5:45 p.m. local time.
“It’s been a while that investors have been waiting for more stimulus in the U.S., and maybe today’s statement was a sign that something will be done in the next policy meeting,” Joao Pedro Brugger, a portfolio manager at Leme Investimentos in Florianopolis, Brazil, said in a phone interview. Many Fed policy makers said “additional monetary accommodation would likely be warranted fairly soon” unless the economy shows signs of a durable pickup, according to minutes of their July 31-Aug. 1 meeting released today.

FOREX-Euro near 7-week high, policy optimism persists
LONDON, Aug 22 (Reuters) - The euro held steady versus the  dollar, trading close to Tuesday's seven-week high, and was expected to hold its gains on speculation euro zone  policymakers are readying action to stem the debt crisis.
"Any comments that are constructive, giving Greece at least  a chance to get an additional bailout package, is something that could support the euro further," said Ulrich Leuchtmann, head of FX research at Commerzbank.

Euro Remains Lower Before Manufacturing, Services Data (Source:Bloomberg)
The euro remained lower after its biggest one-day drop in more than a week against the yen yesterday before reports forecast to show continued contraction in the 17-nation region’s manufacturing and services industries. The euro failed to extend gains into a fourth day versus the dollar before the release of manufacturing purchasing managers’ indexes for Germany and France, the currency bloc’s two biggest economies. The U.S. currency was 0.3 percent from a one-week low versus the yen before Federal Reserve Bank of Chicago President Charles Evans speaks today. Minutes of the Federal Open Market Committee’s most recent meeting showed many policy makers favor additional stimulus, which could debase the greenback.
“The euro is being driven lower by fear of economic meltdown and financial market chaos,” said Hans Kunnen, chief economist at St. George Bank Ltd. in Sydney. “But one has to weigh that against probabilities of U.S. quantitative easing in terms of currencies. There may be more surprise out of the FOMC than out of the European PMIs, so that tells me that the euro shouldn’t suffer too badly should the PMIs be softer.” Quantitative easing refers to the Federal Reserve’s asset- purchase program. The euro was little changed at 98.45 yen at 10 a.m. in Tokyo after dropping 0.4 percent yesterday, the biggest decline since Aug. 10. It was at $1.2533 from $1.2529, after gaining 1.6 percent in the previous three days. The dollar was little changed at 78.55 yen from 78.58 yesterday, when it slid to as low as 78.28, the weakest since Aug. 13.

Korean Won Rises as Fed Minutes Show Stimulus Support (Source:Bloomberg)
South Korea’s won rose toward a one- week high as minutes from the Federal Reserve’s latest meeting showed some policy makers favored further monetary stimulus that may bolster demand for emerging-market assets. Many participants at the Fed’s meeting said a new large- scale asset-purchase program “could provide additional support for the economic recovery,” according to the record released yesterday. The Kospi Index (KOSPI) fell for a fifth day as overseas funds cut holdings of Korean equities for the first time since Aug. 3. Government bonds advanced. “Some investors covered their short positions on the dollar yesterday expecting nothing much to come out from the Fed minutes, but today we’ll see the reverse,” said Jude Noh, a Seoul-based chief currency trader at Suhyup Bank. “With the end of the month nearing, we may see some exporters selling the greenback as well.” A short position is a bet an asset will decline in value.
The won appreciated 0.4 percent to 1,131.75 per dollar as of 9:30 a.m. in Seoul, data compiled by Bloomberg show. It touched 1,130.80 yesterday, the strongest level since Aug. 14. One-month implied volatility for the won, a measure of exchange- rate swings used to price options, fell 23 basis points, or 0.23 percentage point, to 7.30 percent. The yield on the government’s 3.25 percent bonds due June 2015 slid two basis points to 2.89 percent, the lowest in a week, Korea Exchange Inc. prices show. Three-year debt futures rose 0.10 to 105.89 and the one-year interest-rate swap fell three basis points to 2.91 percent.

Many on FOMC Favored Easing Soon if No Pickup in Growth (Source:Bloomberg)
Many Federal Reserve policy makers said additional stimulus probably will be needed soon unless the economy shows signs of a durable pickup, according to minutes of their most recent meeting. “Many members judged that additional monetary accommodation would likely be warranted fairly soon unless incoming information pointed to a substantial and sustainable strengthening in the pace of the economic recovery,” according to the record of the Federal Open Market Committee’s July 31- Aug. 1 gathering released today in Washington. U.S. stocks and bonds rose as investors saw greater odds the central bank will increase accommodation. Chairman Ben S. Bernanke will have an opportunity to clarify his views in an Aug. 31 speech at a forum for central bankers in Jackson Hole, Wyoming, where he signaled a second round of bond buying by the Fed in 2010. Fed officials next meet on Sept. 12-13.
“They’re closer to doing QE3 than I would have guessed,” said John Silvia, chief economist at Wells Fargo Securities LLC in Charlotte, North Carolina, referring to a third round of bond purchases known as quantitative easing. “It may not be September. It could be October.” Many participants at the Fed’s meeting said a new large- scale asset-purchase program “could provide additional support for the economic recovery,” according to the minutes. Policy makers said in a statement after the meeting that they will step up record stimulus if needed to spur growth and cut a jobless rate stuck above 8 percent since February 2009.

