Commodities Drop to 10-Month Low as Slowing Global Growth May Crimp Demand (Source: Bloomberg)
Commodities fell to a 10-month low on increasing concern that stagnant global growth will crimp demand for metals, energy and agriculture. The Standard & Poor’s GSCI Spot Index dropped 5.38, or 0.9 percent, to close at 585.62, after touching 580.22, the lowest since Dec. 1. The gauge tumbled 12 percent in the third quarter, the most since the final quarter of 2008. Global equities slumped on concern that Europe’s debt crisis will worsen and derail expansion. The GSCI Index has lost more than 20 percent since reaching an almost three-year high in April as slowing growth reduced the chances of shortages for raw materials. Money managers cut bets on a commodity rally 26 percent in the week to Sept. 27, the most in almost three years, government data show.
Goldmans Slashes Grain Price Estimates On USDA Stocks Data (Source: CME)
Goldman Sachs downgraded its grain price forecasts, after higher-than-expected U.S. stocks data last week eased fears of a shortfall of corn supplies. Grain analyst Damien Courvalin slashed his estimates for Chicago corn prices over the next three- to six-months to $6.15 a bushel from $7.35/bu and to $5.50/bu from $7.00/bu over the next year, citing data from the U.S. Department of Agriculture showing inventories "well above our and consensus expectations." For wheat, he lowered estimates from $7.50/bu, $7.90/bu and $7.50/bu to $6.40/bu, $6.50/bu and $6.00/bu on the back of both lower-than-expected corn prices and consensus-beating wheat stocks. Grain prices plummeted Friday after the USDA stunned markets by pegging domestic corn inventories at 1.128 billion bushels as of Sept. 1--23% higher than a forecast released a fortnight ago by a different division of the USDA and well above market forecasts of below 1 billion bushels.
Significantly, stocks of wheat, a key corn feed substitute, also came in well above market expectations at 2.15 billion bushels, implying that recent high prices had started to reduce demand more than many had predicted. "We expect these higher 2011-12 corn beginning stocks to more than offset our forecast for lower new-crop corn production and allow for both stronger demand and higher ending stocks than we had previously expected," said Courvalin in a note. Meanwhile the "the recent record-high wheat-to-corn price correlation will likely decline" as higher supplies encourage less substitution, he said. The data was also bearish enough for Courvalin to downgrade Goldman's top bullish call, soybeans. He cut his price forecasts from $13.75/bu, $14.00/bu and $14.00/bu over the next three, six and 12 months to $12.60/bu, $13.00/bu and $13.00/bu respectively.
But he said that he expected soybean prices to outperform corn as "the tightening of the soybean balance relative to the corn balance will likely intensify the competition for U.S. acreage next spring," while the La Nina weather pattern this spring could present further world production risks.
Corn (Source: CME)
US corn futures end flat, finding stability after earlier plunging near a 10-month low. The exhaustion of fund-inspired liquidation and commercial bargain-hunting buying provided support to buoy prices, analysts say. However, global economic worries tied to Greece's unresolved debt issues and harvest-related selling applied pressure to cap advances, analysts add. Market was oversold, after adequately digesting Friday's unexpected government stocks report revealing larger-than-expected inventories. CBOT Dec corn finished unchanged at $5.92 1/2/bushel.
Wheat (Source: CME)
US wheat futures end mixed, with Chicago wheat bouncing in a recovery from last week's sharp declines. Signs of stability in neighboring grain futures attracted buying, but Minneapolis spring wheat futures were unable to sustain any price strength, as traders adjusted prices to catch up with the losses seen in other markets late last week, analysts say. However, spring wheat futures did move significantly off initial lows, pick up the buying that buoyed other grain markets. CBOT Dec wheat end up 10 1/4c at $6.19 1/2/bushel, MGEX Dec wheat finished down 7c at $8.85 1/4, and KCBT Dec wheat end down 2c at $7.02.
Rice (Source: CME)
US rice futures end higher, recovering from last week's setback. The advances were fueled by ongoing concerns about US output and stability in across grain markets. CBOT Nov rice climbed 4c or 0.3% to $15.99 per hundredweight.
China's corn rush to redraw global food landscape
SINGAPORE, Sept 30 (Reuters) - When China abandoned its soybean self-sufficiency quest almost 20 years ago and started importing the oilseed feeding its hunger for livestock, it almost single-handedly transformed the industry. Today, it's poised to do the same for corn.
The world's most populous nation is expected to triple corn purchases next crop year and, by its own admission, become a significant importer by 2015, putting more strain on global food supplies at a time when inflation is gnawing away at economic growth and the population nears seven billion.
Corn at 9-1/2 month low on inventory surprise, economic gloom
SINGAPORE, Oct 3 (Reuters) - U.S. corn slid 1.5 percent to its lowest since December after suffering its biggest monthly decline in more than 15 years in September as larger-than-expected supplies continued to hammer the market.
"It is something the market had not expected as everyone was talking about tightening supplies, it was a surprise," said Ker Chung Yang, a commodities analyst at Phillip Futures in Singapore.
US corn export dominance to bend, not break
CHICAGO, Sept 30 (Reuters) - For the first time in 40 years, U.S. corn exporters are not out-selling the rest of the world. Domestic ethanol is sucking up record crops.
Emerging suppliers like Brazil and Ukraine are taking export share, while traditional exporters like Argentina move to open new markets.
Russia may export 25 mln T grain in 2011-2012-lobby
MOSCOW, Oct 3 (Reuters) - Russia may export 25 million tonnes of grain in 2011-2012 and the country's grain crop may reach 93 million tonnes, Arkady Zlochevsky, the president of the Russian grain Union, the industry lobby, said on Monday.
"We will have an exportable surplus of 30 million tonnes but we'll manage to export around 25 million tonnes," Zlochevsky told journalists.
Philippines says typhoons damage nearly 450,000 T rice
MANILA, Oct 3 (Reuters) - Two powerful typhoons that hit northern Philippines in less than a week may have damaged more than 448,000 tonnes of paddy rice, prompting agriculture officials to hold an emergency meeting on Monday to discuss the country's rice supply situation.
The damaged crop was estimated to be equivalent to about 291,505 tonnes milled rice, and accounted for 6.9 percent of forecast national output of 6.5 million tonnes in the last quarter of 2011.
Argentine wheat still in need of rains - gov't
BUENOS AIRES, Sept 30 (Reuters) - Argentine wheat plants are badly in need of heavier rains despite scattered showers that helped speed corn plantings in some areas this week, the Agriculture Ministry said on Friday.
Argentina, a leading global wheat exporter and key supplier to neighboring Brazil, forecasts lower 2011/12 output of between 11 million and 13 million tonnes compared with 14.7 million last season due to recent dry weather.
Ukraine 2012 winter grain sowing 57 pct completes
KIEV, Sept 30 (Reuters) - Ukrainian farms have sown 4.7 million hectares of winter grains for the 2012 harvest or 57 percent of the expected area, the Agriculture Ministry said on Friday.
The ministry said in a statement the ex-Soviet republic sowed 5.04 million hectares of winter grains at the same date in 2010.
Ukraine trader HIB exports 450,000 T grain so far
KIEV, Sept 30 (Reuters) - Ukraine's major grain exporter HlibinvestBud (HIB) exported about 450,000 tonnes of wheat and barley in the first three months of the 2011/12 season, it said on Friday.
HIB, which plans to export 5 million tonnes of grain this season ,also said it had bought 3.0 million tonnes of grain from local producers for future exports.
Italy 2011 maize output seen up to 10.5-11.0 mln T
MILAN, Sept 30 (Reuters) - Output of maize in Italy, a major producer in Europe, is expected to rise to 10.5-11.0 million tonnes this year from 8.6 million tonnes in 2010 due to increased planted areas and strong yields per hectare, according to estimates by major Italian farmers' associations provided by their biggest group, Coldiretti, on Friday.
"As far as areas is concerned, we can confirm the earlier estimate of more than 1 million hectares. As far as production is concerned, the estimate is between 10.5 million tonnes and 11.0 million tonnes. Yields are very good this year and we have a big increase in production," Coldiretti's grain specialist Paolo Abballe told Reuters.
Thailand's Rice Policy Already Causing Ripple Effects (Source: CME)
It's not yet in effect, and yet Thailand's controversial new rice policy is already having some unintended consequences. Farmers are reported to be hoarding crops, while some buyers overseas are shifting to consuming more noodles instead of rice, a phenomenon that could have long-term effects on the global rice market if it continues. In the run-up to national elections earlier this year, Thailand's Puea Thai party promised the government would buy un-milled, or paddy, rice from growers at THB15,000/ton, or about 50% above the market prices then. Now in power, Puea Thai is gearing up to honor its election promise by Oct. 7. The government is likely to do this by arranging for rice to be bought by millers, instead of via direct state purchases. Sensing opportunity, growers and millers are hoarding rice to be delivered to the government program likely at a substantial profit once the program begins.
Moreover, with millers likely deputed to buy paddy from growers and store the grain on the government's behalf, a window has opened to pass off some of the old crop as this year's new crop at sharply higher prices, pocketing the government subsidy, Chookiat Ophaswongse, former president of Thai Rice Exporters Association told Southeast Asia Real Time. Industry calculations show higher procurement prices would mean the export price of 5% broken Thai rice should be around $830/ton. Growers and millers have seen prices of 5% broken rice move from $500/ton to above $600/ton since early July, so it makes sense to hoard. Ironically, the Thai policy will also push up the country's rice inventories despite a bumper crop. Last week, the London-based International Grains Council revised lower its forecast of Thailand's rice exports in 2012 by 9% to 8.0 million tons, as high government procurement prices slow shipments.
The world's largest rice exporter's shipments will likely be 20% lower compared with 2011, the IGC said. The impact has been felt beyond national borders. Export prices in neighboring Vietnam have also risen by $80-$100/ton. Exporters have washed out trades or renegotiated earlier contracts at higher prices. Indonesia, the world's largest rice importer this year, is grappling with high inflation and consumers are changing dietary habits to keep a check on the monthly food bill. In one of those changes, the country is undergoing a shift in consumption towards noodles from rice, and the trend may accelerate as prices of rice rise, a senior research analyst with Standard Chartered Bank, Nirgunan Tiruchelvam told Southeast Asia Real Time. Noodles are made from wheat, which can be imported at less than $350/ton compared with rice prices above $550/ton.
Those ripple effects are examples of how government policies sometimes unwittingly increase rather than control food prices. Rice is the world's most widely-consumed staple food. Almost half of the world's rice exports are accounted for by Thailand and Vietnam, which have had a string of bumper crops, but to no avail as far cooling prices is concerned. Indeed, the world is heading for the second successive year of record rice production. International Grains Council forecasts show 2011-12 production at 461 million metric tons, up 2.2% on year. Carry-over stocks in five major exporters - Thailand, Vietnam, Pakistan, India and the U.S. - are projected to hit a record 33.2 million tons. Yet, prices are still rising. In the past year when prices of wheat, corn and oilseeds rose to multi-year highs, rice was an exception. Not anymore. Export prices in Thailand and Vietnam, have risen by up to 25% since the start of July.
All this is happening when India, with government stocks of 22.7 million tons รข€“ nearly as much as the annual global trade of 32 million tons - is expecting another bumper harvest this month onwards. Indian supply can be a cooling factor in rice prices, but the government there has allowed exports of only two million tons from the open market, for now. With governments refusing to let markets function freely, it may take more than a good crop to make rice cheaper. It may become a classic case of rice, rice everywhere, not a grain to eat.
Kazakhstan Harvests 22.7M Tons Grain To Oct. 3 (Source: CME)
Kazakhstan harvested 22.7 million metric tons of grain to Oct. 3 on 14 million hectares, or 86.8% of the total area to be harvested, with the average yield of 1.62 tons a hectare, the agriculture ministry reported. On the same date last year, the harvest was reported at 13.325 million tons on 15.243 million hectares with the average yield of 0.87 tons a hectare. The ministry said Sept. 22 Kazakhstan was likely to harvest this year 25 million metric tons of grain. In 2010 because of drought Kazakhstan's grain harvest was 12.2 million tons. The country exported in the 2010-2011 marketing year 5.9 million tons of grain.
ICE coffee hits 8-month low as commodities slide
LONDON, Oct 3 (Reuters) - ICE coffee, cocoa and sugar futures all slid in early trade, weighed by broad-based selling in crude oil and other commodity markets linked to a stronger dollar and global economic woes.
Arabica coffee futures fell to the lowest level in more than eight months, joining the retreat in commodity markets.
Indonesia's Sept Sumatra coffee exports fall 70.6 pct y/y
BANDAR LAMPUNG, Indonesia, Oct 3 (Reuters) - Indonesia's robusta coffee bean exports from the main growing area in southern Sumatra fell 70.6 percent in September to 10,435.05 tonnes from the same month a year earlier, government trade data showed on Monday.
Indonesia is the world's fourth-largest coffee producer after Brazil, Colombia and Vietnam, and the world's number two robusta coffee producer after Vietnam.
India Oct-Sept'11 coffee exports jump 33 pct-board
Oct 3 (Reuters) - Coffee exports from India jumped 33 percent to 358,278 tonnes in the coffee year to September, helped by shipments to Italy and Germany, the board said in a statement on Monday.
