Thursday, September 6, 2012

20120906 1836 FCPO EOD Daily Chart Study.

FCPO closed : 2948, changed : -42 points, volume : higher.
Bollinger band reading : pullback correction little upside biased.
MACD Histogram : weakening, buyer leaving as seller testing market.
Support : 2920, 2900, 2850, 2800 level.
Resistance : 2950, 2970, 3020, 3050 level.
Comment :
FCPO closed recorded loss for the 3rd day with better volume participation. Soy oil currently trading lower after over closed recorded small loss while crude oil price currently recording 1% gains.
Price continue to head south on rising stockpile worries after industry expert suspect that Indonesia inventory level may be much higher than estimated.
Daily chart reading adjusted to suggesting a pullback correction little 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.

20120906 1721 FKLI EOD Daily Chart Study.

FKLI closed : 1611.5 changed : -23.5 points, volume : higher.
Bollinger band reading : downside biased with possible pullback correction.
MACD Histogram : resume falling, seller taking exposure.
Support : 1600, 1595, 1590, 1575 level.
Resistance : 1615, 1623, 1630, 1640 level.
Comment :
FKLI closed fell severely recorded huge losses with rising volume distributed doing 6.5 points discount compare to cash market that also plunge significantly lower. Overnight U.S. market closed mixed and today Asia markets ended  rebounded little higher while European markets currently trading higher.
Asia and Europe market rebounded as investors await ECB meeting on bond buying program announcement and news on China approved subway infrastructure project plan for 18 cities.
Back home, FKLI daily chart reading revised to suggesting a downside biased market development with possible pullback correction.
When to buy : buy at support or weakness with quick cut loss and profit target.
When to sell : sell at resistance or strength with quick cut loss and profit target.

20120906 1729 Palm Oil Related News.

Palm-Oil Veteran Mistry Exposes Indonesia’s ‘Hidden’ Reserves
By Swansy Afonso 2012-09-06 03:30:00.0 GMT

     Sept. 6 (Bloomberg) -- Palm-oil reserves in Indonesia, the
largest producer, may total about 4 million metric tons, twice
as much typically estimated, according to Godrej International
Ltd., which forecast a rise in Malaysian stockpiles to a record.
     “It is difficult to be bullish on palm-oil prices,” Dorab
Mistry, a director at Godrej International Ltd., told a
conference in Singapore today, citing the stockpiles, slower
economic growth and rising output. The tropical oil may trade
between 2,900 ringgit ($930) and 3,300 ringgit a ton this month
and next, he said. The most-active contract closed at 2,990
ringgit on the Malaysia Derivatives Exchange yesterday.
     The reserves in the two largest producers may limit price
gains even as soybeans, which can be crushed to produce a rival
oil, are poised to extend a record rally after drought curbed
supplies. Benchmark palm oil in Malaysia has dropped 5.8 percent
this year, helping restrain gains in global food costs spurred
by the worst U.S. drought in more than half a century.
     “The big story of 2012” is the stockpiles in Indonesia,
Mistry told the gathering organized by Goldman Sachs Group Inc.,
according an advance copy of his remarks “Normal stocks of palm
products in Indonesia in the last two years have been of the
order of 3.5 to 4 million tons as against the normal
conventional guesstimate of 1.5 to 2 million tons.”
     Palm oil, the world’s most-consumed vegetable oil, is used
in everything from instant noodles to soaps and biofuels. Mistry,
born in India and based in London, has traded vegetable oils for
more than three decades.

                         Soybeans Rally

     Palm oil has dropped in 2012, extending last year’s 16
percent fall, while soybeans rallied 43 percent. The divergence
has widened palm oil’s discount to soybean oil to as much as
$320 a ton on Sept 5, the biggest difference since 2008,
according to data tracked by Bloomberg.
     “These hidden, or hitherto ignored, palm-oil stocks in
Indonesia are the key reason for the dismal performance of palm
oil,” said Mistry, who said he looked into Indonesian holdings
after tax changes in 2011. “Until recently, it has been the
opinion of most analysts that Indonesia hardly kept palm-oil
stocks and that Malaysian palm-oil stocks were the bigger.”
     Palm-oil stockpiles in Malaysia probably rose to an 11-
month high of 2.14 million tons in August from 2 million tons in
July, according to the median in the Bloomberg survey of
analysts and plantation companies yesterday. Inventories reached
a record 2.27 million tons in November 2008, according to data
from the nation’s Palm Oil Board. Mistry didn’t give an estimate.

                       Production Outlook

     Output in Malaysia may gain to about 2 million tons in
September and October driven by a seasonal upswing, and 2012
production may be 18.2 million tons, Mistry said. Indonesian
production may peak in November, with annual output of about 27
million tons compared with 25.2 million tons last year, he said.
     “A big chunk of stockpiles in Indonesia are due to the
very tardy logistics,” said Mistry. “It can take up to two
months for the fresh-fruit bunches harvested in Kalimantan to be
converted into refined palm products and exported,” Mistry said.
Kalimantan is the Indonesian portion of Borneo Island.
     Soybean may rally to as much as $20 a bushel in December,
according to Mistry, while corn may gain to about $9 a bushel.
The most-active soybean contract reached an all-time high of
$17.89 on the Chicago Board of Trade on Sept. 4, while corn
reached a record $8.49 a bushel on Aug. 10.

20120906 1727 Regional Markets EOD Daily Chart Study.

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

20120906 1637 Global Markets & Commodities Related New.

GLOBAL MARKETS: Asian shares rose and the euro edged back towards the previous session's high on reports that the European Central Bank will buy unlimited amounts of short-term sovereign bonds to cap surging borrowing costs in indebted euro zone states. European shares looked set to gain, having flirted with one-month lows in the previous session, with investors likely to shun big bets in the run-up to a European Central bank meeting at which they hope details of a new bond-buying plan will be announced. U.S. stocks closed out a second straight session of thin trading on Wednesday, with investors reluctant to make big bets ahead of a crucial meeting of the European Central Bank, which could announce new policies to help contain the euro zone's debt crisis. (Reuters)

FOREX-Euro rests near 2-month high, pinning hopes on ECB
TOKYO, Sept 6 (Reuters) - The euro held firm near its two-month peak having rallied sharply the previous day on renewed hopes that the European Central Bank may employ new tactics to counter the region's perennial debt crisis.
"The euro could gain further if the ECB does not cut rates today given that some market players have been expecting a rate cut, even though latest media reports suggest a rate cut is not on the cards this time," said Yunosuke Ikeda, senior FX strategist at Nomura.

FOREX: The euro held firm near its two-month peak in Asia, having rallied sharply the previous day on renewed hopes that the European Central Bank may employ new tactics to counter the region's perennial debt crisis. (Reuters)

Draghi to deliver bond plan at crunch ECB meeting(Reuters)
European Central Bank chief Mario Draghi faces the most decisive moment of his presidency on Thursday when he tries to heal divisions among policymakers and deliver on his promise to save the euro.

Australia employment dips, jobless also down (Reuters)
Australian employment dipped unexpectedly in August even as the jobless rate also surprised by dropping to a three-month low of 5.1 percent, a mixed result that did nothing to alter expectations of more rate cuts.

G20 should coordinate to avoid food price panic(Reuters)
To avoid exacerbating shortages and price spikes, G20 nations must avoid grains export limits and panic buying after a U.S. drought devastated crops and Russian wheat supplies have fallen, a farming official from No. 2 soy grower Brazil said on W edn esday.

GRAINS: Chicago soybeans lost more ground, sliding to a one-week low as the start of the U.S. harvest weighed on prices amid reports of rains improving yields of the late planted crop. (Reuters)

U.S. says 49.33 pct oil output shut in US Gulf due to Isaac(Reuters)
U.S. regulators said 49.33 percent of daily oil production and 25.71 percent of daily natural gas output in U.S.-regulated areas of the Gulf of Mexico remained shut on Wednesday due to Hurricane Isaac, remnants of which re-entered the northern Gulf Wednesday.  

OIL: Brent futures climbed above $113 per barrel, with investors hoping the European Central Bank will announce details of how it plans to tackle the euro zone's debt crisis at a meeting later in the day.(Reuters)

S.Africa's Implats gets new wage demand from workers(Reuters)
South Africa's Impala Platinum, the world's second-largest platinum producer, has received new wage demands from a workers' committee made up of members of mining unions.

BASE METALS: London copper prices slipped but did not stray too far from a 1-1/2 month high scaled in the prior session on hopes the European Central Bank will unveil a new bond buying plan to combat the region's debt crisis at a meeting later in the day. (Reuters)

PRECIOUS METALS: Gold tracked the euro higher, staying within sight of its highest in nearly six months ahead of a meeting of the European Central Bank later in the day that could bring the announcement of new policies to help contain the euro zone's debt crisis. (Reuters)

METALS-Copper buoyed by stimulus hopes before ECB meet
SINGAPORE, Sept 6 (Reuters) - Shanghai copper rose to its highest in more than three months on Thursday, while London prices held near a 1-1/2-month top on hopes the European Central Bank will unveil a new plan to combat surging borrowing costs in indebted euro zone states.
"In the short term, decisive actions by the ECB will boost copper prices, but the medium-to-long term fundamentals will weigh on market sentiment," said Zhang Ao, an analyst at Minmetals Futures in the southern Chinese city of Shenzhen.

PRECIOUS-Gold at 6-mth high ahead of ECB meeting, U.S. payrolls
SINGAPORE, Sept 6 (Reuters) - Bullion tracked the euro higher on Thursday and rose to its highest since March ahead of a meeting of the European Central Bank later in the day that could bring the announcement of new policies to help contain the euro zone's debt crisis.
"There's a lot of event risk in the market at the moment. People seem to be positioning for a relatively positive outcome from the ECB, and that's probably why we are testing $1,700 right now," said Nick Trevethan, senior metals strategist at ANZ in Singapore.

20120906 1114 Global Markets & Commodities Related News.

GLOBAL MARKETS-Stocks edge up, euro holds ground on ECB hopes
SINGAPORE, Sept 6 (Reuters) - Asian shares edged up on Thursday and the euro held the previous session's gains made after reports that the European Central Bank will buy unlimited amounts of short-term sovereign bonds to cap surging borrowing costs in indebted euro zone states.
"This meeting is absolutely crucial, because expectations are extremely high. If the ECB does not deliver, we will get into another bad patch," said Gilles Moec, senior European
economist at Deutsche Bank.