Sales of U.S. Existing Homes Increase From Eight-Month Low (Source:Bloomberg)
Sales of existing homes climbed in July from an eight-month low, adding to signs U.S. housing may pick up in the second half. Purchases of previously owned houses, tabulated when a contract closes, increased 2.3 percent to a 4.47 million annual rate, figures from the National Association of Realtors showed today in Washington. The data were posted on the group’s website ahead of the usual 10 a.m. release time. The median forecast of 73 economists surveyed by Bloomberg called for a rise to a 4.51 million rate. Buoyed by cheaper properties and record-low mortgage costs, demand for real estate is bolstering the industry that helped trigger the recession. Minutes of the Federal Reserve’s latest meeting, due later today, will be a reminder that policy makers are monitoring data such as housing to determine whether the world’s largest economy needs more stimulus.
“This is a continuation of good news, but we’ve got to continue to build momentum,” said Brian Jones, a senior U.S. economist at Societe Generale in New York, who forecast sales would rise to 4.46 million. “The home sales numbers are going to continue to go higher. As much as the employment numbers aren’t great, they aren’t horrible either, so those that have jobs are feeling a little bit better about their situations.” Stocks were little changed, after the Standard & Poor’s 500 Index briefly topped a four-year high yesterday, as Japan’s exports slid and Greece sought more time on changes while investors awaited the Fed minutes. The S&P 500 Index fell less than 0.1 percent to 1,412.4 at 10:37 a.m. in New York.

U.S. Budget Deficit to Reach $1.1 Trillion in 2012, CBO Says (Source:Bloomberg)
The U.S. economy will probably tip into recession next year if lawmakers can’t break an impasse over the federal budget, according to a report. The nonpartisan Congressional Budget Office said today that scheduled tax increases and spending cuts in 2013 would reverse the modest economic recovery. Economic output would shrink next year by 0.5 percent, joblessness would climb to about 9 percent with “economic conditions in 2013 that will probably be considered a recession,” the agency said in a biannual report on the budget and economic outlook. “Whether lawmakers allow scheduled policy changes to take effect or alter them will play a crucial role in determining the path of the federal budget over the next decade and the outlook for the economy,” according to the report.
Congressional leaders have said they probably won’t consider until after the election the Bush-era tax cuts set to expire Dec. 31 or $1 trillion in automatic spending cuts that would begin taking effect in January. There is no sign of an agreement to avoid a so-called fiscal cliff, and the CBO report prompted partisan finger-pointing. The deficit will reach $1.1 trillion this year, about $100 billion less than CBO had projected in March, according to the report. That would be down from last year’s $1.3 trillion, in part because tax revenue has risen by almost 6 percent and spending is down by about 1 percent this year.

Confidence Returning as Revealed in Country Risk: Credit Markets (Source:Bloomberg)
From the U.S. to Germany and China, the risk of owning sovereign bonds has tumbled to the lowest in a year as the specter of another systemic crisis that drags down the world’s economy diminishes. The average cost of credit-default swaps insuring the debt of about 50 nations tracked by Bloomberg fell to 159 basis points, from as high as 250 basis points in November. Swaps on China are at the cheapest in five months, while Germany is at a 13-month low and the U.S. is at levels not seen since May. Confidence in government debt has improved since June amid mounting speculation that European policy makers will step up efforts to curb the region’s debt crisis and as reports from jobs to retail sales in the U.S. underpin growth. The rally strengthened when European Central Bank President Mario Draghi vowed on July 26 to do “whatever it takes” to save the euro and signaled that would include buying government bonds.
“All hopes are pinned very much on the ECB and that’s fueling the rally in sovereign credit,” said Nicholas Spiro, the managing director of Spiro Sovereign Strategy in London. “Europe is very much still the focal point for market anxieties and what happens in Europe has knock-on effects elsewhere.”