India, the world's fifth biggest producer, accounts for only 4.5 percent of the world's coffee output, but exports 70 to 80 percent of this. Italy, Russia and Germany are the top three buyers of Indian coffee.
Indonesia Sulawesi Sept cocoa exports plunge 60.8 pct y/y
JAKARTA, Oct 3 (Reuters) - Indonesia's cocoa bean exports from the main growing island of Sulawesi dropped 60.8 percent to 7,388.28 tonnes in September from 18,849 tonnes a year earlier, industry data showed on Monday.
Indonesia, the world's third-largest cocoa producer after Ivory Coast and Ghana, accounts for around 10 percent of the world's output.
Indonesia's cup of cocoa woes could cheer world market
SINGAPORE/JAKARTA, Sept 30 (Reuters) - A plunge in Indonesia's cocoa exports spotlights a flagging battle against disease and adverse weather, but the country's supply disruptions could allay fears of another global surplus and stem a seven-month slide in prices.
Although the outlook for world grindings may be clouded by the threat of recession, shrinking output in third-largest cocoa producer Indonesia will help balance the market in the next crop year after supply exceeded demand by 450,000 tonnes this year.
Egypt's Alcotexa sells 965 T cotton in past week
CAIRO, Oct 2 (Reuters) - Egypt's Alexandria Cotton Exporters' Association (Alcotexa) committed to sell 965 tonnes of cotton in the week which ended on Oct. 1, an Alcotexa official told Reuters on Sunday.
The sales comprised 540 tonnes of Giza 88 and 425 tonnes of Giza 86.
Brazil's northeast starts crushing bigger cane crop
SAO PAULO, Sept 30 (Reuters) - Brazil's northeast has begun crushing its 2011/12 cane crop, which is expected to be one of the largest ever, the head of the region's sugar cane industry association, Sindacucar, said on Friday.
The region, which usually accounts for 10 percent of the Brazilian cane output, is expected to harvest 66 million tonnes of cane, up from 63 million tonnes last season.
World coffee body's chief targets emerging consumers
LONDON, Sept 30 (Reuters) - The new head of the International Coffee Organization (ICO) wants to bring new impetus to promoting the drink in Asia and other emerging markets, notably those that produce coffee themselves, he said on Friday.
"We have (producing) countries that are showing growth in coffee consumption, like Indonesia, Mexico and India, and I want to see this growing more and more," Roberio Oliveira Silva told Reuters in an interview less than 24 hours after being appointed ICO executive director by the International Coffee Council.
ICO sees tight global coffee market in 2011/12
LONDON, Sept 30 (Reuters) - Global coffee consumption should outstrip production in 2011/12, leading to a "tight situation" with supplies, outgoing International Coffee Organization acting Executive Director Jose Sette said on Friday.
He said global coffee production in 2011/12 was seen around 129.5 million bags (60-kg) and consumption about 134 million bags.
Ivorian cocoa farmers upbeat on 2011/12 crop
SOUBRE, Ivory Coast, Sept 30 (Reuters) - Farmers in the heart of Ivory Coast's cocoa belt say they expect an abundant harvest in the new season, though production will not match the record 1.5 million tonnes of the season just ending.
Farmers in Soubre and Daloa regions, which account for about half of the country's production, said the current state of their crops has led them to expect total output of 1.3 million tonnes, close to a finance ministry forecast obtained earlier this week by Reuters.
U.S. coal consumption up 3 pct last week - Genscape
HOUSTON, Sept 30 (Reuters) - U.S. coal consumption rose 3 percent last week versus the week before but stayed unchanged from a year earlier, data from power industry data monitor Genscape showed.
Warmer weather spread last week in the populous East, WSI Corp weather service said. A slight uptick in nuclear plant outages boosted coal use despite cheapening natural gas.
Euro Coal-Prices stable, market eyes Korea
LONDON, Sept 30 (Reuters) - Prompt physical coal prices were again little changed on Friday, having moved minimally on a daily basis this week due to a lack of demand in Europe and Asia for spot coal.Few trades were reported.
"Prices have barely moved and there haven't been many bids or offers, it's been thin," one European trader said.
Record U.S. Gasoline Cargoes Seen Driving 17% Tanker-Rate Advance: Freight (Source: Bloomberg)
Record U.S. exports of gasoline and other refined oil products are poised to eliminate a glut of ships hauling the fuels next year, driving freight rates to a three-year high. Shipments in the first nine months were 24 percent higher than a year earlier, led by cargoes to Latin America, Energy Department data show. Costs to hire medium-range tankers, holding enough gasoline to fill about 800,000 cars, will gain 17 percent to $14,000 a day next year, according to the median of seven analysts surveyed by Bloomberg. U.S. crude-oil output in the first nine months rose 1.7 percent, the highest for the period since 2003. Gasoline demand fell 3.7 percent in July to the lowest for the month in 11 years. At a time when ships hauling crude and coal are forecast to lose money for at least another two years, product tankers may break even as early as 2012. Billionaire Wilbur Ross completed his first shipping investment last month, joining a group of investors buying a fleet of 30 fuel carriers.
Iraq sees oil output at 3 mln bpd by year-end
BAGHDAD, Oct 3 (Reuters) - Iraq's oil production will reach 3 million barrels per day (bpd) by the end of this year from its current output of 2.9 million bpd, the Iraqi oil ministry said on Monday.
The ministry said crude exports from the OPEC member are expected to reach 2.5 million bpd at the start of next year.
Brent tumbles more than $1 on euro debt fears
SINGAPORE, Oct 3 (Reuters) - Brent crude fell more than $1 to below $102 as growing fears of the euro debt crisis spreading to other parts of the region and dampening global oil demand weighed heavily on investors.
"We need to keep a close on demand... (but) I am not predicting a major demand slump," he told the Middle East Petroleum and Gas conference in Dubai, delivering a speech for UAE Oil Minister Mohammed bin Dhaen al-Hamli.
China output drives stainless steel to record -ISSF
LONDON, Sept 30 (Reuters) - Global stainless steel production hit a new all-time high in the first half of 2011 as output growth in China offset a slowdown in most other regions, data showed on Friday.
Stainless steel production hit a record 16.4 million tonnes in the first half of 2011, up 3.8 percent from the same period last year, according to data from the International Stainless Steel Forum (ISSF).
Analysts see downward pressure on iron ore, freight
LONDON, Sept 30 (Reuters) - Traders and analysts warn of downside risks for both iron ore and freight prices in the short-term, even though the cost of shipping iron ore to China unexpectedly spiked this month and iron ore miners are boasting of full order books.
Average earnings for capesizes, which typically haul 150,000 tonne cargoes such as iron ore and coal, have risen to their highest level in nine months this month and miner BHP Billiton paid $12.45 a tonne to ship iron ore from Australia to China, the highest rate since November last year.
Oil Declines for Third Day on European Debt Crisis, Rising Crude Supplies (Source: Bloomberg)
Oil dropped a third day in New York as investors speculated that Europe’s debt crisis will slow the economy and curb fuel demand as crude supplies climb. Futures slipped as much as 2.2 percent today after falling to the lowest settlement in more than a year yesterday. European governments signaled investors may have to take bigger losses on Greek debt in a second aid package for the nation. U.S. crude inventories climbed for a second week, an Energy Department report tomorrow may show. Libya aims to raise production to more than 500,000 barrels a day by the end of this month. “We are seeing continuing pressure across the commodities complex from these concerns about the global growth prospect,” said Michael McCarthy, a chief market strategist at CMC Markets Asia Pacific Pty Ltd. in Sydney. “The markets are universally bearish and we’re looking for reasons to sell and the oil markets are being affected by that.”
Iron Ore-Spot prices seen near 3-month lows, China off
SINGAPORE, Oct 3 (Reuters) - Spot iron ore prices are expected to steady near three-month lows this week with top importer China off for a week-long holiday after ending the third quarter nearly flat as Chinese demand slowed last month.
Slower steel demand in China, the world's biggest consumer and producer, drove Shanghai rebar futures down more than 11 percent in September, their biggest monthly loss ever.
Analysts see downward pressure on iron ore, freight
LONDON, Sept 30 (Reuters) - Traders and analysts warn of downside risks for both iron ore and freight prices in the short-term, even though the cost of shipping iron ore to China unexpectedly spiked this month and iron ore miners are boasting of full order books.
Average earnings for capesizes, which typically haul 150,000 tonne cargoes such as iron ore and coal, have risen to their highest level in nine months this month and miner BHP Billiton paid $12.45 a tonne to ship iron ore from Australia to China, the highest rate since November last year.
China output drives stainless steel to record -ISSF
LONDON, Sept 30 (Reuters) - Global stainless steel production hit a new all-time high in the first half of 2011 as output growth in China offset a slowdown in most other regions, data showed on Friday.
Stainless steel production hit a record 16.4 million tonnes in the first half of 2011, up 3.8 percent from the same period last year, according to data from the International Stainless Steel Forum (ISSF).
China 2012 base metals demand seen up, hinges on credit
HONG KONG, Sept 30 (Reuters) - China's base metals consumption growth rate could slow further next year as exports fall, even if Beijing starts to loosen monetary policy after the first quarter.
A possible debt crisis in developed countries and Beijing's credit tightening are the two major factors that could slow demand in the world's top consumer and producer of most base metals.
METALS-Copper falls for a fourth day; Shanghai shut
SINGAPORE, Oct 3 (Reuters) - Copper fell for a fourth session in a row on Monday, extending losses after suffering its worst quarter in nearly three years, as a firmer dollar and risks of an economic slowdown kept buyers at bay.
Three-month copper on the London Metal Exchange dropped 2.6 percent to $6,835 a tonne by 0403 GMT, after shedding 26 percent in the September quarter, its worst showing since the final three months of 2008.
PRECIOUS-Gold extends gains, equities drop on Europe debt fears
SINGAPORE, Oct 3 (Reuters) - Gold strengthened further on Monday as falling equities and lingering worries about a debt crisis in Europe drew investors to the precious metal, which posted its the biggest quarterly gain this year, but a firm U.S. dollar could still cap gains.
Stocks slipped in Asia and the euro fell on anxiety the euro zone's debt crisis will dampen global growth after the Greek government said it will miss a deficit target set just months ago in a massive bailout package.
Baltic index drops, China books more coal cargoes
LONDON, Sept 30 (Reuters) - The Baltic Exchange's main sea freight index, which tracks rates to ship dry commodities, fell again for the fourth day on Friday as lighter bookings continued to trim gains made on the capesize market.
The main index fell by 14 points or 0.73 percent to 1,899 points.
Tuesday, October 4, 2011
20111004 1010 Soy Oil & Palm Oil Related News.
Soybeans (Source: CME)
US soybean and product futures end slightly lower, with beans managing to bounce back from an early slide to nearly 1-year lows. Fund liquidation pressured prices initially, but once exhausted, bargain-hunting surfaced. Futures pushed higher through midday, but ongoing concerns about global economic risks and seasonal harvest pressure capped advances, triggering late-session profit taking. CBOT November soy ended down 1 1/2c at $11.77 1/2 a bushel.
Soybean Meal/Oil (Source: CME)
December soymeal fell $1.60 to $307/short ton and December soyoil dropped 0.21c to 50c/pound.
Palm oil hits new one-year lows on economic woes
KUALA LUMPUR, Oct 3 (Reuters) - Malaysian palm oil futures tumbled to fresh one-year lows on concerns that the euro zone's deepening debt crisis will stall global growth and commodity demand.
"The market has really gone down more than it should have purely because of the weak economic outlooks," said a trader with a foreign commodities brokerage in Kuala Lumpur.
Wave of rains heads for Brazil main soy belt -Somar
SAO PAULO, Sept 30 (Reuters) - Planting of Brazil's new soybean crop will spread quickly across the No.1 growing state of Mato Grosso, now that forecasters have projected several days of widespread rains over the main center-west grain belt.
The series of cold fronts that will wash over the region should mark the end of the traditional dry season and unleash widespread planting of Brazil's new soy and corn crops that will be harvested in the first half of 2012.
India may make refined palm oil import costlier -sources
NEW DELHI, Sept 30 (Reuters) - India, the world's top buyer of vegetable oils, is likely to make imports of refined palm oil costlier by raising their base price, government and trade sources said, responding to tax changes by Indonesia that have put at risk the survival of Indian refiners.
But the government is unlikely to make any changes in the import duty of 7.7 percent levied on refined palm oil for fear of stoking already high inflation, especially during the festive season, when demand for edible oils is higher.
Indonesia, India may explore palm oil, rice pact
JAKARTA, Sept 30 (Reuters) - Indonesia and India discuss trade next week with rice and edible oils likely to be on the agenda as Jakarta faces cuts in supplies of the grain from Thailand and New Delhi considers retaliation for a hike in crude palm oil prices.
India, the world's biggest buyer of vegetable oils, is sending Trade Minister Anand Sharma to visit Jakarta, capital of the world's biggest palm oil producer, on Tuesday, barely a month after Indonesia moved to boost its refined palm oil exports by reducing taxes on the product, and hiking tariffs on crude palm oil.