OIL-Brent falls, U.S. crude up awaiting ECB, jobs data
NEW YORK, Sept 5 (Reuters) - Brent crude prices fell on Wednesday, while U.S. crude inched up in seesaw trade ahead of a European Central Bank meeting and a U.S. August payrolls report as investors await central bank action in the face of slowing economic growth.    
"Uncertainty about the ECB, after Bernanke's speech didn't provide any stimulus announcement, and the U.S. jobs report on Friday, has kept caution in a market that has bulls looking for a reason to push higher," said Gene McGillian, analyst at Tradition Energy.

NATURAL GAS-U.S. natgas futures end down 2 pct on milder weather
NEW YORK, Sept 5 (Reuters) - U.S. natural gas futures ended lower for the first time in five trading days on Wednesday, sliding 2 percent amid longer-term forecasts calling for milder autumn weather for consuming regions of the nation.
"The natural gas market is seeing some profit taking off recent gains, with updated temperature forecasts taking away some of the cooling demand from Tuesday's projections," said Citi Futures energy analyst Tim Evans.

EURO COAL- Dips, market braces for further fall
LONDON, Sept 5 (Reuters) -    Physical coal prices in Europe trickled lower by 10 cents a tonne on Wednesday but traders said they were set for further falls because the drop in supply has been outpaced by shrinking spot demand.
"The Chinese are doing virtually nothing spot, the usual big traders there are stuck with massive inventories they bought at much higher prices and they also have no buyers," one European trader said.

20120906 1037 Local & Global Economy Related News.

Malaysia  slipped by four notches to 25th position in the latest  Global Competitiveness Report 2012-2013. The report which was released by the Geneva-based World Economic Forum (WEF) however marked Malaysia as being within the top 20% of the 144 competitive countries in the world.   Korea, Luxembourg, UAE and New Zealand overtook Malaysia this time round although Malaysia's scores slipped marginally compared to the previous report.  The top 10 countries are Switzerland, Singapore, Finland, Sweden, Netherlands, Germany, the US, the UK, Hong Kong and Japan. Among Asean countries, Malaysia has retained its second spot. Among 22 Asia Pacific countries, Malaysian ranked eighth, ahead of China, India and other Asean countries except Singapore. WEF also upgraded Malaysia's stage of development as transition towards Innovation-driven from efficiency-driven previously. (BT, Bernama)

The Ministry of Finance (MOF) has accepted for implementation 24 of the 57 suggestions on the  draft Goods and Services Tax (Amendment) Bill 2012. In a statement, MOF said the suggestions were received during the public consultation exercise held from 2 July to 27 July. They will be incorporated into the revised Goods and Services Tax (Amendment) Bill 2012 or IRAS' e-Tax guides.  The remaining suggestions were not accepted for implementation as they are inconsistent with the policy objectives for the proposed legislative changes or legislative drafting conventions. The draft Goods and Services Tax (Amendment) Bill 2012 proposed legislation to put into effect tax changes announced in Budget 2012, as well as changes arising from the periodic review of the Goods and Services Tax system. The key changes include GST exemption on the import and supply of investment-grade gold and precious metals and a new Approved Refiner and Consolidator Scheme to relieve cashflow for refiners and local consolidators of precious metals, and enable them to claim input tax to make the first exempt supply of investment-grade precious metals after refining. Other changes include extension of the scope of GST zero-rating of prescribed financial services relating to goods situated outside Singapore, allowing the comptroller and minister to set conditions when granting GST remission, extension of the temporary removal scheme to goods that are removed temporarily from approved warehouses for repairs and allowing zero-rating of repair services performed on qualified goods outside the approved specialised warehouse. (Bernama)

Bank Negara Malaysia said the introduction of the Financial Consumer Alert List is to provide the people with a quick  reference and guide to make decisions on various financial services offered by non-licencees. The list essentially refers to the list of unregulated individuals or companies which have been mistaken as being licensed or permitted by regulators, including the Securities Commission, Domestic Trade, Cooperatives and Consumerism Ministry, Companies Commission Malaysia and Cooperative Commission of Malaysia on their business transactions. (Bernama)

The Malaysia Productivity Corp (MPC) hopes the government will increase its allocation under Budget 2013 to enable it to undertake initiatives and steps to boost the nation's competitiveness. Its director-general, Datuk Mohd Razali Hussain, said the nation's competitiveness needed to be further improved so that whatever initiatives and steps would be able to be implemented efficiently and productively. "If the request for higher allocation is approved, it will be used solely for sectors under the National Key Economic Areas (NKEA)," he said. (Bernama)

US total vehicle sales  came in at an annualized rate of 14.5m units in Aug (14.1m in Jul) on the back of gains in domestic cars and trucks. Economists expected a 14.3m reading. (Bloomberg)

US non-farm productivity  rose 2.2% qoq in 2Q12 (1.6% in the initial estimate; -0.5% in 1Q12), better than consensus of 1.9%.  Unit labour costs grew 1.5% qoq (1.7% in the earlier estimate; 6.4% in 1Q12), better than economists’ expectations of 1.4%. (Bloomberg)

US MBA purchase applications index fell 0.8% wow in the 31 Aug week (+1.0% in the earlier week), whilst the  refinance index  declined 3.0% wow (-6.0% in the prior week). (Bloomberg)

The US ICSC-Goldman Store Sales index fell 0.4% wow in the 1 Sep week (+0.5% in the earlier week), whilst on a yoy basis, the measure gained 3.7% (3.4% in the prior week). (Bloomberg)

European Central Bank President Mario Draghi’s bond-buying proposal  involves unlimited purchases of government debt that will be sterilized to assuage concerns about printing money, two central bank officials briefed on the plan said. (Bloomberg)

Eurozone Purchasing Managers Index (PMI) came in at a final 46.3, down from an initial estimate of 46.6 and the 46.5 figure in Jul. Any reading below 50 indicates contraction in activity. (CNA)

Eurozone producer prices gained 0.4% mom  in Jul, reversing the  -0.5% recorded in Jun, whilst on a yoy basis, the measure gained 1.8%, matching Jun’s pace. (Bloomberg)

The  HSBC China Services PMI weakened to 52 in Aug from 53.1 in Jul. (Bloomberg)

China revised up its 2011 gross domestic product to 9.3%, from an initial reading of 9.2%, the statistics bureau said, adding that the world's No. 2 economy was worth Rmb47.3tr last year. (Reuters)

Japan’s labour cash earnings  fell 1.2 yoy in Jul (-0.4% in Jun), whilst manufacturing overtime  hours worked gained 1.4% yoy (6.1% in Jun). (Bloomberg)

Japan’s monetary base was up 6.5% yoy in Aug (8.6% in Jul). (RTTNews)

Russian President Vladimir Putin said the country's future depended on Asia  and promised to showcase "a nation of opportunities" at this week's Asia-Pacific Economic Cooperation summit. (AFP)

Chile wants to strike new free trade deals with Hong Kong, Indonesia and Russia at the upcoming Asia-Pacific Economic Cooperation (APEC) summit in Vladivostok, its president Sebastian Pinera said. (AFP)

Singapore has maintained its ranking as the  second most competitive economy behind Switzerland, according to the  World Economic Forum Global Competitiveness Report 2012-2013. The US fell to seventh position from fifth in the global ranking, whilst Thailand's ranking rose one place to 38th to break a six-year streak of declines. (AFP, WSJ, Bangkok Post)

The Bank of Thailand has kept its benchmark interest rate unchanged for a fifth straight month after the economy rebounded, resisting calls from the government for lower borrowing costs. (Bangkok Post)

Thailand’s Central Wage Committee will implement the  THB300 minimum daily wage across the country from Jan 2013. (Bangkok Post)

Thailand’s unemployment rate for 2Q12 has risen to 0.92%, or 360,000 people,  the Labour Ministry reported, from 0.66% or 260,000 in 1Q12. (Bangkok Post)

Indonesia’s consumer confidence index improved to 115.7 in Aug from 113.5 in Jul. (Bloomberg)

Indonesia’s Ministry of Trade projects  2013 export to grow 5% to 10% from this year, if there is a recovery of global economy. (IFT)

Bank Indonesia has warned commercial banks not to use  non-collateral loans, locally known as KTA, as a method to finance customers who were unable to pay the required downpayment. It will soon verify whether banks have complied with the rules of disbursing loans. (Jakarta Post)

Indonesia will raise renewable energy prices for electricity to encourage overall renewable energy production. The price of geothermal electricity is now up to between 10 and 18.5 US cents per kWh from 9 cents per kWh, biomass electricity to Rp975 (10 cents) and Rp1,050 per kWh, from Rp656 per kWh. It is drafting another regulation that will similarly increase the price of hydro electricity from Rp656 per kWh to between Rp975 and Rp1,050 per kWh. (Jakarta Post)

Indonesia's central bank governor forecast 2012 full year economic growth at 6.4%, rising to 6.6% the following year. Inflation will stand at 4.7% in 2012, edging up to 4.8% in 2013, while the rupiah would maintain a range of Rp9,200-9,400 until the end of 2012 and between Rp9,300-9,500 in 2013. (Reuters)

Vietnam's ICT sector earned a revenue of US$13.7bn in 2011, registering a 79% yoy increase, according to the Ministry of Information and Communication (MIC). (Vietnam News)

Inflation in the Philippines quickened to 3.8% yoy in Aug (3.2% in Jul), faster than market expectations of a 3.5% rise. (Bloomberg)

South Korea's economy grew a seasonally adjusted 0.3% qoq in 2Q12, revised data showed, slightly worse than previously estimated and down from a 0.9% rise in the first quarter. (Reuters)

Details of rules on private investment in State-monopolized sectors in China will be published before the end of Jun, with a focus to widen market access to stimulate the vitality of private capital. (China Daily)

Soufun reported new home sales in 34 out of 40 large cities monitored across China have seen a mom increase from Apr to May. (China Daily)

20120906 1037 Malaysia Corporate Related News.