Zhou Signals China Rate Cut Possible After Injecting Cash (Source:Bloomberg)
People’s Bank of China Governor Zhou Xiaochuan said adjustments to interest rates and banks’ reserve requirements are still possible after the central bank stepped up temporary cash injections this month. “Use of either tool can’t be ruled out,” Zhou said to reporters today in Beijing when asked whether the recent frequent use of reverse-repurchase transactions means the PBOC will make less use of reserve-ratio and interest-rate tools. He didn’t elaborate. The remarks leave the door open for further monetary stimulus after the PBOC added 220 billion yuan ($34.6 billion) to the banking system via reverse-repurchase agreements yesterday, tempering speculation the reserve-requirement ratio will be reduced. China lowered interest rates in June and July for the first time since 2008 and has made three cuts in the ratio starting in November as economic growth slowed.
Chinese Premier Wen Jiabao said last week that easing inflation allows more room to adjust monetary policy and positive signs are emerging in the economy, expressing confidence after July data showed a further slowdown in growth. State television reported Wen as saying there’s “growing room for monetary policy operation.” At the same time, the nation’s slower-than-forecast cuts in banks’ reserve requirements show authorities are yet to shake their concern inflation will quicken, three months after Wen shifted priorities to boosting growth. China has left the reserve ratio for the biggest banks at 20 percent since mid-May and signaled it will maintain property-market restrictions to curb home-price gains.

Singapore Rich Seen Luring Issuers After IDBI Bond: India Credit (Source:Bloomberg)
IDBI Bank Ltd. (IDBI)’s record Singapore- dollar bond sale will prompt more Indian companies to tap increasing demand from wealthy private investors, the city’s top underwriter said. The Indian state-owned lender sold S$250 million ($200 million) of three-year notes to yield 3.65 percent, in the first offering by an Indian issuer in the currency since April 2011, according to data compiled by Bloomberg. The average yield on Singapore dollar corporate debt declined 32 basis points this year to 2.6 percent, HSBC Holdings Plc indexes show. Three-year rupee company borrowing costs are 9.46 percent, according to data compiled by Bloomberg. “IDBI’s bond shows the continued diversification of issuer types in Singapore’s bond market,” Clifford Lee, head of fixed income at DBS Group Holdings Ltd., the biggest arranger of the debt this year, said yesterday. “It does a lot for price discovery for Indian banks in the market and will definitely lead to other issuers following suit.”
Indian borrowers are returning to the overseas markets as yield premiums narrow. They sold the most U.S. dollar debt last week in more than a year, according to data compiled by Bloomberg. Singapore dollar bond sales are set to increase to an all-time high this year as the second-best-performing currency in Asia increases the appeal of the assets to private-wealth clients. Private banks bought 65 percent of IDBI’s notes, a person familiar with the matter said.

Spain Bailout Request May Not Impact Credit Rating, S&P Says (Source:Bloomberg)
Any request by Spain for a full sovereign bailout is unlikely to directly affect the nation’s credit rating as any aid may help the country continue fiscal reforms, Standard & Poor's said. A request would “constitute an official acknowledgment that the government is facing ongoing risks to financing itself in the capital markets at sustainable rates,” the ratings company said in a statement in Frankfurt today. “However, we think that the potentially advantageous terms” could “enhance the chances of success of Spain’s already ambitious and politically challenging fiscal and economic reform agenda.” Prime Minister Mariano Rajoy is considering requesting more aid from European rescue funds to help lower the nation’s borrowing costs. Spain has urged unlimited support from the European Central Bank after ECB President Mario Draghi announced proposals earlier this month to re-enter the bond market.
Spain is rated BBB+ at S&P, three levels above non- investment grade. It has a BBB rating at Fitch Ratings -- two levels above junk, while its Baa3 grade at Moody’s Investors Service is the lowest investment grade rating. The yield on Spain’s 10-year benchmark bond was at 6.27 percent today, after reaching a euro-era high of 7.75 percent on Aug. 25.

Last Man Standing Means Europe Investment Banks Resist Cuts (Source:Bloomberg)
Europe’s failure to resolve its sovereign-debt crisis will force investment-banking chiefs in the region to consider shuttering entire businesses rather than rely on piecemeal job reductions to revive profit. Dealmaking fees may drop 25 percent this year from 2009, when the crisis began in Greece, research firm Freeman & Co. estimates. European banks, including UBS AG and Barclays Plc (BARC), have cut about 172,000 positions since then, according to data compiled by Bloomberg, the same strategy they used after Lehman Brothers Holdings Inc. collapsed in 2008.
The game plan won’t work again as rising capital requirements and declining business alter the investment-banking landscape, investors and analysts say. New rules will reduce return on equity by 6 percentage points from about 14 percent in the first half of 2011, according to consulting firm Bain & Co. Banks that relied on record low interest rates and a flood of cheap funding from the European Central Bank to delay deciding which units to close will be compelled to make choices. “Investment banks have to shrink and do more than cut a little bit here and there,” said Lutz Roehmeyer, who helps oversee 10 billion euros ($12.5 billion) at Landesbank Berlin Investment in Berlin. “There’s too much politics and too little economics going on. They want to keep certain businesses for as long as possible.”