Crude palm oil (CPO) futures fell to its lowest in almost a year with the benchmark CPO for three-month delivery falling RM60 to RM2,845 a tonne. While the drop in CPO was anticipated due to losses in soybean prices on the Chicago Board of Trade, dealers said basically, speculators had reduced their positions, driven by a weak trend in overseas markets.
US soybean and product futures end slightly lower, with beans managing to bounce back from an early slide to nearly 1-year lows. Fund liquidation pressured prices initially, but once exhausted, bargain-hunting surfaced. Futures pushed higher through midday, but ongoing concerns about global economic risks and seasonal harvest pressure capped advances, triggering late-session profit taking. CBOT November soy ended down 1 1/2c at $11.77 1/2 a bushel.
Soybean Meal/Oil (Source: CME)
December soymeal fell $1.60 to $307/short ton and December soyoil dropped 0.21c to 50c/pound.
Palm oil hits new one-year lows on economic woes
KUALA LUMPUR, Oct 3 (Reuters) - Malaysian palm oil futures tumbled to fresh one-year lows on concerns that the euro zone's deepening debt crisis will stall global growth and commodity demand.
"The market has really gone down more than it should have purely because of the weak economic outlooks," said a trader with a foreign commodities brokerage in Kuala Lumpur.
Wave of rains heads for Brazil main soy belt -Somar
SAO PAULO, Sept 30 (Reuters) - Planting of Brazil's new soybean crop will spread quickly across the No.1 growing state of Mato Grosso, now that forecasters have projected several days of widespread rains over the main center-west grain belt.
The series of cold fronts that will wash over the region should mark the end of the traditional dry season and unleash widespread planting of Brazil's new soy and corn crops that will be harvested in the first half of 2012.
India may make refined palm oil import costlier -sources
NEW DELHI, Sept 30 (Reuters) - India, the world's top buyer of vegetable oils, is likely to make imports of refined palm oil costlier by raising their base price, government and trade sources said, responding to tax changes by Indonesia that have put at risk the survival of Indian refiners.
But the government is unlikely to make any changes in the import duty of 7.7 percent levied on refined palm oil for fear of stoking already high inflation, especially during the festive season, when demand for edible oils is higher.
Indonesia, India may explore palm oil, rice pact
JAKARTA, Sept 30 (Reuters) - Indonesia and India discuss trade next week with rice and edible oils likely to be on the agenda as Jakarta faces cuts in supplies of the grain from Thailand and New Delhi considers retaliation for a hike in crude palm oil prices.
India, the world's biggest buyer of vegetable oils, is sending Trade Minister Anand Sharma to visit Jakarta, capital of the world's biggest palm oil producer, on Tuesday, barely a month after Indonesia moved to boost its refined palm oil exports by reducing taxes on the product, and hiking tariffs on crude palm oil.
Crude palm oil (CPO) futures fell to its lowest in almost a year with the benchmark CPO for three-month delivery falling RM60 to RM2,845 a tonne. While the drop in CPO was anticipated due to losses in soybean prices on the Chicago Board of Trade, dealers said basically, speculators had reduced their positions, driven by a weak trend in overseas markets.
- Another palm oil trader said the sharp sell-down did not quire make sense and it was not justifiable in spite of the softening in soybean trading. However, he said there could be a further decline in palm oil prices on weaker demand for soybean amid increased soybean supplies. (Starbiz)
Friday, September 30, 2011
20110930 1812 FCPO EOD Daily Chart Study.
Bollinger band reading : pullback correction downside biased.
MACD Histrogram : turned upward, seller taking profit.
Support : 2900, 2850, 2800, 2770 level.
Resistance : 2920, 2950, 2970, 3020 level.
Comment :
FCPO closed recorded small gain with quiet volume transacted. Overnight soy oil ended higher and currently trading firmer while crude oil currently trading little lower.
Soy oil recent severe falls into oversold level resulted trader to lock in profit covering short position pushed price little higher. Both cargo surveyor reported small decline in crude palm oil export for the month of Sep 2011.
Daily chart formed a down doji bar candle closed above lower Bollinger band level after market opened gap up and traded side way within tide 21 points range bound market followed by last half an hour sell down activities pressed price lower tested below support level before recovered upward to closed off the low of the day
Technical reading suggesting a pullback correction downside biased market development testing support and resistance level.
When to buy : buy at support or weakness with quick cut loss and profit target.
When to sell : sell at resistant or strength with quick cut loss and profit target.
20110930 1749 FKLI EOD Daily Chart Study.
FKLI closed : 1381.5, changed : -11.5 points, volume : lower(higher for Oct contract).
Bollinger band reading : pullback correction downside biased.
MACD Histrogram : recovering, seller closing position.
Support : 1375, 1360, 1350, 1345 level.
Resistance : 1385, 1395, 1400, 1420 level.
Comment :
FKLI closed recorded loss lower volume traded with Oct 2011 contract doing 10.5 points discount compare to cash market nearly unchanged. Overnight U.S. market closed higher and today's Asia markets ended mostly lower while European markets currently trading in red registering loss.
Overnight market traded positive after Germany parliament approved plan to provide additional aid to Greece and U.S. better unemployment data but today reports from China's manufacturing data decline for a third month, the longest contraction since 2009, Deutsche Bank reported may lower its yearly profit target and German retail sales declined the most in more than four years in August lead most global markets to trade in negative territory.
Back home, KLCI cash market closed little lower probably due to 3rd quarter window dressing activities and coming 2012 budget speculation.
Daily chart formed a down doji bar candle closed nearer to middle Bollinger band level after market opened lower, edge up higher testing resistance level and fall lower followed by an about 13 points upward technical rebound before resume heading south reaching new low and recover slightly to closed off the low of the day.
Chart near term outlook still showing a pullback correction downside biased market development testing support and resistance level.
When to buy : buy at support or weakness with quick cut loss and profit target.
When to sell : sell at resistance or strength with moderate cut loss and profit target.
20110930 1706 Regional Markets EOD Daily Chart Study.
DJIA chart reading : side way range bound little downside biased
Hang Seng chart reading : correction range bound downside biased.
KLCI chart reading : pullback correction downside biased.
20110930 1630 Global Market & Commodities Related News.
Asia stocks fall in worst month since Oct 2008
HONG KONG, Sept 30 (Reuters) - Asian stocks fell extending the worst monthly performance since the most volatile days of the global financial crisis in October 2008, with Chinese shares racking up sharp losses.
"Window-dressing tends to support the market at the end of quarter, and some relief about Europe's situation after the German vote is also giving buyers more confidence," said Mitsushige Akino, chief fund manager at Ichiyoshi Investment Management Co.
China’s Manufacturing Contracts for Third Month, Longest Streak Since 2009 (Bloomberg)
A gauge of Chinese manufacturing shrank for a third month, the longest contraction since 2009, as measures of new orders and export demand declined. The reading of 49.9 for the September purchasing managers’ index, released by HSBC Holdings Plc and Markit Economics today, was unchanged from August and compared with a preliminary 49.4 figure published last week. The gauge was below 50, the level that separates expansion from contraction, for eight months through March 2009. Government curbs on lending and the real-estate industry to damp inflation are slowing growth in demand in the world’s second-largest economy. A slump in global investor confidence and heightened risks of recession in the U.S. and euro area economies are also weighing on the outlook for exports.
China Stocks Sink to April 2009 Low as Quarterly Losses Mount on Slowdown (Bloomberg)
China’s stocks fell, sending the benchmark index to its lowest close since April 2009, on signs growth is slowing as the government maintains measures to curb inflation and overseas demand for exports falters. Anhui Conch Cement Co. and Sany Heavy Industry Co. paced a decline by construction-related stocks after a manufacturing gauge contracted for a third month. Citic Securities Co. and Industrial Securities Co. led a drop among brokerages on concern share-price declines will curb trading revenue. China’s markets will be closed next week for holidays. The Shanghai Composite Index, which tracks the bigger of China’s stock exchanges, dropped 6.12 points, or 0.3 percent, to 2,359.22 at the 3 p.m. close. The CSI 300 Index (SHSZ300) lost 0.3 percent to 2,581.35.
European Stocks, U.S. Futures Fall on Economy (Bloomberg)
European stocks fell, trimming the benchmark Stoxx Europe 600 Index’s largest weekly advance in a year, as reports on Chinese manufacturing and German retail sales added to concern the economy is slowing. Asian shares and U.S. index futures declined. Deutsche Bank AG (DBK) lost 3.2 percent as Handelsblatt reported that Germany’s biggest lender may lower its yearly profit target. Metro AG (MEO) fell 1.7 percent as German retail sales declined the most in more than four years in August. The Stoxx 600 fell 1.1 percent to 226.3 at 8:09 a.m. in London. The measure has rallied 4.7 percent this week, the largest advance since July 2010, as policy makers increased efforts to contain the region’s debt crisis and U.S. employment and growth data exceeded forecasts. The gauge is still heading for the biggest quarterly decline since 2008, having plunged 17 percent since the end of June. The index has dropped 4.7 percent in September, a fifth straight month of losses.
FOREX-Euro drops in worst month in nearly a year
TOKYO, Sept 30 (Reuters) - The euro was on track for its worst monthly slide in nearly a year, slipping back towards an eight-month low against the dollar as equities took a hit, while selling by Japanese exporters pushed it closer to a 10-year low versus the yen.
"The euro weakened as strong selling by Japanese exporters emerged, but frankly looking at the recent volatility, a dip like that is still not hugely important," said Teppei Ino, a currency analyst at Bank of Tokyo-Mitsubishi UFJ.
Wheat eyeing first gain in 3 quarters, outpaces corn
SINGAPORE, Sept 30 (Reuters) - U.S. wheat futures rose for a second day and are on track for their first quarterly gain in three as dry weather threatens winter plantings around the world.
"The market is certainly quite concerned about the weather conditions in many parts of the world," said Luke Mathews, commodity strategist at Commonwealth Bank of Australia.
US corn export dominance seen bending, not breaking
CHICAGO, Sept 30 (Reuters) - For the first time in 40 years, U.S. corn exporters are not out-selling the rest of the world.
Domestic ethanol is sucking up record crops. Emerging suppliers like Brazil and Ukraine are taking export share, while traditional exporters like Argentina move to open new markets. And consumers worldwide are looking to save every penny, cutting shipping costs or using other types of feed.
Manila to wait before deciding on rice imports-official
MANILA, Sept 30 (Reuters) - There was no urgency for the Philippines to decide if it needed more rice imports after typhoon damage this week, an official from the Department of Agriculture said on Friday.
"We have to wait for the next typhoons to come in before we can decide if we need to import early," Segfredo Serrano, undersecretary for planning at the Agriculture department, told reporters.
Vietnam 2011/2012 coffee to arrive from late Nov-Vicofa
HANOI, Sept 30 (Reuters) - Vietnamese coffee beans from the next 2011/2012 crop are expected to arrive from late November and pick up in December, while production could be threatened by rains from storms later this year, a senior industry official said on Friday.
"The yield is high but rains and storms are developing which could affect the harvest," Deputy Chairman Do Ha Nam of the Vietnam Coffee and Cocoa Association (Vicofa) said in a telephone interview.
Brazilian to head International Coffee Organization
LONDON/BRASILIA, Sept 29 (Reuters) - Brazil will return to the helm of the International Coffee Organization, which on Thursday named a senior agriculture official from the world's top coffee growing country as its executive director.
Roberio Oliveira Silva, 48, director for coffee at Brazil's agriculture ministry, was appointed to the job by consensus after his Mexican rival withdrew, an ICO official said.
US approves Canada crops for biodiesel use
WINNIPEG, Manitoba, Sept 29 (Reuters) - The U.S. Environmental Protection Agency approved the use of Canadian crops such as canola and corn in U.S. biofuels on Thursday, a move that lifted Canadian canola prices and may help the U.S. meet its ambitious targets for biofuels.
The EPA's designation of Canadian crops as a renewable biomass will allow U.S. biofuel makers to collect tax credits for using them, said Canola Council of Canada president JoAnne Buth.
Brazil 12/13 cane growth seen limited if any-Datagro
SAO PAULO, Sept 29 (Reuters) - Cane output in Brazil's center-south next season will not vary much from what's being harvested now, since yields will require a few years to fully recover, analysts Datagro said on Thursday.
The next crop could actually be smaller than the current one as dry weather in 2011 has hurt the development of cane that will start to be harvested in April 2012, a condition similar to that seen last year.
Scattered rains help Argentine wheat and corn, more needed
BUENOS AIRES, Sept 29 (Reuters) - Patchy rains allowed some Argentine farmers to inch ahead with 2011/12 corn sowing in recent days and brought some respite to parched wheat crops, a grains exchange report said on Thursday.
Dryness in recent weeks has delayed corn planting and battered wheat crops in Argentina, a leading global wheat exporter and the world's No. 2 corn supplier.
Uganda govt sells a 19 pct stake in sugar producer
KAMPALA, Sept 29 (Reuters) - Uganda has sold a 19 percent stake in the country's second biggest sugar producer to Mauritius' Rai Holdings, and said the Mauritian firm must sell the stake to the public after five years, an official statement said on Thursday.
Uganda said last year it would sell its entire 49 percent stake in Kinyara Sugar Works though an Initial Public Offering in 2011. This had been delayed because of global market turmoil, the government said earlier this year.