Maxis and Astro Malaysia Holdings will team up to develop and co-market consumer packages for their existing and potential customers, with the first phase of products to be launched by year-end. Maxis will be the fibre broadband service provider to expand Astro's B.yond IPTV service footprint and Astro will be the IPTV service provider for all Maxis fixed and wireless platform. As at end of June, the mobile operator has 9,352 Home Fibre Internet and more than 27,000 Home Wireless Internet subscribers. Astro Malaysia CEO Datuk Rohana Rozhan said, "Our collaboration with Maxis gives us an additional 1.3 million fibre homes passes as immediately addressable market for Astro B.yond IPTV," she said. From the 1.3m fibre homes passes, more than 1m are Astro subscribers. Maxis joint chief operating officer Mark Dioguardi said the plans to launch its own IPTV services have been called-off and Maxis will now offer Astro's IPTV contents to its customers. (BT)

SP Setia president and chief executive officer  Tan Sri Liew Kee Sin is optimistic that the Battersea redevelopment would fetch good sales given that it is located in Chelsea, which is  relatively London's most expensive area. Redevelopment of the iconic Battersea Power Station (BPS) by a Malaysian consortium is expected to begin in April, after a soft launch in January. There were several failed attempts to redevelop the site by previous owners but Liew is confident that the consortium will not fail like others before it. For one, the consortium's scheme comes with good public amenities and transport solutions. Sime Darby chief operating officer Datuk Abdul Wahab Maskan suggested that the consortium had paid reasonably cheap for the site given that the £400m (RM1.98bn) price tag is equivalent to just 5% of the project's expected GDV. (BT)

Palm-oil stockpiles in Malaysia, the world’s biggest producer after Indonesia, probably climbed 7% in August to the highest level in 11 months as exports lagged behind output, according to a survey.  Stockpiles increased to 2.14m metric tons from 2 million tons in July, according to the median in the Bloomberg survey of two analysts and three plantation companies. That would be the highest level since 2.16m tons in September last year. Output climbed 0.5% to 1.7m tons on- month, while exports rose 9.5% to 1.42m tons, the survey showed. The Palm Oil Board releases the data on Sept. 10.  (Bloomberg)

PPB Group Bhd believes the business model of its 18.3% owned  Wilmar International  is sound and expects the latter's financial performance to improve once market conditions turn around. PPB managing director Lim Soon Huat  said on Wednesday that "we are confident  about the medium to long term prospects of Wilmar". "Do not forget, Wilmar had four years of good earnings. We have been in the commodities business for long time, and we have the experience to address and mitigate uncertainties," he said at a briefing. (StarBiz)

PPB Group Bhd does not have plans for merges and acquisitions presently but is focusing on growing its core activities, said managing director Lim Soon Huat. "We want to expand our core business, whether they are in existing or new markets. That is reflected in our capital commitments, and our investments in China, Vietnam and Indonesia - flour mills. And our cinema expansion. We want to do what we know best," Lim said. (StarBiz)

Lynas Corp Ltd expects the production of rare earth concentrates at  its advanced materials plant in Malaysia to reach 11,000 tonnes by the first quarter of next year. Lynas executive chairman Nicholas Curtis  said the production will kick off upon full completion of the first phase of construction, which is expected to be by the end of this year. He said the second phase, which will be fully completed by the second quarter of next year, will see a substantial production, accounting for 60% to 70% of the full capacity.  "We anticipate by the end of next year, we will be running at full capacity, producing 22,000 tonnes per year," he said. (BT)

Malaysia has given the go-ahead for the country’s first plant to process  rare earths, granting a licence to  Lynas Corporation to start processing the materials.  Lynas said the  Malaysia Atomic Energy Licensing Board on Wednesday issued a temporary operating licence for the plant, which is near the eastern coastal town of Kuantan.  The company had been trying to get a processing plant off the ground in peninsular Malaysia since 2002. (Financial Times)

Affordable housing will be one of the highlights in Budget 2013,  said Datuk Donald Lim Siang Chai. The Deputy Finance Minister said among the initiatives being looked into was the enhancement of low-cost home development projects, particularly the My First Home Scheme. Lim said the Government had proposed to increase the limit of house prices under the scheme from RM220,000 to RM400,000 to fulfill the needs of those earning below RM3,000. “Over 70% of Malaysians live and work in urban areas  and easing their financial constraints will be highlighted in the upcoming Budget,” he added. (Star)

AirAsia group CEO Tan Sri Tony Fernandes has dismissed reports that his airline is eyeing Serbian airline JAT Airways and is trying to make Belgrade a hub. Bloomberg reported that the budget airline may take over JAT Airways, citing reports in the Vecernje Novosti newspaper. Serbia has been trying to sell JAT Airways for several years with the most recent suitor, Baltic Aviation Systems, withdrawing its bid last December. (Malaysian Reserve)

The EPF unit Kwasa Land Sdn Bhd will invite partners to develop the RRI land in Sungai Buloh into a township. Kwasa Land said, as the master developer, it would undertake the first step by conducting a pre-qualification exercise to get the right partners to undertake the Kwasa Damansara township. The township project will cover 2,330 acres (943 ha) of prime land and Kwasa Land's emphasis is to ensure it obtains the "right developers with the required track record and expertise to undertake its massive parcels of mixed development projects". The township is a mix of residential, commercial, recreational, institutional and educational facilities which when ready, will serve a target population of 150,000.  Developers are invited to visit the Kwasa Land corporate website at to download the form for the Pre-Qualification exercise. The closing date for all submissions is noon, Sept 26, 2012. (Starbiz)

Perodua says there is a need to introduce the end-of-life vehicle policy to address vehicle safety and roadworthiness issues. Managing Director Datuk Aminar Rashid Salleh today urged the government to consider the policy. "During recent discussions with the government, the automotive industry proposed that the policy should be implemented voluntarily before making it compulsory," he told reporters when asked on Perodua's wish list for Budget 2013. Aminar also hoped the government would come up with certain standards and provide training to vehicle mechanics who cannot offer quality service. Workshop operators must ensure that their employees at least have a certificate in car repair and maintenance work to provide quality service to customers and at the same time  protect their sovereign rights, he said. The government should also introduce laws and regulations on how to run used-car and vehicle licence business for consumers' benefit. Prime Minister Datuk Seri Najib Tun Razak, who is also Finance Minister, will table Budget 2013 in Parliament on Sept 28. (Bernama)

Bolton Bhd plans to launch three high-end properties, with a total gross development value (GDV) of RM850m, over the next six months, said its executive chairman Tan Sri Azman Yahya. The projects are the final tower of serviced apartments and a 500,000 sq ft retail mall at The Wharf in Puchong, Selangor (GDV: RM340m), 71 condominium units at its 51G Kuala Lumpur project (GDV: RM210m) and 118 bungalows at Tijani Ukay, Kuala Lumpur (GDV: RM300m). (Sun)

KUB Malaysia  expects to return to the black this financial year ending December 2012 with the sale of its entire stake in A&W Restaurants (Thailand) Ltd Co and A&W (Malaysia) Sdn Bhd. Group managing director Datuk Wan Mohd Nor Wan Ahmad said the conglomerate has appointed merchant banker CIMB to evaluate proposals from several bidders for the A&W stake, which are all from Malaysia. "We expect to reach a decision by end of the year and then exit the food business for good. After that, KUB will focus on consolidation. "As for A&W, the eventual winning company must have the financial capability, be involved in the food business and has a clear business expansion plan," Wan Mohd Nor said. He denied that one of the bidders is government-owned equity firm Ekuiti Nasional Bhd. KUB, which took over the A&W franchise 12 years ago, owns 40 outlets in Thailand and another 20 in Malaysia. It has, however, been operating A&W at a loss since then. KUB has RM350m worth of contracts in hand with a 40% gearing, which will be  trimmed once it sells A&W. (BT)

Westports Malaysia is poised to handle about 9m teu containers when its new 600m wharf is ready by 2014, said CEO  Ruben Emir Gnanalingam. Ruben said Westports is confident of handling 7m teu this year compared with 6.4m  previously, mainly due to its cargo volume between Asia and Europe. (Bernama)

TNB: Wins Bangladesh power job
Tenaga Nasional’s (TNB), proposal has been selected by the Bangladesh Power Division for the installation and operations of a 1,320MW coal-fired plant in that country. The power plant, to be installed at either Anwara in Chittagong or Maheshkhali at Cox’s Bazar, would be through a joint-venture company owned by the Power Development Board and TNB, Bangladesh’s "New Age" newspaper reported, quoting unnamed officials. It said the plant would run on imported coal. A delegation, led by the Power Division’s additional secretary Md Mofazzel Hossain, will visit Malaysia this month to finalise the memorandum of understanding on the installation and operations of the plant, the officials said. China and Thailand power generation companies have also submitted proposals to the Power Division for the project. A Power Division official told New Age they preferred the Malaysian proposal as it met the criteria set by the ministry. (Business Times)

Malaysian Resources Corporation: Government looking to acquire EDL highway
The government is looking to acquire the Eastern Dispersal Link (EDL) from MRCB for RM1.2bn. EDL has been severely impacting MRCB’s earnings and may be finally relieved from it. The price tag is able to cover the RM1.04bn bonds issued but short of 100m as the project’s total equity was valued at RM1.3bn. (StarBiz)

IGB REIT: Raises RM838m in IPO
IGB Real Estate Investment Trust (REIT) raised RM837.5m in an initial public offering after pricing units at the top of the marketed range, said 3 people with knowledge of the matter. The trust, an arm of property developer IGB Corporation, sold units to institutional investors at RM 1.25 each, said the people, asking not to be identified as the information is private. IGB had marketed the shares at RM1.15 to RM1.25 apiece. (StarBiz)

Bandar Raya Developments: In JV residential project, GDV of RM600m
Bandar Raya Developments (BRDB) is teaming up with landowner Garuda Mega Sdn Bhd to undertake a residential development project in Sungai Long, Selangor. BRDB said on Wednesday its unit Raintree Forest Sdn Bhd had inked a JV agreement with Garuda Mega for the project with a gross development value of RM600m. The agreement is to build bungalows, semi-detached houses and apartments on Garuda Mega's land, measuring 25.97ha. Phase one is targeted to be launched in 2Q 2014. The landowner's entitlement would be 23% of the net development value and it could opt for either cash or units or both. The directors of Garuda are Datuk Chee Hong Leong and Chee Chik Eng. (StarBiz)