South African Inflation Slows for Third Month to 4.9% (Source:Bloomberg)
South African inflation slowed more than economists expected in July, reviving speculation policy makers will cut interest rates for a second time this year to spur the economy. The inflation rate fell to a 14-month low of 4.9 percent from 5.5 percent in June, Pretoria-based Statistics South Africa said on its website today. The median estimate in a Bloomberg survey of 18 economists was 5.2 percent. Prices rose 0.3 percent in the month. “It has opened up the chance for a September cut,” Peter Attard Montalto, an economist at Nomura International Plc. in London, said in a telephone interview today. “There is more disinflation to come from here.” The Reserve Bank cut its benchmark repurchase rate by half a percentage point to 5 percent last month, the first adjustment in 20 months, to help support growth in Africa’s biggest economy. Governor Gill Marcus said on July 29 further reductions are not automatic and should not be taken for granted, tempering expectations of another cut.
Today’s data has rekindled that speculation. The yield on the forward-rate agreement due in four months dropped 5 basis points to 4.88 percent after the data was published, indicating that traders are beginning to price in the chance of a cut in that period. The Monetary Policy Committee is set to make its next rate decision on Sept. 20.

Osborne Doing ‘Too Little’ to Boost Growth, U.K. Business Says (Source:Bloomberg)
U.K. business leaders urged Chancellor of the Exchequer George Osborne to do more to boost growth, arguing his government is doing “too little, too slowly.” A poll of 1,277 members of the Institute of Directors published today by the London-based business lobby group found a majority thought Prime Minister David Cameron and Osborne had been “ineffective” at reducing tax, tackling regulations on businesses and simplifying employment laws. The poll, which also found that more than four out of 10 companies have delayed at least one investment or employment decision this year due to uncertainty, was carried out between July 26 and Aug. 3. “We don’t want to see any slowdown in deficit reduction but we do want to see much more aggressive supply-side action,” IoD Chief Economist Graeme Leach told BBC 5Live radio today.
Osborne is under pressure after figures published yesterday showed Britain unexpectedly posted a budget deficit in July as corporation-tax receipts plunged, partly due to the closing of the Elgin gas field in the North Sea. While the drop in revenue was largely centered on company taxes, the U.K.’s struggle to climb out of a recession has raised concerns that the chancellor will miss his forecast for a deficit of 120 billion pounds ($190 billion) in the current fiscal year. Osborne has resisted demands to ease the pace of his fiscal squeeze, saying his plans have helped to insulate Britain from the euro-area debt crisis.

Spain debt costs drop as markets bet on ECB action (Reuters)
Spain's short-term borrowing costs dropped at auction on Tuesday as investors bet the European Central Bank will intervene on bond markets, but a lack of detail over when and how it will act meant yields remained punishingly high.

20120823 1013 Global Commodities Related News.

DTN Closing Grain Comments 08/22 14:50 : Quiet Day in Grains(source:CME)
It was a slow day in the grain complex with contracts closing modestly lower but well off session lows on spillover support from the sharply lower U.S. dollar index. Late in the day the FOMC minutes were released with Fed members in favor of implementing QE3 "fairly soon" if the economy doesn't show stronger improvement.

GRAINS: U.S. new-crop soybeans eased from new highs while corn and wheat also fell as markets paused after a surge caused by the worst U.S. drought in 56 years as a crop tour found the condition of some Midwest grains was not as bad as feared. (Reuters)

Pro Farmer: After the Bell Wheat Recap (source:CME)
Wheat futures faced pressure throughout the day, but the market settled high-range. Chicago wheat ended mixed with a downside bias; Kansas City and Minneapolis wheat closed roughly 1 to 4 cents lower. Ample U.S. wheat supplies mean the wheat market needs either spillover support from corn or a fresh dose of fundamentally supportive news to rally. Both were lacking today, which encouraged profit-taking following yesterday's strong gains.