UK wheat crop seen lower, rapeseed sharply up-NFU
LONDON, Sept 29 (Reuters) - UK wheat production for this year is estimated at 14.67 million tonnes, down 1.5 percent on the five-year average, Britain's National Farmers Union said on Thursday.
The country's rapeseed crop is, however, seen at a record 2.62 million tonnes, up 29 percent from the five-year average, the NFU added.
EU clears 341,000 tonnes wheat exports this week
PARIS, Sept 29 (Reuters) - The European Union this week granted export licences for 341,000 tonnes of soft wheat, taking the total since the beginning of the July 2011/June 2012 season to 3.5 million tonnes, official data showed on Thursday.
The total so far this season remained well below the level seen last season when 6.4 million tonnes of export licences had been cleared by the same stage in 2010/11.
CME wheat propped up by feeder interest? Gavin Maguire
--Gavin Maguire is a Reuters market analyst. The views expressed are his own. To get his real-time views on the market, please join the Global Ags Forum. --
CHICAGO, Sep 29 (Reuters) - Although not immune to the commodity-wide downturn seen in recent weeks, Chicago wheat futures have outperformed their higher-grade cousins in Minneapolis and Kansas City so far this month.
That has reversed a year-long trend that had seen Chicago wheat trade at a steep discount to wheat prices on other U.S. exchanges as buyers showed a broad preference for higher-quality wheat over the product traded in Chicago.
Indonesia eyes domestic rice due to costly imports
JAKARTA, Sept 29 (Reuters) - Indonesia is not solely dependent on Thailand or Vietnam for rice and is seeking cheaper imports, while state procurement agency Bulog should look to buy from domestic suppliers, the Indonesian agriculture minister said on Thursday.
Indonesian officials are in Bangkok to discuss the reported cancellation of a proposed sale of 300,000 tonnes of rice to Southeast Asia's biggest economy, agreed under the previous Thai administration.
Brent crude oil rises above $104, set for quarterly drop
SINGAPORE, Sept 30 (Reuters) - Brent crude rose above $104 a barrel on positive economic news, but prices this quarter remain on track for their biggest drop in 15 months on concerns that a slowing global economy will undercut fuel demand.
"Crude oil has been holding up quite well compared with the other asset classes such as equities," said Ker Chung Yang, a commodities analyst at Phillip Futures in Singapore, who forecasts U.S. crude will be between $80 and $90 by the end of this year. Prices ended at $91.38 a barrel in 2010.
Iron ore, coal beat paper commodities: Clyde Russell
--Clyde Russell is a Reuters market analyst. The views expressed are his own.--
SINGAPORE, Sept 29 (Reuters) - Want to find a commodity that's relatively unscathed by the recent turmoil? Look no further than iron ore and coal in Asia.
While trade in both is measured in billions of dollars a year, both have benefited from not being widely traded on paper exchanges such as ICE Futures Europe and the New York Mercantile Exchange.
Japan Q4 crude steel demand seen down 1.8 pct y/y
TOKYO, Sept 29 (Reuters) - Japanese demand for crude steel in October-December will be slightly below year-ago levels as a steep decline in steel exports will outweigh strong demand from the auto sector, the trade ministry said on Thursday.
The strong yen, higher exports from South Korea and China and uncertainty over the global economy cloud the outlook for exports after the turn of the year, a ministry official said.
Chile industry stronger in Aug, copper output down
SANTIAGO, Sept 29 (Reuters) - Chile's industrial output rose in August from July and was stronger than expected compared to a year ago, but copper output in the world's top producer of the metal sank on lower ore grades as the industry recovers from disruptions.
Industrial production rose a seasonally adjusted 1.3 percent in August from July, the government said on Thursday, boosted by manufacturing, and was up 1.7 percent from a year earlier.
Chile August copper output down 8.7 pct yr/yr
SANTIAGO, Sept 29 (Reuters) - Chile, which provides around a third of the world's copper, produced 427,420 tonnes of the metal in August, down 8.7 percent from the same month last year, the government said on Thursday.
Chile's July copper output fell 18 percent to 373,498 tonnes compared with the same period last year, the government reported last month, as the industry was hit by a wave of protests by mining workers demanding a bigger share of the copper price bonanza.
Copper eyes 2012 record on taut supply-Trafigura
LONDON, Sept 29 (Reuters) - Copper is set to print new records as soon as the second quarter of 2012 as top consumer China restocks, more than making up for softening demand from struggling economies in the West, a director at commodities heavyweight Trafigura said.
LME copper heads for worst month in three years
SHANGHAI, Sept 30 (Reuters) - London copper fell 2.4 percent heading for its worst month in three years on concerns that a global economic slowdown will hit demand for the metal and as Chinese investors closed out long positions.
"I think LME copper's fall today is quite normal in this volatile climate. Chinese investors are still feeling bearish since it's before a long holiday and the longs are exiting the markets," said Jinrui Futures analyst Zhao Kai.
Gold holds gains; heads for worst month since Oct '08
SINGAPORE, Sept 30 (Reuters) - Gold jumped more than 1 percent after Germany's approval for expanding the euro zone bailout fund offered temporary relief to investors, but the precious metal was heading for its worst monthly decline in three years.
"It seems that there are still hurdles ahead before the European debt crisis is resolved," said Ong Yi Ling, an analyst at Phillip Futures in Singapore.
METALS-LME copper heads for worst month in three years
SHANGHAI, Sept 30 (Reuters) - London copper fell 2.4 percent, heading for its worst month in three years on concerns that a global economic slowdown will hit demand for the metal and as Chinese investors closed out long positions.
"I think LME copper's fall today is quite normal in this volatile climate. Chinese investors are still feeling bearish since it's before a long holiday and the longs are exiting the markets," said Jinrui Futures analyst Zhao Kai.
PRECIOUS-Gold holds gains; heads for worst month since Oct '08
SINGAPORE, Sept 30 (Reuters) - Gold jumped more than 1 percent after Germany's approval for expanding the euro zone bailout fund offered temporary relief to investors, but the precious metal was heading for its worst monthly decline in three years.
"It seems that there are still hurdles ahead before the European debt crisis is resolved," said Ong Yi Ling, an analyst at Phillip Futures in Singapore.
HONG KONG, Sept 30 (Reuters) - Asian stocks fell extending the worst monthly performance since the most volatile days of the global financial crisis in October 2008, with Chinese shares racking up sharp losses.
"Window-dressing tends to support the market at the end of quarter, and some relief about Europe's situation after the German vote is also giving buyers more confidence," said Mitsushige Akino, chief fund manager at Ichiyoshi Investment Management Co.
China’s Manufacturing Contracts for Third Month, Longest Streak Since 2009 (Bloomberg)
A gauge of Chinese manufacturing shrank for a third month, the longest contraction since 2009, as measures of new orders and export demand declined. The reading of 49.9 for the September purchasing managers’ index, released by HSBC Holdings Plc and Markit Economics today, was unchanged from August and compared with a preliminary 49.4 figure published last week. The gauge was below 50, the level that separates expansion from contraction, for eight months through March 2009. Government curbs on lending and the real-estate industry to damp inflation are slowing growth in demand in the world’s second-largest economy. A slump in global investor confidence and heightened risks of recession in the U.S. and euro area economies are also weighing on the outlook for exports.
China Stocks Sink to April 2009 Low as Quarterly Losses Mount on Slowdown (Bloomberg)
China’s stocks fell, sending the benchmark index to its lowest close since April 2009, on signs growth is slowing as the government maintains measures to curb inflation and overseas demand for exports falters. Anhui Conch Cement Co. and Sany Heavy Industry Co. paced a decline by construction-related stocks after a manufacturing gauge contracted for a third month. Citic Securities Co. and Industrial Securities Co. led a drop among brokerages on concern share-price declines will curb trading revenue. China’s markets will be closed next week for holidays. The Shanghai Composite Index, which tracks the bigger of China’s stock exchanges, dropped 6.12 points, or 0.3 percent, to 2,359.22 at the 3 p.m. close. The CSI 300 Index (SHSZ300) lost 0.3 percent to 2,581.35.
European Stocks, U.S. Futures Fall on Economy (Bloomberg)
European stocks fell, trimming the benchmark Stoxx Europe 600 Index’s largest weekly advance in a year, as reports on Chinese manufacturing and German retail sales added to concern the economy is slowing. Asian shares and U.S. index futures declined. Deutsche Bank AG (DBK) lost 3.2 percent as Handelsblatt reported that Germany’s biggest lender may lower its yearly profit target. Metro AG (MEO) fell 1.7 percent as German retail sales declined the most in more than four years in August. The Stoxx 600 fell 1.1 percent to 226.3 at 8:09 a.m. in London. The measure has rallied 4.7 percent this week, the largest advance since July 2010, as policy makers increased efforts to contain the region’s debt crisis and U.S. employment and growth data exceeded forecasts. The gauge is still heading for the biggest quarterly decline since 2008, having plunged 17 percent since the end of June. The index has dropped 4.7 percent in September, a fifth straight month of losses.
FOREX-Euro drops in worst month in nearly a year
TOKYO, Sept 30 (Reuters) - The euro was on track for its worst monthly slide in nearly a year, slipping back towards an eight-month low against the dollar as equities took a hit, while selling by Japanese exporters pushed it closer to a 10-year low versus the yen.
"The euro weakened as strong selling by Japanese exporters emerged, but frankly looking at the recent volatility, a dip like that is still not hugely important," said Teppei Ino, a currency analyst at Bank of Tokyo-Mitsubishi UFJ.
Wheat eyeing first gain in 3 quarters, outpaces corn
SINGAPORE, Sept 30 (Reuters) - U.S. wheat futures rose for a second day and are on track for their first quarterly gain in three as dry weather threatens winter plantings around the world.
"The market is certainly quite concerned about the weather conditions in many parts of the world," said Luke Mathews, commodity strategist at Commonwealth Bank of Australia.
US corn export dominance seen bending, not breaking
CHICAGO, Sept 30 (Reuters) - For the first time in 40 years, U.S. corn exporters are not out-selling the rest of the world.
Domestic ethanol is sucking up record crops. Emerging suppliers like Brazil and Ukraine are taking export share, while traditional exporters like Argentina move to open new markets. And consumers worldwide are looking to save every penny, cutting shipping costs or using other types of feed.
Manila to wait before deciding on rice imports-official
MANILA, Sept 30 (Reuters) - There was no urgency for the Philippines to decide if it needed more rice imports after typhoon damage this week, an official from the Department of Agriculture said on Friday.
"We have to wait for the next typhoons to come in before we can decide if we need to import early," Segfredo Serrano, undersecretary for planning at the Agriculture department, told reporters.
Vietnam 2011/2012 coffee to arrive from late Nov-Vicofa
HANOI, Sept 30 (Reuters) - Vietnamese coffee beans from the next 2011/2012 crop are expected to arrive from late November and pick up in December, while production could be threatened by rains from storms later this year, a senior industry official said on Friday.
"The yield is high but rains and storms are developing which could affect the harvest," Deputy Chairman Do Ha Nam of the Vietnam Coffee and Cocoa Association (Vicofa) said in a telephone interview.
Brazilian to head International Coffee Organization
LONDON/BRASILIA, Sept 29 (Reuters) - Brazil will return to the helm of the International Coffee Organization, which on Thursday named a senior agriculture official from the world's top coffee growing country as its executive director.
Roberio Oliveira Silva, 48, director for coffee at Brazil's agriculture ministry, was appointed to the job by consensus after his Mexican rival withdrew, an ICO official said.
US approves Canada crops for biodiesel use
WINNIPEG, Manitoba, Sept 29 (Reuters) - The U.S. Environmental Protection Agency approved the use of Canadian crops such as canola and corn in U.S. biofuels on Thursday, a move that lifted Canadian canola prices and may help the U.S. meet its ambitious targets for biofuels.
The EPA's designation of Canadian crops as a renewable biomass will allow U.S. biofuel makers to collect tax credits for using them, said Canola Council of Canada president JoAnne Buth.
Brazil 12/13 cane growth seen limited if any-Datagro
SAO PAULO, Sept 29 (Reuters) - Cane output in Brazil's center-south next season will not vary much from what's being harvested now, since yields will require a few years to fully recover, analysts Datagro said on Thursday.
The next crop could actually be smaller than the current one as dry weather in 2011 has hurt the development of cane that will start to be harvested in April 2012, a condition similar to that seen last year.
Scattered rains help Argentine wheat and corn, more needed
BUENOS AIRES, Sept 29 (Reuters) - Patchy rains allowed some Argentine farmers to inch ahead with 2011/12 corn sowing in recent days and brought some respite to parched wheat crops, a grains exchange report said on Thursday.
Dryness in recent weeks has delayed corn planting and battered wheat crops in Argentina, a leading global wheat exporter and the world's No. 2 corn supplier.
Uganda govt sells a 19 pct stake in sugar producer
KAMPALA, Sept 29 (Reuters) - Uganda has sold a 19 percent stake in the country's second biggest sugar producer to Mauritius' Rai Holdings, and said the Mauritian firm must sell the stake to the public after five years, an official statement said on Thursday.
Uganda said last year it would sell its entire 49 percent stake in Kinyara Sugar Works though an Initial Public Offering in 2011. This had been delayed because of global market turmoil, the government said earlier this year.