Magna Prima: Buys 20 acres in Shah Alam for RM100m
Magna Prima’s wholly-owned subsidiary Magna Ecocity Sdn Bhd (MESB) is to acquire 20 acres in Seksyen 15, Shah Alam for RM100 m. The vendor of the land is PCM Bina Sdn Bhd, which will receive RM70m cash plus a 30% stake in MESB valued at RM30m for the transaction. The 20 acre plot in question is still an industrial property, but the Petaling Land Office has approved the variation of land use from “industrial” to “commercial”. The land will be developed into a mixed residential and commercial project which will comprise 244 terraced three storey shop offices and 1,620 serviced apartments. The project has a GDV of RM1 billion with a development cost estimated at RM676.62m excluding the cost of acquiring the land. (Financial Daily)

Ingenuity Solutions: Chin rejects Ninetology offer, seeks to be on board
Chin Boon Long, the substantial shareholder of Ingenuity Solutions Bhd, has declined Ninetology Marketing Sdn Bhd offer for his shares in the ACE Market company. He told a press conference here on Wednesday that he will hold on to his Ingenuity shares for another two years and his next course of action is to seek a board representation at Ingenuity. (Business Times)

Glove: ANRPC sees higher rubber output
Natural rubber (NR) production in Association of Natural Rubber Producing Counties (ANRPC) this year is set to rise by 4.9% to 10.83m tonnes from 10.33m tonnes in 2011. Its secretary-general, Datuk Dr Kamarul Baharin Basir, said ANRPC members produced about 93% of the global NR. He said Thailand was still the largest producer with 34.82% followed by Indonesia (28.8%), Malaysia (9.71%), India (8.67%) and Vietnam (7.91%). (StarBiz)

Plantation: MPOB and Italy's Maccaferri in CPO recovery
The Malaysian Palm Oil Board (MPOB) and Italy's Maccaferri are collaborating to develop the oil separation and recovery process technology for palm oil mills. Plantation Industries and Commodities Minister Tan Sri Bernard Dompok said on Wednesday that Maccaferri had the technology for oil recovery and primary separation of water and immiscible oils. He said the technology had been used in the oil and gas industry during oil spills and also in steel mills where there was a fraction of free floating oil on water. (StarBiz)

20120906 1020 Global Markets Related News.

Asia FX By Cornelius Luca - Wed 05 Sep 2012 16:43:34 (Source:CME/
The appetite for risk reversed from weak to relatively strong for the European currencies and yen in the US on Wednesday after reports that the ECB will announce a new government bond buying program to stem the euro zone crisis. Details of the plan will be revealed by ECB President Draghi after Thursday's policy meeting. The commodity currencies fell on concern about the slowdown in the Chinese economy. The US indexes, gold, oil and silver made little progress. The short-term outlook for the European and commodity currencies is sideways. The medium-term outlook for most of the foreign currencies is slightly bullish. The LGR short-term model is long on most foreign currencies. Good luck!

US: The final productivity was upwardly revised to +2.2% in the second quarter from the preliminary estimate of +1.6%.
Canada: The Bank of Canada left its interest rate at 1.0%, as widely expected.

Today's economic calendar
Australia: Unemployment rate  for August

Most Asian Stocks Rise Ahead Of ECB Bond-Buying Program (Bloomberg)
Most Asian stocks rose as investors await the European Central Bank’s announcement on President Mario Draghi’s proposal for unlimited bond purchases to tame the region’s sovereign-debt crisis. Mobile phone maker LG Electronics Inc. (066570), which depends on Europe for 16 percent of its revenue, rose 2.5 percent in Seoul. Lynas Corp. surged 29 percent in Sydney after it said Malaysia issued a temporary operating license for a rare-earths refinery. Sharp Corp. (6753) fell 5.7 percent in Tokyo after its short-term ratings were cut to junk at Moody’s Investors Service. Billabong International Ltd., a surfwear maker, gained 7.9 percent in Sydney after receiving another takeover offer. The MSCI Asia Pacific Index was little changed at 115.82 as of 10:17 a.m. in Tokyo before markets in Hong Kong and China opened. The measure closed yesterday at the lowest level since July 26.
“Europe has been a source of tail risk for markets for the last two years,” said Prasad Patkar, a portfolio manager who helps manage about $1 billion at Platypus Asset Management Ltd. in Sydney. “If that risk is addressed in a credible manner, the scene could be set for a relief rally in risk assets.” The MSCI Asia Pacific Index fell 1.2 percent this quarter through yesterday as signs of a global economic slowdown overshadowed expectations for further stimulus measures. The Asian benchmark traded at 12.1 times estimated earnings, compared with 13.6 times for the Standard & Poor’s 500 Index (SPXL1) and 11.6 times for the Stoxx Europe 600 Index.

China’s Stocks Rise As Subway Plan Raises Stimulus Speculation (Bloomberg)
China’s stocks rose for the first time in three days as a government subway proposal stoked speculation policy makers will introduce more stimulus measures. China Rail Construction Corp. (601186), builder of more than half the nation’s rail links, climbed 2.8 percent after the National Development and Reform Commission approved development plans for subways in 18 Chinese cities. Shanghai Chaori Solar Energy Science & Technology Co. lost 1.1 percent after the European Union threatened to impose tariffs on Chinese solar panels. “The subway development plan boosts investors’ expectations of more spending by the government,” Xu Shengjun, an analyst at Jianghai Securities Co. in Shanghai, said by phone today. “Still, it’s widely expected the economic data to be released soon won’t be great and will drag on stocks.”
The Shanghai Composite Index (SHCOMP) gained 0.6 percent to 2,049.66 as of 9:38 a.m. local time after closing yesterday at its lowest level since February 2009. The CSI 300 Index added 0.8 percent to 2,216.28. The Hang Seng China Enterprises Index (HSCEI) of Chinese companies traded in Hong Kong advanced 0.3 percent. The Bloomberg China-US Equity Index (CH55BN) of the most-traded Chinese shares in the U.S. sank 1 percent to 86.29. Signs that China’s economic slowdown is deepening have dragged the Shanghai Composite down 7.9 percent this quarter. The gauge sank 2.7 percent in August, a fourth straight month of declines. That’s the longest streak since the five months through August 2004, according to data compiled by Bloomberg.

Japan Stocks Swing From Gains, Losses On ECB Plan, China (Bloomberg)
Japan stocks swung between gains and losses amid speculation European Central Bank President Mario Draghi will today announce unlimited bond purchases to tame the region’s debt crisis, and after growth estimates for China’s economy were cut by Goldman Sachs Group Inc. Hitachi Construction Machinery Co., which gets almost 17 percent of sales in China, dropped 0.4 percent. Roland Corp., a maker of musical instruments that gets more than a third of sales in Europe, gained 0.7 percent. Inpex Corp. (1605), Japan’s biggest energy explorer, advanced 0.7 percent after oil climbed. The Nikkei 225 Stock Average (NKY) slid 0.2 percent to 8,658.65 as of 10:22 a.m. in Tokyo after rising as much as 0.2 percent. The broader Topix Index declined 0.3 percent to 715.71, with more than twice as many shares falling as rising. Draghi will propose that the ECB buy government debt while refraining from a public cap on yields, according to two central bank officials briefed on the plan before the meeting today.
The bond plan “may be a constructive development for the markets,” Stephen Roach, Yale University professor and former non-executive chairman for Morgan Stanley in Asia, said in a Bloomberg TV interview. “But the jury is out on whether these types of unconventional actions really make a meaningful difference for the real economy. The action on Thursday in Europe is probably going to be quite close to the expectations that have already been discounted in the market.” The Topix dropped 18 percent from this year’s peak on March 27 through yesterday on concern Europe’s debt crisis is deepening and growth is slowing in China and the U.S. The gauge trades at 0.9 times book value, compared with 2.2 for the Standard & Poor’s 500 Index and 1.5 for the Stoxx Europe 600 Index. A number less than one means companies can be bought for less than the value of their assets.

Most U.S. Stocks Fall On FedEx, Economy Ahead Of ECB Plan (Bloomberg)
Most U.S. stocks fell, sending the Standard & Poor’s 500 Index lower for a second day, amid a slump in FedEx (FDX) Corp. and disappointing global economic data as investors awaited the European Central Bank’s plan to buy bonds. FedEx, a barometer for the economy because it delivers goods from mobile phones to pharmaceuticals, slid 2 percent after projecting its first decline in quarterly earnings in almost three years. Facebook Inc. (FB) jumped 4.8 percent after Chief Executive Officer Mark Zuckerberg said he won’t start selling his holdings for at least a year. The Bloomberg U.S. Airlines Index soared 3.4 percent amid carriers’ improved performances.  The S&P 500 lost 0.1 percent to 1,403.44 at 4 p.m. New York time, after rising as much as 0.3 percent earlier. The Dow Jones Industrial Average added 11.54 points, or 0.1 percent, to 13,047.48. About five shares fell for every four that advanced on U.S. exchanges, with volume at 5.7 billion shares, or 6.4 percent below the three-month average.
“We’ve had this wait-and-see going on for three weeks now,” Bruce Bittles, chief investment strategist at Milwaukee- based Robert W. Baird & Co., which oversees $85 billion, said in a telephone interview. “The sellers are being held off from the anticipation of more quantitative easing. You don’t want to short or sell in front of that. On the other hand, the economy doesn’t seem to be able to make it -- either domestically or globally. It’s really a stand-off.” The S&P 500 in August climbed to its highest level on an intraday basis in more than four years, then failed to close at that milestone. The index has fluctuated near the 1,400 level for three weeks as European leaders worked to tame the region’s debt crisis and Federal Reserve Chairman Ben S. Bernanke said in Jackson Hole, Wyoming, last week he wouldn’t rule out more stimulus.

European Stocks Swing Between Gains, Losses Before ECB (Bloomberg)
European stocks closed little changed, after swinging between gains and losses, as investors await tomorrow’s European Central Bank meeting. Cie. Financiere Richemont SA advanced 1.5 percent after the maker of Cartier jewelery reported five-month sales rose 23 percent. BP Plc (BP/) fell 2.9 percent after the U.S. Department of Justice reiterated it will pursue charges of gross negligence for the worst U.S. oil spill two years ago. Nokia Oyj sank the most in almost three months after unveiling two Microsoft Corp.- powered smartphones. The Stoxx Europe 600 Index rose less than 0.1 percent to 265.49 at the close of trade after swinging between gains and losses at least 16 times. The gauge pared losses of as much as 0.5 percent as officials briefed on the proposal said ECB President Mario Draghi’s bond-buying plans involve unlimited government debt purchases that will be sterilized to assuage concerns about printing money.
“We are coming into the eye of the storm with regards to event risk, and today will really be the last day traders can tweak portfolios ahead of the key ECB meeting and U.S. payrolls on Friday,” said Chris Weston, an institutional dealer at IG Markets in Melbourne, in a note to clients. “After last night’s adjustment to expectations to the upcoming ECB meeting, we feel the market has a more neutral approach to what is likely to be delivered.”