Wheat Market Recap Report (source:CME)
December Wheat finished down 5 at 917, 4 1/4 off the high and 5 3/4 up from the low. March Wheat closed down 4 3/4 at 925 1/4. This was 5 1/4 up from the low and 3 3/4 off the high. December Chicago Wheat closed slightly lower on the day. Kansas City and Minneapolis wheat settled lower as well. Wheat found support on reports that the European Union soft wheat crop may produce 125 million tonnes for 2012/13 which is down 3% from 2011 but traders took profits early in the day on reports that hard red winter wheat areas are expected to see good rainfall in the next 7-10 days. The rainfall is expected to help topsoil conditions as farmers begin to plant next year's wheat crop. Farmers in Argentina will plant 3.6 million hectares of wheat for the 2012/13 marketing year. This was unchanged from a July estimate. Argentina wheat plantings have declined year over year due to better prices for other cash crops and frustration with the Argentina government wheat export quota system. The US Dollar traded slightly higher midday but the gains were erased after the FOMC minutes suggested that further monetary easing may be needed to jump start the US economy. The US Dollar turned lower for the remainder of the session and wheat climbed off it's session lows. December Oats closed down 1 1/2 at 395 1/2. This was 4 1/4 up from the low and 2 1/2 off the high.

Pro Farmer: After the Bell Corn Recap (source:CME)
Corn futures saw profit-taking pressure today, with futures ending 1 to 7 1/2 cents lower. While traders continue to be disappointed by results from the Pro Farmer Midwest Crop Tour, they spent the day reevaluating positions and took some profits out of the market. Traders will continue to watch for results from the Tour to gauge the urgency to ration remaining supplies. Traders will also look to tomorrow morning's weekly export sales data for signs of price rationing. Tonight, results from Illinois will be released on

Corn Market Recap for 8/22/2012 (source:CME)
December Corn finished down 4 at 834 3/4, 4 3/4 off the high and 6 1/2 up from the low. March Corn closed down 4 1/2 at 833 1/4. This was 5 3/4 up from the low and 5 1/4 off the high. December corn closed slightly lower on the day and well off session lows. Traders continue to monitor yield and condition reports as a large crop tour moves across the Corn Belt today. Early yield reports have been worse than expected, which has traders questioning if the US average corn yield could be near 121 bushels per acre vs. the current USDA estimate of 123.4. If achieved, production could fall to an 8 year low which would mean further demand cuts across the balance sheet. Ethanol production for the week ending August 17 averaged 823,000 barrels per day which is down 8.96% from last year. Total Ethanol production for the week was 5.76 million barrels vs. 5.73 the week prior. Corn used in last week's production is estimated at 87.67 million bushels which was the 4th consecutive week corn usage has increased. News that Argentina grain and vegetable oil exports have been halted for 3 days due to a strike offered support to the grain complex. The US Dollar traded slightly higher midday but the gains were erased after the FOMC minutes suggested that further monetary easing may be needed to jump start the US economy. The US Dollar turned lower for the remainder of the session and corn climbed off it's session lows. November Rice finished down 0.135 at 15.865, 0.035 off the high and equal to the low.

U.S. corn harvest underway in record fast start (Reuters)
The U.S. corn harvest, the world's largest, got off to the fastest-ever start last week as early planting last spring and a hot summer accelerated crop development, a U.S. government report showed on Monday.

Corn, Soy Drop as Indiana Shows Less Drought Damage; Wheat Falls (Source:Bloomberg)
Corn and soybean futures declined on speculation that the worst U.S. drought since 1956 caused less crop damage than the government expected in Indiana, the nation’s fifth-largest grower. Wheat also fell. Field surveys conducted yesterday during the annual Professional Farmer Crop Tour showed corn production may reach 113.3 bushels an acre, compared with an Aug. 10 forecast of 100 bushels by the U.S. Department of Agriculture. Soybean-pod counts from yesterday’s samplings showed a 9.2 percent drop from last year, implying a yield drop from last year to 40.9 bushels an acre. The USDA forecast 37 bushels on Aug. 10. “We were expecting to see a train wreck in the fields, and this isn’t quite the train wreck we were expecting,” Mike Zuzolo, the president of Global Commodity Analytics & Consulting in Lafayette, Indiana, said by telephone. “This calls into question whether the USDA will have to lower its production estimate next month.”
Corn futures for December delivery declined 0.5 percent to settle at $8.3475 a bushel at 2 p.m. on the Chicago Board of Trade. The price yesterday reached $8.40, the highest since touching a record $8.49 on Aug. 10. The most-active contract is up 65 percent since mid-June. Soybean futures for November delivery fell 0.3 percent to $17.2775 a bushel on the CBOT, after reaching a record $17.3425. The price is up 31 percent since June 15. Wheat futures for December delivery slumped 0.5 percent to $9.17 a bushel in Chicago, the first decline since Aug. 14.