UK wheat crop seen lower, rapeseed sharply up-NFU
LONDON, Sept 29 (Reuters) - UK wheat production for this year is estimated at 14.67 million tonnes, down 1.5 percent on the five-year average, Britain's National Farmers Union said on Thursday.
The country's rapeseed crop is, however, seen at a record 2.62 million tonnes, up 29 percent from the five-year average, the NFU added.
EU clears 341,000 tonnes wheat exports this week
PARIS, Sept 29 (Reuters) - The European Union this week granted export licences for 341,000 tonnes of soft wheat, taking the total since the beginning of the July 2011/June 2012 season to 3.5 million tonnes, official data showed on Thursday.
The total so far this season remained well below the level seen last season when 6.4 million tonnes of export licences had been cleared by the same stage in 2010/11.
CME wheat propped up by feeder interest? Gavin Maguire
--Gavin Maguire is a Reuters market analyst. The views expressed are his own. To get his real-time views on the market, please join the Global Ags Forum. --
CHICAGO, Sep 29 (Reuters) - Although not immune to the commodity-wide downturn seen in recent weeks, Chicago wheat futures have outperformed their higher-grade cousins in Minneapolis and Kansas City so far this month.
That has reversed a year-long trend that had seen Chicago wheat trade at a steep discount to wheat prices on other U.S. exchanges as buyers showed a broad preference for higher-quality wheat over the product traded in Chicago.
Indonesia eyes domestic rice due to costly imports
JAKARTA, Sept 29 (Reuters) - Indonesia is not solely dependent on Thailand or Vietnam for rice and is seeking cheaper imports, while state procurement agency Bulog should look to buy from domestic suppliers, the Indonesian agriculture minister said on Thursday.
Indonesian officials are in Bangkok to discuss the reported cancellation of a proposed sale of 300,000 tonnes of rice to Southeast Asia's biggest economy, agreed under the previous Thai administration.
Brent crude oil rises above $104, set for quarterly drop
SINGAPORE, Sept 30 (Reuters) - Brent crude rose above $104 a barrel on positive economic news, but prices this quarter remain on track for their biggest drop in 15 months on concerns that a slowing global economy will undercut fuel demand.
"Crude oil has been holding up quite well compared with the other asset classes such as equities," said Ker Chung Yang, a commodities analyst at Phillip Futures in Singapore, who forecasts U.S. crude will be between $80 and $90 by the end of this year. Prices ended at $91.38 a barrel in 2010.
Iron ore, coal beat paper commodities: Clyde Russell
--Clyde Russell is a Reuters market analyst. The views expressed are his own.--
SINGAPORE, Sept 29 (Reuters) - Want to find a commodity that's relatively unscathed by the recent turmoil? Look no further than iron ore and coal in Asia.
While trade in both is measured in billions of dollars a year, both have benefited from not being widely traded on paper exchanges such as ICE Futures Europe and the New York Mercantile Exchange.
Japan Q4 crude steel demand seen down 1.8 pct y/y
TOKYO, Sept 29 (Reuters) - Japanese demand for crude steel in October-December will be slightly below year-ago levels as a steep decline in steel exports will outweigh strong demand from the auto sector, the trade ministry said on Thursday.
The strong yen, higher exports from South Korea and China and uncertainty over the global economy cloud the outlook for exports after the turn of the year, a ministry official said.
Chile industry stronger in Aug, copper output down
SANTIAGO, Sept 29 (Reuters) - Chile's industrial output rose in August from July and was stronger than expected compared to a year ago, but copper output in the world's top producer of the metal sank on lower ore grades as the industry recovers from disruptions.
Industrial production rose a seasonally adjusted 1.3 percent in August from July, the government said on Thursday, boosted by manufacturing, and was up 1.7 percent from a year earlier.
Chile August copper output down 8.7 pct yr/yr
SANTIAGO, Sept 29 (Reuters) - Chile, which provides around a third of the world's copper, produced 427,420 tonnes of the metal in August, down 8.7 percent from the same month last year, the government said on Thursday.
Chile's July copper output fell 18 percent to 373,498 tonnes compared with the same period last year, the government reported last month, as the industry was hit by a wave of protests by mining workers demanding a bigger share of the copper price bonanza.
Copper eyes 2012 record on taut supply-Trafigura
LONDON, Sept 29 (Reuters) - Copper is set to print new records as soon as the second quarter of 2012 as top consumer China restocks, more than making up for softening demand from struggling economies in the West, a director at commodities heavyweight Trafigura said.
LME copper heads for worst month in three years
SHANGHAI, Sept 30 (Reuters) - London copper fell 2.4 percent heading for its worst month in three years on concerns that a global economic slowdown will hit demand for the metal and as Chinese investors closed out long positions.
"I think LME copper's fall today is quite normal in this volatile climate. Chinese investors are still feeling bearish since it's before a long holiday and the longs are exiting the markets," said Jinrui Futures analyst Zhao Kai.
Gold holds gains; heads for worst month since Oct '08
SINGAPORE, Sept 30 (Reuters) - Gold jumped more than 1 percent after Germany's approval for expanding the euro zone bailout fund offered temporary relief to investors, but the precious metal was heading for its worst monthly decline in three years.
"It seems that there are still hurdles ahead before the European debt crisis is resolved," said Ong Yi Ling, an analyst at Phillip Futures in Singapore.
METALS-LME copper heads for worst month in three years
SHANGHAI, Sept 30 (Reuters) - London copper fell 2.4 percent, heading for its worst month in three years on concerns that a global economic slowdown will hit demand for the metal and as Chinese investors closed out long positions.
"I think LME copper's fall today is quite normal in this volatile climate. Chinese investors are still feeling bearish since it's before a long holiday and the longs are exiting the markets," said Jinrui Futures analyst Zhao Kai.
PRECIOUS-Gold holds gains; heads for worst month since Oct '08
SINGAPORE, Sept 30 (Reuters) - Gold jumped more than 1 percent after Germany's approval for expanding the euro zone bailout fund offered temporary relief to investors, but the precious metal was heading for its worst monthly decline in three years.
"It seems that there are still hurdles ahead before the European debt crisis is resolved," said Ong Yi Ling, an analyst at Phillip Futures in Singapore.
20110930 1118 Global Market & Commodities Related News.
GLOBAL MARKETS-Equities steady after rise, euro holds gains
HONG KONG, Sept 30 (Reuters) - Asian stocks steadied on Friday with big gains unlikely as investors looked to take profits after three days of gains, while the euro held its tiny increase following Germany's approval to expand the euro zone bailout fund. "There is still a lot of uncertainty... Economic growth in Europe and the U.S. is not that good and that will put pressure on the euro and give a bid to the dollar," said Joseph Capurso, strategist at Commonwealth Bank of Australia.
Asian Stocks Fall, Headed for Biggest Quarterly Drop in Almost Three Years (Bloomberg)
Asian stocks dropped for the first time in four days, with the regional benchmark index set for its biggest quarterly decline since December 2008, as U.S. economic reports failed to soothe investors’ concern that growth in the world’s largest economy is faltering. Li & Fung Ltd., a supplier of toys and clothes to Wal-Mart Stores Inc., sank 5.1 percent in Hong Kong. Toyota Motor Corp., the world’s largest carmaker, dropped 0.9 percent in Tokyo. Samsung Electronics Co., South Korea’s No. 1 exporter of consumer electronics, fell 1.9 percent in Seoul. Woodside Petroleum Ltd., Australia’s second-biggest oil and gas producer, added 0.8 percent after crude oil futures gained. “Sentiment ebbs and flows very quickly nowadays,” said Tim Schroeders, who helps manage $1 billion in equities at Pengana Capital Ltd. in Melbourne. “People are still very uncertain about the macro-economic outlook at this stage and risk-off prevails until greater certainty comes to light in policy response.”
COMMODITIES-Prices up on day but headed for quarterly loss
NEW YORK, Sept 29 (Reuters) - Oil and most commodities rose on Thursday after Germany voted to expand the euro zone rescue fund, easing worries over Greece, but prices were broadly poised to end the quarter lower due to September's losses. Copper, the key economic indicator, was headed for its largest quarterly loss since the fourth quarter of 2008 as concerns over Chinese demand and global macroeconomic pressures painted a bearish outlook for the industrial metal.
Oil up on euro hope, U.S. data
NEW YORK, Sept 29 (Reuters) - Oil rose on Thursday, following an initial rebound in broader markets after Germany's lower house approved new powers for the euro zone's crisis fund and U.S. economic data beat expectations. "Oil is being battered back and forth by changing perceptions about how the economy is going to do in the next year or so and there's no clear answer," said Gene McGillian, analyst at Tradition Energy in Stamford, Connecticut.
NYMEX-Natural gas ends down 1 pct on bearish EIA, weather
NEW YORK, Sept 29 (Reuters) - U.S. natural gas futures ended lower on Thursday, with moderate weather forecasts for next week and a government report showing an unexpectedly large weekly build in inventories pressuring the complex. "It was a shocking (bearish EIA build) number," a Massachusetts-based trader said.
Euro Coal-Oct S.African trades at $111.50/T
LONDON, Sept 29 (Reuters) - Prompt physical coal prices were stable again on Thursday despite volatility in equity and other commodity markets but South African Richards Bay prices remain under pressure. "Coal has remained relatively stable during the past week while most other markets have been all over the place," one European trader said.
US crude oil imports down in July-EIA
WASHINGTON, Sept 29 (Reuters) - U.S. crude oil imports continued to decline in July, falling 622,000 barrels per day from a year earlier, the Energy Information Administration said on Thursday. Crude imports averaged 9.310 million bpd in July, down more than 6 percent from the 9.932 million bpd imported during the month in 2010.
Uruguay to import fuels due to refinery shutdown
MONTEVIDEO, Sept 29 (Reuters) - Uruguayan state energy company Ancap will import fuels worth an estimated $600 million while the country's only oil refinery is closed for maintenance until December, an official said on Thursday.
Ancap's La Teja refinery on the outskirts of the capital Montevideo was shut at the start of the month, forcing the company to rely on imports to meet the needs of motorists, farmers and state electricity company UTE.
At $80, oil shale slow-down closer than you think
NEW YORK, Sept 29 (Reuters) - As commodity markets unravel, oil traders looking for signs of a floor in oil prices would do as well to watch producers in North Dakota as closely as they watch officials in Saudi Arabia.
Just as the boom in oil shale production in places like the northern Bakken and Eagle Ford, Texas, has shocked analysts with its speed and breadth, a sharp slowdown in growth if U.S. oil prices tip below $70 a barrel may also come as surprise.
HONG KONG, Sept 30 (Reuters) - Asian stocks steadied on Friday with big gains unlikely as investors looked to take profits after three days of gains, while the euro held its tiny increase following Germany's approval to expand the euro zone bailout fund. "There is still a lot of uncertainty... Economic growth in Europe and the U.S. is not that good and that will put pressure on the euro and give a bid to the dollar," said Joseph Capurso, strategist at Commonwealth Bank of Australia.
Asian Stocks Fall, Headed for Biggest Quarterly Drop in Almost Three Years (Bloomberg)
Asian stocks dropped for the first time in four days, with the regional benchmark index set for its biggest quarterly decline since December 2008, as U.S. economic reports failed to soothe investors’ concern that growth in the world’s largest economy is faltering. Li & Fung Ltd., a supplier of toys and clothes to Wal-Mart Stores Inc., sank 5.1 percent in Hong Kong. Toyota Motor Corp., the world’s largest carmaker, dropped 0.9 percent in Tokyo. Samsung Electronics Co., South Korea’s No. 1 exporter of consumer electronics, fell 1.9 percent in Seoul. Woodside Petroleum Ltd., Australia’s second-biggest oil and gas producer, added 0.8 percent after crude oil futures gained. “Sentiment ebbs and flows very quickly nowadays,” said Tim Schroeders, who helps manage $1 billion in equities at Pengana Capital Ltd. in Melbourne. “People are still very uncertain about the macro-economic outlook at this stage and risk-off prevails until greater certainty comes to light in policy response.”
COMMODITIES-Prices up on day but headed for quarterly loss
NEW YORK, Sept 29 (Reuters) - Oil and most commodities rose on Thursday after Germany voted to expand the euro zone rescue fund, easing worries over Greece, but prices were broadly poised to end the quarter lower due to September's losses. Copper, the key economic indicator, was headed for its largest quarterly loss since the fourth quarter of 2008 as concerns over Chinese demand and global macroeconomic pressures painted a bearish outlook for the industrial metal.
Oil up on euro hope, U.S. data
NEW YORK, Sept 29 (Reuters) - Oil rose on Thursday, following an initial rebound in broader markets after Germany's lower house approved new powers for the euro zone's crisis fund and U.S. economic data beat expectations. "Oil is being battered back and forth by changing perceptions about how the economy is going to do in the next year or so and there's no clear answer," said Gene McGillian, analyst at Tradition Energy in Stamford, Connecticut.
NYMEX-Natural gas ends down 1 pct on bearish EIA, weather
NEW YORK, Sept 29 (Reuters) - U.S. natural gas futures ended lower on Thursday, with moderate weather forecasts for next week and a government report showing an unexpectedly large weekly build in inventories pressuring the complex. "It was a shocking (bearish EIA build) number," a Massachusetts-based trader said.