Emerging Market Stocks Decline On China, Europe Concerns (Bloomberg)
Emerging-market stocks fell, with the benchmark index (VXEEM) closing at the lowest level in six weeks, as concern deepened about economic growth in China and falling exports to Europe. The MSCI Emerging Markets Index (MXEF) dropped 0.8 percent to 939.51, the lowest since July 26. Sany Heavy Industry Co. (600031), China’s biggest maker of excavators, fell to a two-year low in Shanghai after the Securities Times reported the country’s industrial output growth may slow. South Korea’s Kospi Index tumbled 1.7 percent while Russia’s Micex lost 1 percent. Brazil’s Bovespa gauge advanced 1.1 percent with steelmaker Usinas Siderurgicas de Minas Gerais SA leading the gains.
China’s 2012 industrial output growth may slow to about 10 percent, from 13.9 percent in 2011, the Securities Times said today, citing a joint report by the Ministry of Industry and Information Technology and the Chinese Academy of Social Sciences. Euro-area services and manufacturing contracted more than initially estimated in August, according to Markit Economics. The European Central Bank will decide tomorrow on a proposal to buy bonds as it seeks to stem the debt crisis. “The global risk sentiment is being affected by data coming from Europe,” Benoit Anne, head of emerging-markets strategy at Societe Generale SA, said by phone from London. “In addition, the growth picture tends to influence the equity markets and there is continued concern of growth dynamics weighing quite a bit on Asian markets.”

Treasuries Stay Lower On Bets ECB Will Announce Bond-Buying Plan (Bloomberg)
Treasuries stayed lower after two central bank officials said European Central Bank President Mario Draghi’s bond-buying proposal involves unlimited purchases of government debt that will be sterilized. Ten-year U.S. yields have climbed from a one-month low amid speculation the ECB will announce a plan to buy sovereign bonds of debt-saddled European nations at a policy meeting today, dimming the allure of refuge assets. Demand for Treasuries was supported before a private report forecast to show gains in U.S. employment slowed during August. “The ECB’s bond-purchase plan will ease concern about Europe’s debt crisis,” said Kiyoshi Ishigane, a senior strategist at Mitsubishi UFJ Asset Management Co. in Tokyo, which oversees about $76 billion. “With the ECB showing a more aggressive stance, markets are shifting from risk-off to neutral positions, so Treasury yields are struggling to fall.”
The benchmark 10-year yield was little changed at 1.59 percent at 9:49 a.m. in Tokyo after rising four basis points this week. It touched 1.54 percent on Sept. 4, the lowest since Aug. 6. The 1.625 percent bond due August 2022 was at 100 10/32. European officials are working to stem the region’s debt crisis, which is in its third year. The ECB blueprint, which may be called “Monetary Outright Transactions,” will focus on government bonds rather than a broader range of assets and will target maturities of three years or less, according to central-bank officials briefed on the proposal who requested anonymity. The ECB will sterilize its bond purchases by removing from the system elsewhere the same amount of money it spends, ensuring a neutral impact on money supply, the officials said. The ECB will also lower its benchmark interest rate today to 0.5 percent, from 0.75 percent, according to the median estimate in a Bloomberg News survey of economists.
U.S. corporate employment is estimated to have risen by 140,000, the least since May, according to a separate Bloomberg poll of economists taken before ADP Employer Services announces the figure today.

FOREX-Euro dips as scepticism over ECB action grows
LONDON, Sep 5 (Reuters) - The euro fell on scepticism among investors such as sovereign funds that steps by the European Central Bank to stem the debt crisis could fall short of market expectations.
"Many are concerned that the ECB may just give us bare bones while others are of the view that even if they give details to the plan, it would be a good time to sell the currency as the economic data from the region has been deteriorating," said Jane Foley, senior currency strategist at Rabobank.

Euro Trades Near Two-Month High On ECB Bond-Buying Plan (Bloomberg)
The euro traded 0.3 percent from a two-month high against the dollar after two central bank officials said European Central Bank President Mario Draghi is proposing unlimited, sterilized bond buying to stem the region’s debt woes. Sterilization involves draining money from other parts of the financial system to offset new funds added. The 17-nation euro maintained gains from yesterday against most of its 16 major peers amid speculation the ECB will announce measures to tackle the debt crisis at its meeting today. The Australian dollar traded near the lowest in more than seven weeks before a report forecast to show unemployment rose in August.
“The market is pleased by the fact that we have some details and that the ECB is going to follow through with what was hoped that they would do,” said Emma Lawson, a Sydney-based currency strategist at National Australia Bank Ltd., referring to the central bank’s bond-purchase program. “The euro can at least remain around current levels and possibly be a little bit supported into the ECB meeting.” The euro bought $1.2599 as of 9:58 a.m. in Tokyo from yesterday, when it gained 0.3 percent to $1.2601. It reached $1.2638 on Aug. 31, the strongest since July 2. The shared currency fetched 98.84 yen from 98.77. The yen added 0.1 percent to 78.45 per dollar. The so-called Aussie dollar was trading at $1.0188 from $1.0193 yesterday, when it dropped to $1.0167, the weakest since July 13.

Aussie Dollar Trades Near Seven-Week Low Before Jobs Data (Bloomberg)
Australia’s dollar was 0.2 percent from the lowest in more than seven weeks before a report predicted to show unemployment in the nation increased amid concern that global growth is slowing. The so-called Aussie remained weaker versus its U.S. peer following three days of declines as falling resources prices sapped demand for commodity currencies. The New Zealand dollar was near its lowest in six weeks. The South Pacific currencies were buoyed on the prospect European Central Bank President Mario Draghi will today announce unlimited, sterilized bond buying to quell the euro region’s debt crisis, supporting investor appetite for higher-yielding assets. “We’re not so bullish on the Aussie,” said Janu Chan, an economist at St. George Bank Ltd. in Sydney. “If the employment does come in in line with expectations, it would be confirmation” that the labor market is softening, she said.
The Australian dollar was little changed at $1.0188 at 11:09 a.m. in Sydney after touching $1.0167 yesterday, the weakest since July 13. It fetched 79.92 yen. New Zealand’s currency was unchanged at 79.47 U.S. cents from yesterday, when it dropped to 79.15, the lowest level since July 26. It was at 62.34 yen from 62.29. Australia’s unemployment rate probably rose to 5.3 percent in August from 5.2 percent in the previous month, according to the median estimate of economists surveyed by Bloomberg News before a report due at 11:30 a.m. Sydney time.

America Proves Nothing Like Europe As Joblessness Dips (Bloomberg)
Federal Reserve Board Chairman Ben Bernanke testifies before the Senate Banking, Housing and Urban Affairs Committee on Capitol Hill in Washington, on July 17, 2012. James Ensley of Rocky Face, Georgia, took a $10,000-a-year job last month as a school-bus driver after almost two years of unemployment benefits ran out. While that’s a third of his prior pay as a warehouse manager, the father of two says he’s content. “It feels great to go to work instead of having somebody tell you ‘I can’t help you,’” said Ensley, 51, whose former employer went bankrupt in the wake of the U.S. housing slump. “I miss my old job, but it is not coming back so I have to get over it.”
A surge in long-term U.S. unemployment, which Federal Reserve Chairman Ben S. Bernanke has cited as evidence of a “far from normal” labor market, finally is abating. That’s good news for American companies, which are taking advantage of a pool of 5.2 million people whose career hardships have made them eager to return to work. Most of the re-employed have had to settle for reduced pay, allowing businesses to keep labor costs low while boosting profits amid sluggish sales gains following the deepest recession since the 1930s. “The cost of labor is very cheap,” said James Paulsen, who helps oversee about $325 billion as chief investment strategist at Wells Capital Management in Minneapolis. “Nominal wage gains are very anemic,” so these costs “are down and will likely stay down for a while longer.”
The number of Americans out of work for 27 weeks or longer in July was 1.5 million fewer than the April 2010 peak, Labor Department data show. The total represented 41 percent of all jobless, the lowest share since 2009. The department will release August employment data Sept. 7.

Americans Say Better Off Since Obama Even As Slump Lasts (Bloomberg)
President Barack Obama greets a student during an unannounced stop at Sloopy's Diner on the Ohio State University campus before traveling to Capital University, in Columbus on Aug. 21, 2012. The typical middle-class family has less money than when Barack Obama entered the White House. Even so, in more cases than not, Americans still feel better off. The presidential election may hinge on whether Republicans can focus voters’ attention on the economic ground they have lost or Democrats can convince them that Obama has pulled them back from an even worse fate. It’s a central debate in the campaign: discontent with a diminished standard of living versus relief that the nation averted an economic meltdown. Polls show Democrats are beginning the messaging battle with an advantage.
When asked how they felt about their circumstances compared with the start of the Obama administration, 45 percent of Americans said better off versus 36 percent worse off, according to a Bloomberg National Poll taken June 15-18. The rest said their circumstances were about the same or they weren’t sure. The question has been fundamental to American presidential campaigns since Ronald Reagan posed it during a debate with President Jimmy Carter during the 1980 campaign, crystallizing discontent with the times. “Ask yourself,” Reagan said, “Are you better off now than you were four years ago?” Four years ago, Republican presidential candidate John McCain suspended his campaign and returned to Washington as fear of an economic disaster enveloped the nation while financial markets collapsed following the closing of Lehman Brothers.