China July corn imports surge on stockpiling spree (Reuters)
China's corn imports rose in July for the third month to hit a six-month high, as the state stockpiler and commercial traders in the world's second-largest consumer took advantage of cheap prices in the second quarter to bolster their stocks.
Thai Rice Haul Seen Winning Votes as Sales Drop: Southeast Asia (Source:Bloomberg)
For Thai Prime Minister Yingluck Shinawatra’s ruling party, keeping the farmers that form its political base happy is more important than retaining the country’s 30-year position as the world’s top rice exporter. Shippers including the 100-year-old Kamolkij Group and opposition politicians have vilified the government’s policy to buy rice at above-market rates, saying the measure is putting exporters out of business and encouraging corruption. Officials say the price-support stance is boosting the economy and helping the third of the population that depends on rice farming. “Ninety-nine out of 100 want the government to continue this rice program,” Commerce Minister Boonsong Teriyapirom said in an interview last week. “The more success we receive from this policy means a worse scenario for the opposition.”
Parties linked to Yingluck’s brother, former Prime Minister Thaksin Shinawatra, have won the past five elections on support from rice-growing areas that are poorer and more populous than the rest of Thailand. While the rice policy helped the country’s gross domestic product expand more than expected in the second quarter, its ability to sustain that growth remains in doubt. “In the long run, if the program is kept as is, it will impact the fiscal policy space and therefore pose a risk to the ability to spend on infrastructure,” said Santitarn Sathirathai, a Singapore-based economist at Credit Suisse Group AG. “The key question is whether there are better ways to spend 1 percent of GDP worth of money on more growth enhancing and equality-improving activities.”

SOFTS: Raw sugar futures on ICE were slightly higher, trimming losses after the previous session's sell-off, as dealers anticipated dry weather will have aided the acceleration of top grower Brazil's harvest in recent weeks. Cocoa was steady, with dealers monitoring the development of West Africa's main crop, while coffee slipped. (Reuters)

Vietnam Coffee-Sellers avoid forward deals, prices stable (Reuters)
Vietnamese coffee exporters are reluctant to offer fresh beans for loading in coming months because they are wary about fluctuating prices while thin domestic stocks and slack demand have prevented trade from picking up, traders said on Tuesday.

China Economy’s Harsh Winter to Hurt Cotton, Commodities (Source:Bloomberg)
Cotton consumption in China, the world’s largest user, may shrink 11 percent this year as a deteriorating economy hurts demand and causes a buildup in commodities, according to Weiqiao Textile Co. (2698) Futures fell. “The Chinese economy is only at the beginning of a harsh winter,” Zhang Hongxia, chairman of China’s largest cotton- textile maker, said in an interview in Hong Kong on Aug. 20. “China now is facing a situation where everything from coal to steel inventories are piling up.” Zhang’s outlook runs counter to forecasts from banks such as Goldman Sachs Group Inc. that forecast a second-half rebound as the government expands stimulus. China’s economy grew at the slowest pace in three years in the second quarter as Europe’s debt crisis hurt exports and a government drive to cool consumer and property prices damped domestic demand. Cotton for December delivery declined as much as 1.6 percent on ICE Futures U.S.
“The slowdown in China is due to overall industrial overcapacity accumulated in recent years,” said Lou Zhi, head of the trading department at Hunter Capital Ltd., a Dalian-based commodity hedge fund. “Overseas demand is unlikely to revive soon as the European debt crisis looks set to drag on. Despite a recovery in the U.S., growth there seems anemic.” Cotton usage may drop to 8 million metric tons this year, compared with consumption of about 9 million tons in 2011, according to Zhang, who had forecast in March that 2012 demand may increase to as much as 9.5 million tons. China accounts for about 40 percent of global cotton consumption.

Oil Trades Near Three-Month High on U.S. Stockpiles, Fed Minutes (Source:Bloomberg)
Oil traded near the highest level in more than three months after U.S. stockpiles declined more than analysts forecast and minutes from the Federal Reserve showed many policy makers backed more monetary easing. Futures were little changed in New York after climbing for a second day yesterday. Crude inventories shrank 5.4 million barrels last week, the Energy Department said in a report. They were projected to drop 250,000 barrels, according to a Bloomberg News survey. Members at the Federal Open Market Committee’s gathering that ended Aug. 1 indicated monetary easing will be needed “fairly soon” unless there are signs of a durable economic pickup, the minutes showed yesterday. Oil for October delivery was at $97.31 a barrel, up 5 cents, in electronic trading on the New York Mercantile Exchange at 9:16 a.m. Sydney time. The contract yesterday climbed 42 cents, or 0.4 percent, to $97.26, the highest close since May 7. Prices are 1.5 percent lower this year.
Brent oil for October settlement gained 27 cents, or 0.2 percent, to $114.91 a barrel on the London-based ICE Futures Europe exchange yesterday. The European benchmark grade’s premium to West Texas Intermediate closed at $17.65. Gasoline inventories in the Energy Department report fell 962,000 barrels versus a forecast decrease of 1.35 million barrels. Distillate supplies, which include heating oil and diesel, rose 992,000 barrels, near the predicted gain of 1 million. The Fed’s minutes showed that many participants said a new large-scale asset-purchase program “could provide additional support for the economic recovery.” The central bank will pump fresh stimulus into the economy if needed to spur growth and cut the jobless rate, it said in a statement after the meeting.