Euro Coal-Oct S.African trades at $111.50/T
LONDON, Sept 29 (Reuters) - Prompt physical coal prices were stable again on Thursday despite volatility in equity and other commodity markets but South African Richards Bay prices remain under pressure. "Coal has remained relatively stable during the past week while most other markets have been all over the place," one European trader said.
US crude oil imports down in July-EIA
WASHINGTON, Sept 29 (Reuters) - U.S. crude oil imports continued to decline in July, falling 622,000 barrels per day from a year earlier, the Energy Information Administration said on Thursday. Crude imports averaged 9.310 million bpd in July, down more than 6 percent from the 9.932 million bpd imported during the month in 2010.
Uruguay to import fuels due to refinery shutdown
MONTEVIDEO, Sept 29 (Reuters) - Uruguayan state energy company Ancap will import fuels worth an estimated $600 million while the country's only oil refinery is closed for maintenance until December, an official said on Thursday.
Ancap's La Teja refinery on the outskirts of the capital Montevideo was shut at the start of the month, forcing the company to rely on imports to meet the needs of motorists, farmers and state electricity company UTE.
At $80, oil shale slow-down closer than you think
NEW YORK, Sept 29 (Reuters) - As commodity markets unravel, oil traders looking for signs of a floor in oil prices would do as well to watch producers in North Dakota as closely as they watch officials in Saudi Arabia.
Just as the boom in oil shale production in places like the northern Bakken and Eagle Ford, Texas, has shocked analysts with its speed and breadth, a sharp slowdown in growth if U.S. oil prices tip below $70 a barrel may also come as surprise.
20110930 1056 Malaysia Corporate Related News.
PNB defended its conditional takeover offer for SP Setia at RM3.90 per share as "fair and reasonable".
• "We have considered this offer from various angles such as market conditions, the interest of all stakeholders, especially the minority shareholders," said PNB's group chief executive Tan Sri Hamad Kama Piah Che Othman in a statement.
• The statement also highlighted that its PNB's wish to work with the "current management" to deliver value to the shareholders.
• "This is a synergistic collaboration that blends the entrepreneurial spirit of SP Setia and PNB's record as a strong and supportive long-term shareholder, which allows the management to have an undivided focus on maximising shareholders' value," said Hamad. (Financial Daily)
RHB Capital has applied to the central bank to start merger talks with OSK Holdings Berhad. "The company has today submitted an application to Bank Negara Malaysia for approval to commence negotiations with OSK Investment Bank, OSK Holdings and the major shareholders of OSK Holdings in relation to the proposed merger negotiation," RHB said. (BMSB)
Maybank urged authorities to step up monitoring of personal loans, saying that it was becoming a cause for concern. This comes as the nation’s household debt increased from 66.7% in 2004 to 76% in 2009, which is uncomfortably close to US levels prior to the 2008 financial crisis. Malaysians are facing increasing financial pressures as salaries have not kept up with inflation and many turn to personal loans and credit cards to help fund living expenses. The size of the money lending industry is reflected by the extent of advertising of personal loans, many with the interest rate of one per cent a month. “We need stronger enforcement on personal loans,” said Maybank CEO Datuk Seri Abdul Wahid Omar.
• He also suggested that non-bank lenders of personal loans should look at adopting some of the same standards as the banks with regards to underwriting the loans.
• The Maybank chief also expressed concern that there was “over-competition” in Malaysia’s banking sector with banks being aggressive in pricing their loans to attract customers. (Malaysian Insider)
Maybank sees its loan growth at 10% to 12% for the six months ending Dec 31, boosted by the corporate segment. CEO Datuk Seri Abdul Wahid Omar hopes to see loan growth exceeding the forecast industry average of about 11% for 2011 and also achieve ROE of 16% during the six-month period. (Star Biz)
Sime Darby plans to appoint two or three directors to the board of Eastern and Oriental after the latter's AGM that will be held today, sources said. The sources, however, could not confirm the names of the directors. (Starbiz)
The Malaysian Communications and Multimedia Commission (MCMC) released a new Spectrum Plan 2011 that determines how to award spectrum in the future, superceding the earlier 2006 plan. It said spectrum could be awarded in three ways – auction, tender and via fixed pricing and the allocation could be via spectrum assignment, apparatus assignment and class assignment. This new plan would be used in the award of the 2.6GHz and 700MHz spectrum by the commission. The commission is in the final stages of evaluating the award for the 2.6G spectrum where nine parties had submitted their business proposals. It is unclear when the 700Mhz spectrum will be offered to players. (Starbiz)
The government has extended the time it will take to agree to new terms for Padiberas Nasional Bhd’s contract over the monopoly of the country’s rice imports. Bernas said the Public Private Partnership Unit under the Prime Minister’s Department has extended the time for the government and Bernas to come up to an agreement on new terms indefinitely. (BT)
MSM Malaysia has executed the lease agreement between the group and Perbadanan Aset Keretapi (PAK) over the lease of plots of freehold land in Bandar Prai, Seberang Prai Tengah, Penang. The site is approximately 763,553 sq. ft. and has factory buildings, warehouses, railway lines and other structures that are used by MSM in its sugar refinery business operations. (Financial Daily)
The NAZA group of companies hope the government will lower the duty structure for cars by 20-30% in the 2012 Budget to spur businesses to invest more and the people to spend more Joint Group Executive Chairman Datuk Wira SM Faisal SM Nasimuddin said the people are complaining that the duty structure was too high. Reducing the duties will create an interest among the people to buy cars, especially with the current volatility in the market, he said. (Bernama)
Petronas continues to receive an ‘A’ with a stable outlook for its long-term foreign and local currency issuer default ratings (IDRs), but was cautioned by Fitch Ratings that its foreign currency IDR may be downgraded if the government does not demonstrate efforts to reduce the financial requirement on Petronas within the next 24 months. (Malaysian Reserve)
Although there are more investors keen on setting up aluminium smelters in Sarawak, the state will only entertain new proposals once it ensures there is enough power supply. "Not the time because we need the supply from two more hydroelectric dams at Baram and at Pelagus, before I can entertain (these aluminium smelter) investments," Chief Minister Tan Sri Abdul Taib Mahmud said. (BT)
YTL Corp wants to use food as its springboard for a larger slice of China's robust economic cake. "If there is a place to be, it has to be in China as it provides the scale that is huge enough. And in any shopping malls, food courts are important, especially in China," said managing director Tan Sri Francis Yeoh. The company announced that the success and international recognition of YTL's Lot 10 Hutong food court will be replicated in Guangzhou, China, by as early as next year. (BT)
Heveaboard has received creditors’ approval to terminate its restructuring plan. The approval was gained subject to certain conditions being satisfied. According to Heveaboard, all debt had been paid except for three scheme creditors, with which it hopes to come to an arrangement. (BT)
Axis REIT’s recent acquisition of real estate in Seberang Prai will give it a gross yield of 11% and a net yield of 10.2%, according to CEO Stewart LaBrooy. He said while Axis gearing levels would rise to 39% after this deal, they would come down to 26% by year-end when the company’s proposed placement of 75.1m units was completed. He also said that Axis REIT is bullish about Penang now and will be making more investments in the north. (Star Biz)
Atlan Holdings is selling two parcels of land measuring 64ha in Bandar Sri Sendayan, Seremban, for RM52.2m to BSS Development. Proceeds from the sale will be used to repay borrowings and working capital for the company. (BT)
Yinson Holdings is bidding for up to nine oil and gas-related projects worth about RM800m involving vessel-chartering services in Malaysia, Indonesia, Thailand and Vietnam. MD Lim Han Weng said up to 50% of the contracts are in Vietnam and some of them are expected to be announced early next year. "We are confident of winning some of the contracts, especially in Vietnam, as we already have a strong relationship with PetroVietnamTechnical Services Corp (PTSC)," he said. (Bernama)
CIMB unit to buy 70% of Thai broker
CIMB Group Holdings is buying a 70% stake in a stock broking firm in Thailand for RM78.4m. CIMB's indirect subsidiary, CIMB Securities International Pte Ltd, will execute the deal with Siam Industrial Credit Public Co Ltd. SICCO Securities Public Co Ltd (SSEC) is listed on the Stock Exchange of Thailand (SET), and has 13 branches in the country. The acquisition will trigger a mandatory tender offer for the rest of SSEC's shares. It is unclear if CIMB seeks to privatize the stock broking firm. (StarBiz)
AirAsia X IPO delayed by Khazanah decision
AirAsia X’s (AAX) IPO plan is being delayed by Khazanah Nasional prolonged deliberation to take up a 10% stake in the long-haul low-cost carrier. AAX’s CEO Azran Osman-Rani was quoted by Bloomberg as saying the carrier’s plan to list would be put on hold while talks to sell the 10% stake to Khazanah are ongoing. Khazanah said they wanted “more clarity” on AAX’s financials and its business plan.(Financial Daily)
Tenaga says no plans to break up into 3 units
TNB says it has no knowledge of any plan to break up the power company into three units to reform the energy sector. It said this in a statement to Bursa Malaysia on Thursday in response to a news article that it was looking into this proposal. The company said this “was never discussed with TNB and that TNB has no knowledge of this matter”. (Financial Daily)
Alam Maritim gets RM32m contracts to provide vessels
Alam Maritim Resources has secured two contracts to provide vessels with a total value of RM32m. It said on Thursday its unit Alam Maritim (M) SB had received letters of contract extension from Petronas Carigali SB to provide two anchor handling tug supply (AHTS) vessels valued at RM23.32m. Its unit also received a letter of award from Dayang Enterprise SB to provide one workboat valued at RM8.68m. (Financial Daily)
Century Logistics unit gets Pepsi-Cola contract
Century Resources (Thailand) Ltd, a wholly-owned subsidiary of Malaysia’s Century Logistics Holdings has secured a THB76m (RM7.6m) contract from Pepsi-Cola (Thai) Trading Co. Ltd for its warehousing facility. Century Logistics is one of Malaysia’s largest logistics companies listed on Bursa Malaysia. (Malaysian Reserve)
• "We have considered this offer from various angles such as market conditions, the interest of all stakeholders, especially the minority shareholders," said PNB's group chief executive Tan Sri Hamad Kama Piah Che Othman in a statement.
• The statement also highlighted that its PNB's wish to work with the "current management" to deliver value to the shareholders.
• "This is a synergistic collaboration that blends the entrepreneurial spirit of SP Setia and PNB's record as a strong and supportive long-term shareholder, which allows the management to have an undivided focus on maximising shareholders' value," said Hamad. (Financial Daily)
RHB Capital has applied to the central bank to start merger talks with OSK Holdings Berhad. "The company has today submitted an application to Bank Negara Malaysia for approval to commence negotiations with OSK Investment Bank, OSK Holdings and the major shareholders of OSK Holdings in relation to the proposed merger negotiation," RHB said. (BMSB)
Maybank urged authorities to step up monitoring of personal loans, saying that it was becoming a cause for concern. This comes as the nation’s household debt increased from 66.7% in 2004 to 76% in 2009, which is uncomfortably close to US levels prior to the 2008 financial crisis. Malaysians are facing increasing financial pressures as salaries have not kept up with inflation and many turn to personal loans and credit cards to help fund living expenses. The size of the money lending industry is reflected by the extent of advertising of personal loans, many with the interest rate of one per cent a month. “We need stronger enforcement on personal loans,” said Maybank CEO Datuk Seri Abdul Wahid Omar.
• He also suggested that non-bank lenders of personal loans should look at adopting some of the same standards as the banks with regards to underwriting the loans.