Productivity In U.S. Grows More Than Previously Estimated (Bloomberg)
The productivity of U.S. workers rebounded more than initially estimated in the second quarter as employers tried to protect profits. The measure of employee output per hour climbed at a 2.2 percent annual rate, after a 0.5 percent drop in the prior three months, revised figures from the Labor Department showed today in Washington. The median forecast of 59 economists surveyed by Bloomberg called for a 1.8 percent increase. Expenses per worker climbed at a 1.5 percent rate, less than previously estimated. The biggest gains in productivity during the current expansion have probably already occurred as companies find they need to boost staff to further increase output and as investment in new equipment cools. At the same time, a weakening global economy is already hurting earnings, indicating businesses will continue to look for ways to operate more efficiently.
“Companies did a good job on productivity during the crisis, and they will continue to try to increase productivity to boost profits, but it’s not so easy to do that from here,” said Harm Bandholz, chief economist at UniCredit Group in New York. “Investment spending in the U.S. has been lackluster, and it’s certainly not getting better. The potential for increasing profits by cutting costs has come down quite a bit.” Stock-index futures trimmed earlier losses after the report. The contract on the Standard & Poors’ 500 Index maturing this month fell 0.2 percent to 1,403.7 at 8:45 a.m. in New York.

Christmas Cargo Boosts U.S. Rates As Europe Slumps: Freight (Bloomberg)
The shipping lanes of the Pacific and Indian Oceans show the diverging fortunes of U.S. and European consumers ahead of the busiest shopping season of the year. A.P. Moeller-Maersk A/S (MAERSKB), the world’s biggest container line, is among carriers raising rates on Asia-U.S. routes as three-month-high consumer confidence and job growth at the quickest pace in five months tempt retailers to stock up ahead of the holiday-shopping rush. By contrast, shipping lines are cutting capacity to Europe. “Christmas will come to America, but probably not to Europe,” Soeren Skou, chief executive officer of A.P. Moeller- Maersk’s container-shipping arm, said in an interview.
On Asia-Europe routes, Copenhagen-based Maersk and other lines are paring services as economic confidence at a three-year low and record euro-area unemployment damp demand. The slowdown has hit European retailers including Marks & Spencer Group Plc (MKS) and Carrefour SA (CA), while U.S. chains including Macy’s Inc. (M), Target Corp. (TGT) and Victoria’s Secrets’ parent Limited Brands Inc. (LTD) are predicting higher sales. “Europe is still on a downward trend,” said Wan Min, executive vice president at China Cosco Holdings Co. (1919), parent of the nation’s biggest container line. “The U.S. will see a mild growth in shipping demand in the third quarter.” Maersk expects full-year Asia-North America volumes to increase as much as 3 percent, compared with a 3 percent decline on Europe routes, Skou said. The company has pared capacity on Asia-Europe routes by about 10 percent and it will make cuts in the fourth quarter, he said.

FedEx Sees First Earnings Decline Since 2009 On Economy (Bloomberg)
FedEx Corp. (FDX) fell in U.S. trading after projecting its first quarterly earnings decline since 2009 as slowing economic growth hurt demand for the express packages that provide most of its sales. A slump in Europe and slowing growth in Asia may have exposed a weakness of FedEx’s express business, which was built around customers willing to pay more for speed of delivery, said analysts from Sanford C. Bernstein & Co. and Raymond James & Associates Inc. “The economy needs to get better,” said Arthur Hatfield, an analyst with Raymond James in Memphis, Tennessee. “We see some pent-up demand but corporations aren’t spending the money until they get clarity on where policies are going.” The shares slid 2 percent, the most since July 20, to $85.80 at the close in New York in the first day of trading after issuing the forecast. Memphis-based FedEx operates the world’s biggest cargo airline and is considered an economic bellwether because it moves goods ranging from financial documents to pharmaceuticals.
Profit for the quarter that ended Aug. 31 will be $1.37 to $1.43 a share, FedEx said yesterday in a statement. That was less than a June 19 forecast of $1.45 to $1.60 a share and year- earlier earnings of $1.46. It would be the first drop in adjusted per-share profit since the quarter ended November 2009. FedEx is set to release quarterly earnings on Sept. 18, with United Parcel Service Inc. (UPS), the world’s largest package- delivery company, to follow about a month later. Atlanta-based UPS dropped 2.4 percent to $71.94.

Canada Keeps 1% Key Rate With Language On Future Increase (Bloomberg)
The Bank of Canada kept its main interest rate unchanged and reiterated that an increase may be needed as domestic spending props up an economic recovery restrained by weak global demand for exports. The country’s expansion will pick up through next year on business investment and consumer spending as shipments abroad lag, the Ottawa-based central bank said. The decision to remain at 1 percent, where the rate has been for two years, was forecast by all 27 economists surveyed by Bloomberg News. “To the extent that the economic expansion continues and the current excess supply in the economy is gradually absorbed, some modest withdrawal of the present considerable monetary policy stimulus may become appropriate,” policy makers led by Governor Mark Carney, 47, said in a statement today, echoing language used since April.
Today’s decision keeps Canada an outlier among Group of Seven nations with an inclination to raise borrowing costs while other central banks consider new stimulus. Carney has been saying since April that Canada has almost used up its spare economic capacity, and a report last week showed the economy expanded at a 1.8 percent annual pace in the second quarter, matching the central bank’s forecast. “We continue to expect a longer wait for the first rate hike” with economic growth about about 2 percent too slow to bring the economy to full output next year, Canadian Imperial Bank of Commerce chief economist Avery Shenfeld wrote in a client note.

Hong Kong CEO Battles Chinese Over Affordable Housing (Bloomberg)
Hong Kong’s new leader is taking up the battle his predecessor failed to win, seeking to overcome record low mortgage rates and an influx of Chinese buyers to make housing in the world’s most expensive city more affordable. Leung Chun-ying, the property surveyor who took over as the city’s chief executive in July, on Aug. 30 said he’ll boost the supply of homes and start drafting laws giving preference to locals over buyers from mainland China. He’s trying to cool prices that surged 85 percent since 2009 even as predecessor Donald Tsang raised minimum mortgage deposits, added taxes and increased land sales in a losing bid to stem the boom. Like Tsang, Leung has had to tweak demand and supply through curbs and land releases rather than monetary policy as Hong Kong’s currency peg to the U.S. dollar pushes borrowing costs to a record low.
Banks, including HSBC Holdings Plc (HSBA) and Standard Chartered Plc (STAN), are charging homebuyers an average 2.17 percent, less than half that of six years ago, fueling demand along with the rising wealth of buyers from China’s mainland. “Whenever government measures were rolled out in the past few years, the market stabilized for a while and then regained the upward momentum,” said Lawrence Lam, Hong Kong-based director of sales and secured lending at Citigroup Inc. “Property prices are under pressure to climb as interest rates are still low.” That’s unlikely to change in the next couple of years. U.S. Federal Reserve Chairman Ben Bernanke has pledged to keep interest rates low until at least 2014 and on Aug. 31 made the case for further easing to reduce unemployment in the world’s largest economy. The Hong Kong Monetary Authority keeps its lending rate tied to the Fed to maintain the currency’s peg to the U.S. dollar.

South Korea Reduces Estimate Of Second-Quarter Expansion (Bloomberg)
South Korea’s economy expanded in the second quarter by less than the central bank initially estimated, building the case for another interest-rate reduction as exports wane and confidence slides. Gross domestic product grew 0.3 percent from the previous quarter, compared with a July calculation of 0.4 percent, the Bank of Korea said in Seoul today. In the first quarter, the expansion was 0.9 percent. South Korea is balancing the threat from Europe’s debt crisis against the need to preserve fiscal and monetary firepower for any deeper global slowdown. Barclays Capital and Credit Agricole CIB see the central bank cutting the benchmark rate by a quarter percentage point on Sept. 13, adding to a July reduction that was the first since 2009. “The economy is apparently losing steam and sees no sign of recovery yet,” said Lee Sang Jae, a senior economist at Hyundai Securities Co. in Seoul. “The Bank of Korea will likely come to its aid with a rate cut next week.”
The Kospi Index of stocks rose 0.2 percent as of 9:09 a.m. in Seoul ahead of a press conference today where European Central Bank President Mario Draghi may announce measures to help stem the euro region’s crisis. The benchmark is down about 8 percent from this year’s high in April. South Korea’s economy expanded 2.3 percent from a year earlier, less than the earlier estimate of 2.4 percent, today’s report showed. Domestic consumption and corporate investment were weaker than initial calculations.

ECB Plan Said To Pledge Unlimited, Sterilized Bond-Buying (Bloomberg)
European Central Bank President Mario Draghi’s bond-buying proposal involves unlimited purchases of government debt that will be sterilized to assuage concerns about printing money, two central bank officials briefed on the plan said. Under the blueprint, which may be called “Monetary Outright Transactions,” the ECB would refrain from setting a public cap on yields, according to the people, and a third official, who spoke on condition of anonymity. The plan will only focus on government bonds rather than a broader range of assets and will target short-dated maturities of up to about three years, two of the people said. The euro jumped half a cent on the report and traded at $1.2611 at 5:40 p.m. in Frankfurt. European stocks advanced. An ECB spokesman referred to an Aug. 20 statement in which the Frankfurt-based central bank said it was misleading to report on decisions that haven’t been taken yet.
Draghi told the European Parliament this week that the ECB needs to intervene in bond markets to wrest back control of interest rates in the fragmented euro-area economy and ensure the survival of the common currency. Policy makers are deliberating on the plan today and Draghi will announce whether it has been agreed to at a press conference tomorrow.

Draghi Credibility At Stake As ECB Tries To Save The Euro (Bloomberg)
European Central Bank President Mario Draghi’s task today is straight-forward: produce a plan to save the euro. Draghi pledged more than a month ago to do what’s needed to preserve the single currency; now he’s under pressure to follow through with details of a bond-purchase plan to lower borrowing costs in Spain and Italy and prevent a breakup of Europe’s monetary union. Expectations have built to such an extent that Draghi risks losing credibility unless he delivers at a press conference after today’s Governing Council meeting in Frankfurt, economists and investors said. “Draghi has put his credibility squarely on the line,” said Julian Callow, chief European economist at Barclays Capital in London. “He has made it his business to save the euro, so he is going to be called on that.”
Draghi told the European Parliament this week that the ECB needs to intervene in bond markets to wrest back control of interest rates in a fragmented euro-area economy and save the currency, according to a recording of a closed-door session obtained by Bloomberg News. His blueprint, sent to council members just two days ago and opposed by Germany’s Bundesbank, proposes unlimited buying of government debt with maturities of up to about three years, two central bank officials said yesterday on condition of anonymity.