OIL-Oil slips on euro zone uncertainty, Mideast eyed
LONDON, Aug 22 (Reuters) - Oil eased below $114 a barrel as investors held out hope that Europe would overcome its debt crisis while Middle East tension kept the potential for supply disruption in focus.
There "might just be a little bit of profit-taking, given that we're up at lofty levels and all we've got (from Europe) at the moment is dialogue, but they haven't got any action or any follow-through," said Ben Le Brun, a Sydney-based market analyst at OptionsXpress.

Japan LNG imports rise for 16th month in July
TOKYO, Aug 22 (Reuters) - Japan's customs-cleared liquefied natural gas imports rose 11.6 percent in July, the 16th straight monthly rise, as power stations burned more gas after the Fukushima crisis shut most of the country's nuclear capacity.
Japan, the world's biggest buyer of LNG, imported 7.15 million tonnes of the fuel last month, according to preliminary data released by the Ministry of Finance on Wednesday.

Euro Coal-Steady as Atlantic supplies improve
LONDON, Aug 21 (Reuters) - Physical prompt coal prices in Europe were steady between $90 and $95 a tonne on Tuesday as a healthy level of supply following the end of a Colombian rail workers strike balanced against the effect of rising oil prices.
The Colombian rail strike, which last nearly a month, led to supply squeezes in the Atlantic basin early in August, but analysts said the seaborne Atlantic coal market would return to a surplus by the end of August as Colombia ramps up exports.

China July coal imports down 10 pct from June's record -customs
SHANGHAI, Aug 21 (Reuters) - China's coal imports in July dropped 10.3 percent from the record high purchases in the previous month, but shipments by the world's top producer and consumer of the fuel were still up from year-ago levels, official customs data showed on Tuesday.
The monthly fall in July imports to 20.22 million tonnes was mostly due to an easing of coking coal shipments, which had doubled in June on strong shipments from Mongolia and the United States. Coking coal is used as a raw material for steel making.

Chinese steel mills default, defer iron ore shipments
SINGAPORE/SHANGHAI, Aug 22 (Reuters) - Chinese steel mills, burdened by poor demand at home, have either defaulted on supply contracts or deferred shipment of up to 4 million tonnes of iron ore this month following a rapid fall in prices, traders said.
Bulk of the volume, equivalent to the load of 24 capesize vessels, have found their way into the spot market, adding pressure to iron ore prices that have slumped 23 percent so far this year -- perhaps the hardest hit by the slowdown at its biggest consumer, China.  

Global steel output rebounds in July -Worldsteel
LONDON, Aug 21 (Reuters) - Global crude steel production rose in July, reversing direction after a slight fall in June, data from industry body Worldsteel showed on Tuesday, with the sector anticipating a pick-up in demand following the end of the slow summer period.
Global output rose by 2 percent to 130 million tonnes in July, compared to the same month a year earlier, according to the World Steel Association (Worldsteel).

Iron Ore Price to Rebound as China Seeks Cheaper Imports (Source:Bloomberg)
A plunge in iron ore prices and shipping costs means it’s cheaper for Chinese steel mills to buy the material from Brazil more than 8,000 nautical miles away than to buy the lower-grade ore being dug in their own backyard. China’s iron ore output had the steepest decline in July in four years, signaling the world’s largest metals consumer is poised to boost purchases from producers such as Brazil’s Vale SA (VALE) and Rio Tinto Group. Stronger demand may push iron ore higher, with the spot price set to gain as much as 41 percent in the fourth quarter after touching a near-three-year low today, according to estimates compiled by Bloomberg. “We’re using almost all imported ore to feed our furnaces now as prices have become more appealing,” Wang Liancheng, an international trading manager of Hebei Tianzhu Iron & Steel (Group) Co., said by phone from Tangshan. The company, which used to buy a quarter of its needs domestically, has switched to ore from South Africa, Australia and Brazil, he said.
China’s Premier Wen Jiabao is overseeing $23 billion of investment in new mills to stimulate auto-making and housing, which will boost demand for iron ore and help revive the nation’s flagging economy, which grew at the slowest pace since 2009 in the second quarter. Ore prices may rebound as soon as next month because of declining stockpiles in China and the nation’s rising demand for construction, Vale, the world’s largest iron-ore producer, said this month.