• The Maybank chief also expressed concern that there was “over-competition” in Malaysia’s banking sector with banks being aggressive in pricing their loans to attract customers. (Malaysian Insider)
Maybank sees its loan growth at 10% to 12% for the six months ending Dec 31, boosted by the corporate segment. CEO Datuk Seri Abdul Wahid Omar hopes to see loan growth exceeding the forecast industry average of about 11% for 2011 and also achieve ROE of 16% during the six-month period. (Star Biz)
Sime Darby plans to appoint two or three directors to the board of Eastern and Oriental after the latter's AGM that will be held today, sources said. The sources, however, could not confirm the names of the directors. (Starbiz)
The Malaysian Communications and Multimedia Commission (MCMC) released a new Spectrum Plan 2011 that determines how to award spectrum in the future, superceding the earlier 2006 plan. It said spectrum could be awarded in three ways – auction, tender and via fixed pricing and the allocation could be via spectrum assignment, apparatus assignment and class assignment. This new plan would be used in the award of the 2.6GHz and 700MHz spectrum by the commission. The commission is in the final stages of evaluating the award for the 2.6G spectrum where nine parties had submitted their business proposals. It is unclear when the 700Mhz spectrum will be offered to players. (Starbiz)
The government has extended the time it will take to agree to new terms for Padiberas Nasional Bhd’s contract over the monopoly of the country’s rice imports. Bernas said the Public Private Partnership Unit under the Prime Minister’s Department has extended the time for the government and Bernas to come up to an agreement on new terms indefinitely. (BT)
MSM Malaysia has executed the lease agreement between the group and Perbadanan Aset Keretapi (PAK) over the lease of plots of freehold land in Bandar Prai, Seberang Prai Tengah, Penang. The site is approximately 763,553 sq. ft. and has factory buildings, warehouses, railway lines and other structures that are used by MSM in its sugar refinery business operations. (Financial Daily)
The NAZA group of companies hope the government will lower the duty structure for cars by 20-30% in the 2012 Budget to spur businesses to invest more and the people to spend more Joint Group Executive Chairman Datuk Wira SM Faisal SM Nasimuddin said the people are complaining that the duty structure was too high. Reducing the duties will create an interest among the people to buy cars, especially with the current volatility in the market, he said. (Bernama)
Petronas continues to receive an ‘A’ with a stable outlook for its long-term foreign and local currency issuer default ratings (IDRs), but was cautioned by Fitch Ratings that its foreign currency IDR may be downgraded if the government does not demonstrate efforts to reduce the financial requirement on Petronas within the next 24 months. (Malaysian Reserve)
Although there are more investors keen on setting up aluminium smelters in Sarawak, the state will only entertain new proposals once it ensures there is enough power supply. "Not the time because we need the supply from two more hydroelectric dams at Baram and at Pelagus, before I can entertain (these aluminium smelter) investments," Chief Minister Tan Sri Abdul Taib Mahmud said. (BT)
YTL Corp wants to use food as its springboard for a larger slice of China's robust economic cake. "If there is a place to be, it has to be in China as it provides the scale that is huge enough. And in any shopping malls, food courts are important, especially in China," said managing director Tan Sri Francis Yeoh. The company announced that the success and international recognition of YTL's Lot 10 Hutong food court will be replicated in Guangzhou, China, by as early as next year. (BT)
Heveaboard has received creditors’ approval to terminate its restructuring plan. The approval was gained subject to certain conditions being satisfied. According to Heveaboard, all debt had been paid except for three scheme creditors, with which it hopes to come to an arrangement. (BT)
Axis REIT’s recent acquisition of real estate in Seberang Prai will give it a gross yield of 11% and a net yield of 10.2%, according to CEO Stewart LaBrooy. He said while Axis gearing levels would rise to 39% after this deal, they would come down to 26% by year-end when the company’s proposed placement of 75.1m units was completed. He also said that Axis REIT is bullish about Penang now and will be making more investments in the north. (Star Biz)
Atlan Holdings is selling two parcels of land measuring 64ha in Bandar Sri Sendayan, Seremban, for RM52.2m to BSS Development. Proceeds from the sale will be used to repay borrowings and working capital for the company. (BT)
Yinson Holdings is bidding for up to nine oil and gas-related projects worth about RM800m involving vessel-chartering services in Malaysia, Indonesia, Thailand and Vietnam. MD Lim Han Weng said up to 50% of the contracts are in Vietnam and some of them are expected to be announced early next year. "We are confident of winning some of the contracts, especially in Vietnam, as we already have a strong relationship with PetroVietnamTechnical Services Corp (PTSC)," he said. (Bernama)
CIMB unit to buy 70% of Thai broker
CIMB Group Holdings is buying a 70% stake in a stock broking firm in Thailand for RM78.4m. CIMB's indirect subsidiary, CIMB Securities International Pte Ltd, will execute the deal with Siam Industrial Credit Public Co Ltd. SICCO Securities Public Co Ltd (SSEC) is listed on the Stock Exchange of Thailand (SET), and has 13 branches in the country. The acquisition will trigger a mandatory tender offer for the rest of SSEC's shares. It is unclear if CIMB seeks to privatize the stock broking firm. (StarBiz)
AirAsia X IPO delayed by Khazanah decision
AirAsia X’s (AAX) IPO plan is being delayed by Khazanah Nasional prolonged deliberation to take up a 10% stake in the long-haul low-cost carrier. AAX’s CEO Azran Osman-Rani was quoted by Bloomberg as saying the carrier’s plan to list would be put on hold while talks to sell the 10% stake to Khazanah are ongoing. Khazanah said they wanted “more clarity” on AAX’s financials and its business plan.(Financial Daily)
Tenaga says no plans to break up into 3 units
TNB says it has no knowledge of any plan to break up the power company into three units to reform the energy sector. It said this in a statement to Bursa Malaysia on Thursday in response to a news article that it was looking into this proposal. The company said this “was never discussed with TNB and that TNB has no knowledge of this matter”. (Financial Daily)
Alam Maritim gets RM32m contracts to provide vessels
Alam Maritim Resources has secured two contracts to provide vessels with a total value of RM32m. It said on Thursday its unit Alam Maritim (M) SB had received letters of contract extension from Petronas Carigali SB to provide two anchor handling tug supply (AHTS) vessels valued at RM23.32m. Its unit also received a letter of award from Dayang Enterprise SB to provide one workboat valued at RM8.68m. (Financial Daily)
Century Logistics unit gets Pepsi-Cola contract
Century Resources (Thailand) Ltd, a wholly-owned subsidiary of Malaysia’s Century Logistics Holdings has secured a THB76m (RM7.6m) contract from Pepsi-Cola (Thai) Trading Co. Ltd for its warehousing facility. Century Logistics is one of Malaysia’s largest logistics companies listed on Bursa Malaysia. (Malaysian Reserve)
20110930 1045 Local & Global Economic Related News.
Malaysian Retailer-Chains Association (MRCA) remains optimistic on the performance of the retail sector despite a 3% sales decline in 2Q11 (+5.5% in 1Q11). Hypermarkets and convenience stores did well in 2Q11 because they sell essential items, while the food and beverages (F&B) business suffered declines due to high raw food cost, utility charges and competition from new shopping malls in 2Q11. MRCA secretary-general Valerie Choo said MRCA hopes for growth in 4Q11 as she expects consumers will spend more during the year-end season with promotions such as the megasale. It projected the retail sales to grow by 4-5% this year. (Bloomberg)
Banks will tackle rising credit card debt with a new payment allocation method involving a “rejig” of interest rates imposed. Under new Bank Negara guidelines to be implemented from tomorrow (1 Oct), banks will tabulate credit card balances by focusing on expenses hit with the highest interest rate.
• This means payment received from cardholders for the Sep statement will first be used to offset items levied the highest interest, thus resulting in considerable savings in terms of the interest payable.
• Cash advance withdrawals are usually imposed the maximum 18% rate.
• Interest rate ranging from 13.5% to 17.5%, depending on the cardholder’s payment record, are applied on retail purchases.
• The new method was part of the revised credit card guidelines issued by the central bank on 18 Mar this year. (The Star)
US: Comfort drops to second-weakest on record
Consumer confidence slumped last week to the second-lowest level on record as Americans grew more concerned with their financial situation and the buying climate worsened. The Bloomberg Consumer Comfort Index dropped to minus 53 in the period ended 25 Sept from minus 52.1 the prior week. Another report showed the economy grew at a faster pace in the second quarter than previously estimated. The comfort gauge showed the share of households saying it was a bad time to buy needed goods and services climbed to the highest level in three years, raising the risk that the biggest part of the economy will slow heading into the holiday shopping season. A lack of jobs and growing concern that policy makers will be unable to spur the recovery may keep sentiment depressed. (Bloomberg)
US: Jobless claims in drop on seasonal adjustment issues
Claims for U.S. unemployment benefits fell more than forecast last week as an atypical calendar alignment made it more difficult for the government to adjust the data for seasonal changes. Applications for jobless benefits dropped by 37,000 in the week ended 24 Sept to 391,000, the fewest since April, Labor Department figures showed. The pace of firings has remained little changed this year while companies are reluctant to hire at a time when the economy is slowing and concerns of a European default rise. Federal Reserve policy makers last week announced more unconventional measures to boost jobs and the economy. (Bloomberg)
US stocks advance as jobless claims offset technology retreat
US stocks rose, rebounding from a 1% decline in the S&P’s 500 Index, as lower-than-estimated claims for unemployment benefits and a vote by German lawmakers to expand a European bailout fund helped offset losses by consumer and technology shares. The S&P 500 added 0.8% to 1,160.40 at 4 pm New York time after rallying as much as 2.2%. The Dow Jones Industrial Average added 143.08 points, or 1.3%, to 11,153.98. (Bloomberg)
The U.S. economy grew at a 1.3% pace in 2Q (+0.4% in 1Q), faster than estimated last month and helped by exports and spending on services. The revised rise in gross domestic product compares with a 1% gain previously calculated, Commerce Department figures showed. (Bloomberg)
U.S. pending home sales, or contract signings for existing homes, fell 1.2% in Aug after dropping 1.3% in the previous month, the National Association of Realtors reported. Economists called for a 2% decrease. (Bloomberg)
Asia: Taiwan ends rate rises as Asian economies seek to protect growth
Taiwan’s central bank refrained from raising interest rates, ending five straight quarters of increases as Asia’s policy makers seek to protect their economies from a faltering global recovery. The central bank left the discount rate on 10-day loans to banks at 1.875%, it said yesterday. Central banks from New Zealand to South Korea refrained from raising benchmark rates this month as Europe’s debt crisis and a struggling U.S. economy dimmed the outlook for the region’s exporters. A decline in Taipei home prices from a record earlier this year and slowing export-order growth have eased inflation pressures, weakening the case for further monetary tightening. (Bloomberg)
The eurozone’s economic sentiment indicator (ESI) fell by 3.4pts to 95.0 in Sep, the European Commission said. According to the surveys, confidence in all the sectors fell in Sep, with the biggest losses seen in service sectors (-3.7) and in industry (-3.2). Economists expected an ESI reading of 96.2 in Sep. (Xinhua, Bloomberg)
The European Commission's measure of consumer confidence fell to -19.1 in Sep (- 16.5 in Aug) and residents of euro-zone nations became more pessimistic about the outlook for the economy and more fearful of losing their jobs. (WSJ)
The European Commission's measure of industrial confidence fell to -5.9 in Sep (-2.7 in Aug), a weaker outcome than the forecast reading of -4.0. (WSJ, Bloomberg)
Euro: Germany backs Euro rescue fund to set stage for next steps
German lawmakers approved an expansion of the euro-area rescue fund’s firepower, freeing the way for European officials to focus on what next steps may be needed to stem the debt crisis. The lower house of parliament passed the measure with 523 votes in favor and 85 against, granting the fund powers to buy bonds in secondary markets, enable bank recapitalizations and offer precautionary credit lines. It raises Germany’s guarantees to EUR211bn (USD287bn) from 1EUR23bn. The main opposition Social Democrats and Greens said before yesterday’s session in Berlin that they’d vote with Chancellor Angela Merkel’s government, assuring passage. (Bloomberg)
Japan’s retail sales slumped for a second month in Aug as demand for appliances and autos fell, a sign that consumers’ concern about looming tax increases may be weighing on spending. Sales slid 1.7% mom in Aug, the trade ministry said in Tokyo today, the steepest decline since Mar. Economists called for a 0.2% increase. On a yoy basis, sales decreased 2.6%. (Bloomberg)
International investors expect the world economy to relapse into a recession, with more than one in three forecasting a global economic meltdown within the next year, according to a Bloomberg poll. About two-thirds of those surveyed say the international economy is deteriorating, up from just 18% who felt that way in the last poll, in May. (Bloomberg)
Global investors anticipate Europe’s debt crisis leading to an economic slump, a financial meltdown and social unrest in the next year with 72% predicting a country abandoning the euro as a shared currency within five years, a Bloomberg survey found. (Bloomberg)
U.S. mortgage rates fell to the lowest level in Freddie Mac records after the Federal Reserve announced a plan to reduce borrowing costs even further. The average rate for a 30-year fixed loan dropped to 4.01% in the week ended 29 Sep from 4.09%, Freddie Mac said. That’s the lowest in the company’s records dating back to 1971. (Bloomberg)
Indonesia's 2011 budget deficit will likely be less than 2% of GDP (2.1% previously) due to low government spending, said the Finance Ministry. Last year, the budget deficit was 0.62% (versus a projection of 2.1%). (Reuters)
Bank Indonesia (BI) lowered its 2011 forecast for foreign fund inflows, with portfolio inflows falling below US$10bn (vs US$12bn-US$13bn previously, and US$13.26bn in 2010). Foreign investment is expected to reach US$16bn this year, with the overall balance of payment still in a big surplus, leaving a possibility for the forex reserves to increase this year. (Jakarta Post)
Vietnam’s central bank said it will cap interest rates on dong deposits that are non-term and those less than a month at 6% to address “liquidity risks” amid concerns about the health of the nation’s banking system. It will maintain the existing 14% rate cap on deposits of one month or longer. (Bloomberg)
59% of respondents said China’s GDP, which rose 9.5% yoy last quarter, will gain less than 5% annually by 2016. 12% see such a slowdown within a year, and 47% said it will occur in 2 to 5 years, a quarterly Bloomberg poll showed. (Bloomberg)
Thailand’s energy policy committee plans to seek THB10bn in loans to finance domestic fuel subsidies, Energy Minister Pichai Naripthaphan said today. (Bloomberg)
Electricity tariffs in Singapore will decrease by an average of 1.2% from Oct to the end of the year, the first drop in 12 months, due to lower fuel oil prices. Tariffs for households will drop 1.1% or 0.3 cents per kilowatt-hour. (Channel News Asia)
Singapore is bracing for a shutdown of its largest refinery after a fire at Royal Dutch Shell's Bukom plant on Wednesday raised the prospect of disruptions to the region's oil flows.