BOE Struck By Lure Of Banks As U.K. Economist Quits (Bloomberg)
Bank of England official Robert Wood resigned as London’s finance industry lured a U.K. economic analysis manager from the central bank for the second time in less than a year. Wood, who led analysis of British data for policy makers, will join Berenberg Bank in London this month, said two people with knowledge of the matter who declined to be identified because the appointment is not yet public. He follows a string of economists who held the position known inside the central bank as Head of the U.K. Team, using it as a springboard for jobs in London’s finance industry. The move coincides with a second year of pay freezes for Bank of England staff, adding to the lure of more lucrative City posts. Governor Mervyn King, who implemented the salary policy last year, thanked employees in this year’s annual report for their forbearance and singled out the struggle to hire and keep staff as a potential risk to its monetary-policy analysis.
“There’s always a danger that the good ones get poached,” said Shamik Dhar, head of investment strategy at Aviva Investors in London, which oversees $409 billion, and a former Bank of England official. “In the past there’s been a tradition of guys moving to get in to the City as this job does equip you with the right sorts of skills to be a City economist.” Wood couldn’t be reached for comment. A Bank of England spokeswoman confirmed today that Wood has resigned and said that he will be replaced by Venetia Bell. A spokesman for Berenberg couldn’t immediately comment.

Hungary Surprise Rate Cut Sends Yield To Year-Low (Bloomberg)
Hungary’s borrowing costs tumbled to the lowest level in a year before a bond auction tomorrow as investors bet on further interest-rate cuts after the central bank’s surprise reduction last week to fight recession. Yields on three-year government forint bonds dropped to 6.732 percent on Sept. 3, the lowest since September 2011, according to data compiled by Bloomberg. Investors demanded 6.75 percentage points more to hold Hungarian debt rather than similar-maturity German bunds on Sept. 3, the narrowest spread since the end of October. The Debt Management Agency is offering 45 billion forint ($200 million) of debt due in 2015, 2017 and 2022, according to data from the agency on Bloomberg. The Magyar Nemzeti Bank cut rates by 25 basis points to 6.75 percent on Aug. 28, citing Hungary’s slide into its second recession in three years.
Rate reductions may continue as the four Monetary Council members appointed by Prime Minister Viktor Orban’s government outvote central bank President Andras Simor and his two deputies, according to Peter Attard Montalto at Nomura International Plc. Traders are betting on additional cuts of as much as 50 basis points before year end, according to forward rate agreements. “The rate cut lifted the bond market,” Sandor Jobbagy, a Budapest-based analyst at Intesa Sanpaolo SpA’s CIB Bank unit, wrote in e-mailed comments yesterday. “The move also strengthened expectations for further easing this year.”

Euro zone likely back in recession as PMIs slump (Reuters)
The euro zone is likely to have slipped back into recession in the current quarter, according to a survey published on Wednesday that showed a seventh month of contraction for the bloc's private sector as new orders dwindled.

Pressure mounts on ECB to bring down bond yields (Reuters)
France and Italy piled more pressure on the European Central Bank on Tuesday to agree steps this week to reduce crippling borrowing costs for southern euro zone states.

20120906 1019 Global Commodities Related News.

Food-Price Jumps May Get Larger On Weather, Oxfam Says (Bloomberg)
Field corn plants with wilted and dying leaves stand in a dry field in Idaville, Indiana, on July 6, 2012. Jumps in food prices may be larger in the future as extreme weather events linked to climate change affect production, charity Oxfam International said. The impact of climate change on food prices may have been underestimated because most studies focus on how long-term temperature and rainfall changes affect farming, ignoring extreme events, Oxfam said today in a report. “Extreme weather events in a single year could bring about price spikes of comparable magnitude to two decades of long-run price rises,” Oxfam said today in a report, citing a study conducted for the charity by Dirk Willenbockel of the Institute of Development Studies in the U.K. Willenbockel used a model to simulate how export and domestic prices for food commodities could be affected by extreme weather in 2030 in sub-Saharan Africa and the main export regions for rice, corn and wheat, according to Oxfam.
A drought in North America in 2030 similar to the one in 1988 may increase export prices for corn by about 140 percent and world wheat prices by about 33 percent, according to the study. Simultaneous poor rice harvests in India and Southeast Asia may lift global average export prices for processed rice by 25 percent, Oxfam said. For East Africa and West Africa, drought on a similar scale as that experienced in 1992 may lift average corn prices for consumers in the region by 50 percent, the study showed. A “bad” harvest year in South America, with droughts and flooding similar to 1990, may could lift world corn prices by 12 percent, Oxfam said.

Wheat Falls To 3-Week Low As Livestock Farmers May Use More Corn (Bloomberg)
Wheat futures tumbled to the lowest in almost three weeks on speculation that demand will slow as livestock producers use more corn, a cheaper substitute for animal feed. Corn prices have slumped 6.9 percent since touching a record high on Aug. 10, cooling a rally sparked by crop damage from the worst U.S. drought since 1956. Over the same period, wheat dropped 3.7 percent. “Wheat needs to have something to follow, and today it’s following corn lower,” Dewey Strickler, the president of Ag Watch Market Advisers in Franklin, Kentucky, said by telephone. “The market has fallen, and we haven’t been able to muster a bounce back.” Wheat futures for December delivery declined 2.4 percent to settle at $8.6775 a bushel at 2 p.m. on the Chicago Board of Trade, after reaching $8.6525, the lowest since Aug. 16. The contract posted the biggest decline since Aug. 23, and prices have dropped in nine of the past 10 sessions.
Corn futures for December delivery fell 1.8 percent today on the CBOT to close at $7.9075 a bushel, compared with an all- time high of $8.49 last month. Corn is the biggest U.S. crop followed by soybeans, hay and wheat, government figures show.

Wheat Market Recap Report(CME)
December Wheat finished down 21 at 867 3/4, 20 3/4 off the high and 2 1/2 up from the low. March Wheat closed down 19 at 880 1/2. This was 2 1/4 up from the low and 18 1/4 off the high.
December Chicago wheat traded sharply lower into the close and traded down to levels not seen since the middle of August. Kansas City and Minneapolis wheat traded sharply lower as well. Outside markets are mixed with US stocks slightly higher and the dollar traded weaker, but neither were enough to support prices today. Bulls did receive a bit of positive news near the midpoint of the session after it was reported that Ukraine's Agriculture ministry and their grain trader's union agreed on a 2012/13 maximum export volume of 4 million tonnes of wheat vs. current USDA estimates of 6 million tonnes. The news was seen as supportive but the markets fell victim to technical selling the remainder of the day. The weather forecast for the western plains calls for a slightly better chance for showers heading into the weekend which will benefit Hard Red Winter wheat planting. Concern that next week's USDA report could show a drop in the US average corn yield and production is supportive to wheat but this assumption by some traders offered little support to the market as traders took profits midday. December Oats closed down 8 1/4 at 387. This was 1 1/2 up from the low and 8 off the high.

Pro Farmer: After the Bell Wheat Recap(CME)
Wheat futures weakened into the close to finish with losses mostly in the upper teens at all three exchanges. Wheat saw spillover from neighboring pits, as well as from concerns U.S. wheat isn't competitively priced on the global market. Traders were also encouraged to take profits as recent rains have helped recharge soil moisture across the key wheat-growing areas of the Central and Southern Plains.

Pro Farmer: After the Bell Corn Recap(CME)
Corn futures ended low-range with losses of 11 3/4 to 17 1/4 cents in the September through May contract, while farther deferred months closed steady to slightly lower. USDA data yesterday showed that harvest was 10% complete as of Sept. 2. The market expects harvest-related hedge pressure to mount, regardless of the pitiful state of the crop. This has caused basis levels to soften around the country and has encouraged profit-taking in corn futures.

Corn Market Recap for 9/5/2012(CME)
December Corn finished down 14 1/4 at 790 3/4, 15 3/4 off the high and 1 1/4 up from the low. March Corn closed down 13 at 794 3/4. This was 1 1/2 up from the low and 14 3/4 off the high.
December corn traded under pressure for most of today's session and closed near the lows of the day. The weaker trade was linked to profit taking, technical selling, and weaker cash markets as harvest begins to pick up it's pace across the Corn Belt. Some traders believe next week's USDA report could show downward revisions to the 2012/13 corn yield and production but the market saw very limited support from this and instead took profits ahead of tomorrow's European Central Bank meetings. There are reports that Brazilian corn has started to unload on the east coast and the sluggish US exports recently added to the weaker tone today. Argentina's Agriculture Secretary made statements that suggest that Argentina's 2012/13 corn production could reach 25 to 26 million tonnes vs. 21 million tonnes in 2011. Outside markets offered minimal direction today with US stocks trading higher and the US Dollar lower. November Rice finished down 0.255 at 14.92, 0.01 off the high and 0.05 up from the low.

GRAINS: Chicago wheat eased falling for a fourth consecutive session as rains across the U.S. Plains improved the prospects for winter crop planting and as exports from the Black Sea region continued to pressure the market. Soybeans were little changed after climbing to a record top of around $18 a bushel on Tuesday, while corn edged higher as tightening global supplies underpinned the market. (Reuters)

US corn harvest 10 pct done; a record but below forecast (Reuters)
U.S. farmers made little progress in harvesting corn during the past week as rains related to Hurricane Isaac kept them out of their fields, but the harvest was still at a record pace because early planting and the summer's drought caused the crop to mature earlier than usual.

Argentina approves more old crop corn exports (Reuters)
Argentina's government on Tuesday approved the export of another 2.75 million tonnes of 2011/12 corn as growers in the world's No. 2 supplier start new crop plantings, an industry source said.

India could become net sugar importer as early as 2013/14, bolster prices (Reuters)
India, the world's largest consumer of sugar, is likely to become a net importer of the sweetener as early as 2013/14, as drought-hit farmers replace cane with less water-intensive crops.