Iron Ore-Shanghai steel hits record low as demand wanes
SINGAPORE, Aug 21 (Reuters) - China steel futures fell for a seventh consecutive session to a record low on Tuesday, pressured by waning demand in the world's top steel market that has thinned appetite for iron ore, dragging it below $110 a tonne, a level last seen in 2009.
The price of iron ore has fallen in all but three trading days over the past six weeks as Chinese steel mills curbed purchases on expectations that rates could fall further while steel prices struggled.

Pimco Fund Expands Gold Holding on Outlook for Inflation (Source:Bloomberg)
Pimco Commodity Real Return Strategy Fund has expanded its holding of gold as a hedge against inflation, anticipating further moves by central banks to spur economic growth, said Nic Johnson, the fund’s manager. The $20 billion fund increased its gold holdings to 11.5 percent of total assets from 10.5 percent two months ago, Johnson said today in a telephone interview from Newport Beach, California. The commodity fund is part of Pacific Investment Management Co., which also owns the world’s largest bond fund. “We think gold is going to perform in a positive correlation to changes in inflation,” Johnson said. “We see higher inflation because of rising commodity prices, unconventional monetary policies and increasing sovereign debt.”
Gold rallied in New York today to the highest price since May 2 after Federal Reserve policy makers issued the minutes from their July 31-Aug. 1, which indicated the Federal Open Market Committee may expand monetary stimulus to bolster the economy. Gold futures for December delivery rose as high as $1,658.20 an ounce on the Comex. The precious 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. Gold advanced in the past two months amid speculation that China, the U.S. and Europe may take more steps to boost economic growth.

The Baltic index weighed by lower capesize rates
Aug 21 (Reuters) - The Baltic Exchange's main sea freight index, used to measure rates for ships carrying dry commodities, continued to fall on Tuesday due to lower capesize rates.
The main index, which factors in the average daily earnings of capesize, panamax, supramax and handysize dry bulk transport vessels, dropped 2 points to 709 points, a low last seen in February this year.

20120823 1013 Soy Oil & Palm Oil Related News.

ITS CPO export up 5.95% to 809,814 tonnes for the period of 1~20 Aug 2012.

Pro Farmer: After the Bell Soybean Recap (source:CME)
Soybean futures ended mid- to high-range with September through March futures steady to 5 1/2 cents lower and deferred months 2 3/4 to 6 3/4 cents firmer. Soymeal posted losses while soyoil ended with gains for the day amid spreading. Yesterday, disappointing Pro Farmer Midwest Crop Tour pod counts pushed the soybean market to new contract highs. While these concerns remain close at hand, reports of relatively better results today (though far from "good") and a firmer dollar for much of the day encouraged traders to book some profits.

Soybean Complex Market Recap (source:CME)
November Soybeans finished down 4 3/4 at 1727 3/4, 6 1/2 off the high and 12 1/4 up from the low. January Soybeans closed down 5 1/2 at 1715. This was 11 up from the low and 7 1/2 off the high. December Soymeal closed down 4.8 at 519.7. This was 3.9 up from the low and 6.1 off the high. December Soybean Oil finished up 0.61 at 56.83, 0.16 off the high and 1.16 up from the low. November soybeans traded lower into the closing bell and settled off session lows. Soybean meal was lower on the day but soybean oil traded sharply higher, posting a new high for the move. Soybeans continue to see support from strong export demand and questionable yields across the Corn Belt. News that Argentina grain and vegetable oil exports have been halted for 3 days due to a strike offered support to the grain and oilseed complex. The US Dollar traded slightly higher midsession which offered resistance to price gains but dovish comments by the FOMC turned the US Dollar lower and commodity prices recovered into the closing bell. Early yield reports from a large crop tour have been worse than expected for some areas, but rainfall and cooler temperatures in early August have benefited portions of the soybean crop. The trade feels the average US soybean yield could be near 36.5 bushels per acre vs. the August USDA estimate of 36.1. If attained, this could mean total supply for 2012/13 of 2.7 billion bushels.

Brazil forward soy sales steady, could rise on high prices (Reuters)
Forward sales of Brazil's 2012/2013 soybean crop held nearly steady with a week ago, local analyst Celeres said on Monday, though mounting evidence of severe damage to the U.S. crop drove prices to a one-month high.

EDIBLES: Malaysian crude palm oil futures rose to a one-month high, chasing gains in the soybean oil market after reopening from a long weekend break and getting support from exports. (Reuters)