ICE raw sugar hovered above a fresh 3-month low in early trading weighed by brisk harvesting in Brazil, while arabica coffee eased, pressured by a firmer dollar. (Reuters)

ICE cocoa edged up in light volumes, as dealers closely watched weather in the main growing regions of West Africa before the start of the main crops. (Reuters)

Oil Gains A Second Day As U.S. Stockpiles Drop Most Since July (Bloomberg)
Oil rose a second day in New York after a report showed stockpiles declined the most in five weeks in the U.S., the world’s biggest crude consumer. Futures advanced as much as 0.7 percent after the industry- funded American Petroleum Institute said inventories slid 7.2 million barrels last week, the most since the period ended July 27. An Energy Department report today may show supplies fell 4.95 million barrels as Hurricane Isaac curtailed output in the Gulf of Mexico, according to a Bloomberg survey. About 49 percent of oil production and 26 percent of natural-gas output remains shut because of the storm, the government said. Oil for October delivery gained as much as 70 cents to $96.06 a barrel in electronic trading on the New York Mercantile Exchange and was at $95.79 at 9:27 a.m. Sydney time. The contract climbed 6 cents yesterday to close at $95.36. Front- month prices are down 3.1 percent this year.
Brent oil for October settlement decreased $1.09, or 1 percent, to $113.09 a barrel on the London-based ICE Futures Europe exchange yesterday. The European benchmark grade’s premium to West Texas Intermediate closed at $17.73. U.S. gasoline stockpiles dropped 2.3 million barrels last week, API data shows. They are forecast to decline 3 million barrels, according to the median estimate of 12 analysts in the Bloomberg News survey.

OIL-Oil slips to $114 on growth concerns before ECB
LONDON, Sept 5 (Reuters) - Brent crude oil slipped to around $114 a barrel on worries over economic growth and ahead of a European Central Bank (ECB) meeting expected to announce new measures to tackle the region's debt crisis.
"We are seeing some volatility as the political rhetoric around Europe continues ahead of tomorrow's (ECB) meeting," said Guy Wolf, macro strategist at brokers Marex Spectron in London.

Japan to expand national reserve of oil products
TOKYO, Sept 5 (Reuters) - Japan will expand its national strategic reserves of oil products by adding gasoline, gas oil and A-type fuel oil for the first time as it equips itself to better cope with crises such as last year's devastating earthquake, trade ministry officials said.
The world's third biggest oil consumer, which now stores only kerosene in its oil product strategic stockpile, will add one day's worth each of gasoline, gasoil, kerosene and A-type fuel oil in national reserves by March 31, the officials said on Wednesday.

US says 51.51 pct oil output still shut due to Isaac
Sept 4 (Reuters) - U.S. regulators said 51.51 percent of daily oil production and 29 percent of daily natural gas output in U.S.-regulated areas of the Gulf of Mexico remained shut on Tuesday due to Hurricane Isaac, whose remnants were moving toward the East Coast.  
The amount of shut oil output was down from Monday's 58.29 percent and natural gas production compared with 38.62 percent shut a day earlier.

China's top refineries to raise crude runs in Sept
BEIJING, Sept 5 (Reuters) - China's biggest refineries are set to increase the volume of crude oil processed in September, reversing cuts in the previous two months, a Reuters poll showed, after the startup of a new unit offsets production drops at other plants.
However, officials at the biggest two refiners, Sinopec  and PetroChina , doubt if demand in China, the world's second-largest oil user, is reviving after falling through the second quarter of this year.

The G7 is pushing on an oily string
--Robert Campbell is a Reuters market analyst. The views expressed are his own--
NEW YORK, Sept 4 (Reuters) - It is a problem familiar to central bankers: under certain weak economic conditions the tools available to policymakers become ineffective, hence the expression "pushing on a string."
Western governments wishing to undo this summer's geopolitically-induced oil rally (incidentally, one of their making) face a conundrum similar to central bankers' puzzles.

Deeper Correction Looms for Crude Futures, Robin Mesch Says(CME)
By Robin Mesch - Wed Sep 05 12:30:00 CDT 2012 CT
Drop Near $90 Possible as Bulls No Longer Driving Bus
A recent pullback in West Texas Intermediate crude oil futures below $98 a barrel may open the door for a deeper market correction toward $90.50 during September, technical analyst Robin Mesch said in a monthly report. Bullish traders were the "clear directional drivers" in crude futures during August, as prices briefly pushed above chart resistance at $98 to touch the highest levels in over three months, Mesch said. Based in Oregon, Mesch is a leading market strategist and a pioneer in the field of technical analysis and market theory. Oil has since dropped about $3, and the market's short-term profile suggests that for now, the buy order flow imbalance has begun to dry up, "leaving an interim congestion confine top for the bulls to overcome squarely at $98," Mesch wrote. Still, a renewed climb above $98 increases the likelihood oil will reach the "next significance zone" near $102.
In other futures, gold market bulls grabbed control after prices surpassed resistance around $1,620 to $1,640 an ounce, and there is little standing in the way of a continued rally toward $1,715 in the December contract. In September E-mini S&P 500 futures, chart patterns suggest the market may pull back to 1,375 to 1,385 to lure long interest back.

Gold To Fall As Stronger Dollar Curbs Investment Demand (Bloomberg)
Gold futures declined for the first time in three sessions as a European Central Bank plan to buy bonds as part of an economic-stimulus program lowered demand for the precious metal as a hedge against inflation. The ECB was said to propose unlimited government-debt purchases that will be sterilized, ensuring a neutral impact on the money supply by removing funds from elsewhere in the banking system. Yesterday, gold reached $1,701.60 an ounce, the highest since March 13. “The word ‘sterilized’ is bearish for gold,” Frank McGhee, the head dealer at Integrated Brokerage Services LLC in Chicago, said in a telephone interview. “There is some profit- taking too.” Gold futures for December delivery fell 0.1 percent to settle at $1,694 at 1:41 p.m. on the Comex in New York. The commodity gained 2.3 percent in the previous two sessions. In August, the metal jumped 4.5 percent, the most since January, on speculation that the Federal Reserve and ECB will increase steps to bolster their economies.
Silver futures for December delivery slid 0.3 percent to $32.329 an ounce on the Comex. On the New York Mercantile Exchange, platinum futures for October delivery advanced 0.5 percent to $1,575.60 an ounce, the third straight gain. Palladium futures for December delivery rose 0.9 percent to $646.95 an ounce.

Platinum Buying Expands As Mining Strikes Escalate: Commodities (Bloomberg)
Investors are buying platinum at the fastest pace since 2010 after disruptions at South African mines caused the biggest loss of supply in at least seven years. Strikes and pit closures meant mining companies extracted 380,000 ounces less than they could have this year, equal to about 6 percent of global output, Deutsche Bank AG estimates. Metal purchases through exchange-traded products were the most in 20 months in August, data compiled by Bloomberg show. Prices will average $1,625 an ounce in the fourth quarter, the highest in more than a year, according to the median of 12 analyst estimates compiled by Bloomberg. The lost production is diminishing a glut that drove prices to within 0.4 percentage point of a bear market in July and below the cost of extracting the metal. The rebound accelerated after police killed 34 strikers at Lonmin Plc (LMI)’s Marikana complex last month.
It was the worst mine violence since the end of apartheid in 1994 in South Africa, which accounts for about 75 percent of global output. Hedge funds are now their most bullish since March, U.S. government data show. “Supplies are going to be challenged,” said Nic Johnson, who helps manage $30 billion of commodity assets at Pacific Investment Management Co. in Newport Beach, California. Platinum “moved very close to the marginal cost of production which should put an upward pressure on prices. Any type of outages in South Africa will make it more attractive.”

U.S. Drought Helps Drive Shipping Rates To 3-1/2 Year Low (Bloomberg)
The worst U.S. drought in more than half a century helped drive down rates for Panamax vessels shipping grains to the lowest in more than 3 1/2 years as it results in a slump in cereal cargoes. The ships hauling about 60,000 metric tons of grains and other commodities including coal and iron ore slid 5.7 percent to $5,141 a day, the lowest since January 2009, according to data from the Baltic Exchange in London today. The Baltic Dry Index, a wider measure of costs, fell 1.3 percent to 684 points. Global grain exports will fall the most in 27 years in the 2012-13 marketing year as the drought curbs shipments from the world’s largest supply country, U.S. Department of Agriculture data show. Canceled grains cargoes mean owners of vessels are undercutting each other or dropping anchor waiting for employment, said Fearnleys A/S, an Oslo-based shipbroker. “The horizon does not look very bright,” Fearnleys said in a report today. “Only a few forward cargoes of grains are being quoted in the market.”
Panamaxes joining the fleet jumped 43 percent in the last two quarters, adding new vessels at the fastest pace since 2001, according to data from Macquarie Research and Clarkson (CKN) Plc. Daily earnings to hire Panamaxes for voyages across the Atlantic Ocean fell the most since Feb. 12, sliding 9.5 percent to $4,153, the lowest since Dec. 18, 2008, exchange data show.

20120906 1019 Soy Oil & Palm Oil Related News.

Pro Farmer: After the Bell Soybean Recap (CME)
Soybean futures closed with losses of 17 1/2 to 23 cents in the September through March contracts. Farther deferred futures posted losses in the 5 to 10-cent range. Soybean futures faced pressure from weakness in the cash market. The bulk of the pressure on soybean basis is coming from interior bids in anticipation of the start of harvest. Still, basis remains strong overall amid tight supplies and active global end-user demand. That should limit near-term downside pressure on basis and futures.

Soybean Complex Market Recap (CME)
November Soybeans finished down 20 3/4 at 1747 1/2, 22 1/4 off the high and 5 up from the low. January Soybeans closed down 20 at 1746 1/4. This was 4 1/4 up from the low and 21 1/4 off the high. December Soymeal closed down 8.4 at 525.0. This was 1.7 up from the low and 9.1 off the high. December Soybean Oil finished down 0.25 at 57.97, 0.27 off the high and 0.31 up from the low.
November soybeans traded sharply lower into the close and settled near the lows of the day. Pressure was also seen in soybean meal and soybean oil throughout today's trade. Thoughts that recent rainfall has benefited soybeans crops in the eastern Corn Belt, along with views that the market may be slightly overbought triggered profit taking by bulls and added to the downside momentum. Gulf of Mexico soybean basis was mostly steady today on slow barge movement down the Mississippi River. Processor bids in the central Midwest have weakened this week as traders await new crop harvest. Calendar spread weakness along with the soft cash market offered a negative tilt to the market throughout the day. Outside markets were mixed with US Stocks trading slightly higher and the US dollar traded lower for most of the day but offered limited support to soybeans.

Malaysian crude palm oil prices slipped to a one-week low on market expectations of rising stockpiles in the world's second biggest producer. (Reuters)