• The refinery processes 0.5m barrels of crude oil per day and is Shell's largest.
• Fire comes at a time when refiners across Asia are running close to capacity
• Singapore's key position in global oil markets means any disruption could exaggerate the impact on regional prices in relation to the capacity taken offline. (Straits Times)
India’s wholesale price index for food articles rose 0.8% mom and 9.13% yoy from 8.84% in the previous week. (Wall Street Journal)
The Indian government raised its borrowing target for the current fiscal year by INR528 bn (US$10.8bn), surprising the market and fueling worries that it may overshoot the new estimate because of muted revenue growth amid a slowing economy and swelling subsidies. (Wall Street Journal)
India: Food inflation quickens, maintaining pressure on rates
India’s food inflation accelerated for the first time in four weeks, maintaining pressure on the central bank to raise borrowing costs to tame price gains. An index measuring wholesale prices of agricultural products gained 9.13% in the week ended 17 Sept from a year earlier, the commerce ministry said in a statement yesterday. It rose 8.84% the previous week. The rate of inflation in the world’s second-most populous nation remains above the level the central bank deems acceptable and has been “fairly stubborn,” Governor Duvvuri Subbarao said this week as he weighs the risks to expansion posed by a faltering global recovery against price pressures. (Bloomberg)
Banks will tackle rising credit card debt with a new payment allocation method involving a “rejig” of interest rates imposed. Under new Bank Negara guidelines to be implemented from tomorrow (1 Oct), banks will tabulate credit card balances by focusing on expenses hit with the highest interest rate.
• This means payment received from cardholders for the Sep statement will first be used to offset items levied the highest interest, thus resulting in considerable savings in terms of the interest payable.
• Cash advance withdrawals are usually imposed the maximum 18% rate.
• Interest rate ranging from 13.5% to 17.5%, depending on the cardholder’s payment record, are applied on retail purchases.
• The new method was part of the revised credit card guidelines issued by the central bank on 18 Mar this year. (The Star)
US: Comfort drops to second-weakest on record
Consumer confidence slumped last week to the second-lowest level on record as Americans grew more concerned with their financial situation and the buying climate worsened. The Bloomberg Consumer Comfort Index dropped to minus 53 in the period ended 25 Sept from minus 52.1 the prior week. Another report showed the economy grew at a faster pace in the second quarter than previously estimated. The comfort gauge showed the share of households saying it was a bad time to buy needed goods and services climbed to the highest level in three years, raising the risk that the biggest part of the economy will slow heading into the holiday shopping season. A lack of jobs and growing concern that policy makers will be unable to spur the recovery may keep sentiment depressed. (Bloomberg)
US: Jobless claims in drop on seasonal adjustment issues
Claims for U.S. unemployment benefits fell more than forecast last week as an atypical calendar alignment made it more difficult for the government to adjust the data for seasonal changes. Applications for jobless benefits dropped by 37,000 in the week ended 24 Sept to 391,000, the fewest since April, Labor Department figures showed. The pace of firings has remained little changed this year while companies are reluctant to hire at a time when the economy is slowing and concerns of a European default rise. Federal Reserve policy makers last week announced more unconventional measures to boost jobs and the economy. (Bloomberg)
US stocks advance as jobless claims offset technology retreat
US stocks rose, rebounding from a 1% decline in the S&P’s 500 Index, as lower-than-estimated claims for unemployment benefits and a vote by German lawmakers to expand a European bailout fund helped offset losses by consumer and technology shares. The S&P 500 added 0.8% to 1,160.40 at 4 pm New York time after rallying as much as 2.2%. The Dow Jones Industrial Average added 143.08 points, or 1.3%, to 11,153.98. (Bloomberg)
The U.S. economy grew at a 1.3% pace in 2Q (+0.4% in 1Q), faster than estimated last month and helped by exports and spending on services. The revised rise in gross domestic product compares with a 1% gain previously calculated, Commerce Department figures showed. (Bloomberg)
U.S. pending home sales, or contract signings for existing homes, fell 1.2% in Aug after dropping 1.3% in the previous month, the National Association of Realtors reported. Economists called for a 2% decrease. (Bloomberg)
Asia: Taiwan ends rate rises as Asian economies seek to protect growth
Taiwan’s central bank refrained from raising interest rates, ending five straight quarters of increases as Asia’s policy makers seek to protect their economies from a faltering global recovery. The central bank left the discount rate on 10-day loans to banks at 1.875%, it said yesterday. Central banks from New Zealand to South Korea refrained from raising benchmark rates this month as Europe’s debt crisis and a struggling U.S. economy dimmed the outlook for the region’s exporters. A decline in Taipei home prices from a record earlier this year and slowing export-order growth have eased inflation pressures, weakening the case for further monetary tightening. (Bloomberg)
The eurozone’s economic sentiment indicator (ESI) fell by 3.4pts to 95.0 in Sep, the European Commission said. According to the surveys, confidence in all the sectors fell in Sep, with the biggest losses seen in service sectors (-3.7) and in industry (-3.2). Economists expected an ESI reading of 96.2 in Sep. (Xinhua, Bloomberg)
The European Commission's measure of consumer confidence fell to -19.1 in Sep (- 16.5 in Aug) and residents of euro-zone nations became more pessimistic about the outlook for the economy and more fearful of losing their jobs. (WSJ)
The European Commission's measure of industrial confidence fell to -5.9 in Sep (-2.7 in Aug), a weaker outcome than the forecast reading of -4.0. (WSJ, Bloomberg)
Euro: Germany backs Euro rescue fund to set stage for next steps
German lawmakers approved an expansion of the euro-area rescue fund’s firepower, freeing the way for European officials to focus on what next steps may be needed to stem the debt crisis. The lower house of parliament passed the measure with 523 votes in favor and 85 against, granting the fund powers to buy bonds in secondary markets, enable bank recapitalizations and offer precautionary credit lines. It raises Germany’s guarantees to EUR211bn (USD287bn) from 1EUR23bn. The main opposition Social Democrats and Greens said before yesterday’s session in Berlin that they’d vote with Chancellor Angela Merkel’s government, assuring passage. (Bloomberg)
Japan’s retail sales slumped for a second month in Aug as demand for appliances and autos fell, a sign that consumers’ concern about looming tax increases may be weighing on spending. Sales slid 1.7% mom in Aug, the trade ministry said in Tokyo today, the steepest decline since Mar. Economists called for a 0.2% increase. On a yoy basis, sales decreased 2.6%. (Bloomberg)
International investors expect the world economy to relapse into a recession, with more than one in three forecasting a global economic meltdown within the next year, according to a Bloomberg poll. About two-thirds of those surveyed say the international economy is deteriorating, up from just 18% who felt that way in the last poll, in May. (Bloomberg)
Global investors anticipate Europe’s debt crisis leading to an economic slump, a financial meltdown and social unrest in the next year with 72% predicting a country abandoning the euro as a shared currency within five years, a Bloomberg survey found. (Bloomberg)
U.S. mortgage rates fell to the lowest level in Freddie Mac records after the Federal Reserve announced a plan to reduce borrowing costs even further. The average rate for a 30-year fixed loan dropped to 4.01% in the week ended 29 Sep from 4.09%, Freddie Mac said. That’s the lowest in the company’s records dating back to 1971. (Bloomberg)
Indonesia's 2011 budget deficit will likely be less than 2% of GDP (2.1% previously) due to low government spending, said the Finance Ministry. Last year, the budget deficit was 0.62% (versus a projection of 2.1%). (Reuters)
Bank Indonesia (BI) lowered its 2011 forecast for foreign fund inflows, with portfolio inflows falling below US$10bn (vs US$12bn-US$13bn previously, and US$13.26bn in 2010). Foreign investment is expected to reach US$16bn this year, with the overall balance of payment still in a big surplus, leaving a possibility for the forex reserves to increase this year. (Jakarta Post)
Vietnam’s central bank said it will cap interest rates on dong deposits that are non-term and those less than a month at 6% to address “liquidity risks” amid concerns about the health of the nation’s banking system. It will maintain the existing 14% rate cap on deposits of one month or longer. (Bloomberg)
59% of respondents said China’s GDP, which rose 9.5% yoy last quarter, will gain less than 5% annually by 2016. 12% see such a slowdown within a year, and 47% said it will occur in 2 to 5 years, a quarterly Bloomberg poll showed. (Bloomberg)
Thailand’s energy policy committee plans to seek THB10bn in loans to finance domestic fuel subsidies, Energy Minister Pichai Naripthaphan said today. (Bloomberg)
Electricity tariffs in Singapore will decrease by an average of 1.2% from Oct to the end of the year, the first drop in 12 months, due to lower fuel oil prices. Tariffs for households will drop 1.1% or 0.3 cents per kilowatt-hour. (Channel News Asia)
Singapore is bracing for a shutdown of its largest refinery after a fire at Royal Dutch Shell's Bukom plant on Wednesday raised the prospect of disruptions to the region's oil flows.
• The refinery processes 0.5m barrels of crude oil per day and is Shell's largest.
• Fire comes at a time when refiners across Asia are running close to capacity
• Singapore's key position in global oil markets means any disruption could exaggerate the impact on regional prices in relation to the capacity taken offline. (Straits Times)
India’s wholesale price index for food articles rose 0.8% mom and 9.13% yoy from 8.84% in the previous week. (Wall Street Journal)
The Indian government raised its borrowing target for the current fiscal year by INR528 bn (US$10.8bn), surprising the market and fueling worries that it may overshoot the new estimate because of muted revenue growth amid a slowing economy and swelling subsidies. (Wall Street Journal)
India: Food inflation quickens, maintaining pressure on rates
India’s food inflation accelerated for the first time in four weeks, maintaining pressure on the central bank to raise borrowing costs to tame price gains. An index measuring wholesale prices of agricultural products gained 9.13% in the week ended 17 Sept from a year earlier, the commerce ministry said in a statement yesterday. It rose 8.84% the previous week. The rate of inflation in the world’s second-most populous nation remains above the level the central bank deems acceptable and has been “fairly stubborn,” Governor Duvvuri Subbarao said this week as he weighs the risks to expansion posed by a faltering global recovery against price pressures. (Bloomberg)
20110930 1022 Global Market Related News.
Asian Stocks Swing Between Gains and Losses on Concerns Over U.S. Economy (Source: Bloomberg)
Asian stocks swung between gains and losses as the latest U.S. economic reports failed to soothe investors’ concern that growth in the world’s largest economic is faltering. James Hardie Industries SE (JHX), the building materials supplier that counts the U.S. as its biggest market, fell 0.7 percent in Sydney as sales of previously owned American homes dropped. Promise Co. climbed 2.6 percent in Tokyo after the Nikkei newspaper reported that Sumitomo Mitsui Financial Group Inc. plans to make the consumer lending company a wholly-owned unit. Inpex Corp., Japan’s largest energy explorer, rose 1.5 percent as crude oil prices increased. “Concerns about the U.S. economic slowdown are lingering,” said Juichi Wako, a senior strategist at Tokyo- based Nomura Holdings Inc. “We need to see more U.S. reports.”
U.S. Consumer Confidence Slumps on Concern Financial Conditions Worsening (Source: Bloomberg)
Consumer confidence slumped last week to the second-lowest level on record as Americans grew more concerned with their financial situation and the buying climate worsened. The Bloomberg Consumer Comfort Index dropped to minus 53 in the period ended Sept. 25 from minus 52.1 the prior week. Another report showed the economy grew at a faster pace in the second quarter than previously estimated. The comfort gauge showed the share of households saying it was a bad time to buy needed goods and services climbed to the highest level in three years, raising the risk that the biggest part of the economy will slow heading into the holiday shopping season. A lack of jobs and growing concern that policy makers will be unable to spur the recovery may keep sentiment depressed.
U.S. Economy Grew at a Revised 1.3% Pace Last Quarter, More Than Estimated (Source: Bloomberg)
The U.S. economy grew at a 1.3 percent pace in the second quarter, faster than estimated last month and helped by exports and spending on services. The revised rise in gross domestic product compares with a 1 percent gain previously calculated, Commerce Department figures showed today in Washington. The median forecast of economists surveyed by Bloomberg News was 1.2 percent, following a 0.4 percent increase in the first three months of the year. Slower global markets may limit growth in exports and business spending, which has bolstered U.S. manufacturing, a pillar of the expansion. The lack of hiring and depressed consumer confidence add to concerns the economy is facing “significant” risks, helping explain why Federal Reserve policy makers took another step this month to revive the recovery.
Pending U.S. Home Sales Decline 1.2% as Lower Prices Fail to Stoke Demand (Source: Bloomberg)
The number of contracts to purchase previously owned U.S. homes fell in August, a sign that lower prices and borrowing costs are doing little to stoke demand. The 1.2 percent decrease in the index of pending home sales followed a 1.3 percent drop the previous month, the National Association of Realtors said today in Washington. Economists forecast a 2 percent drop, according to the median of 43 estimates in a Bloomberg News survey. Unemployment at 9.1 percent and the acceleration of foreclosure processing indicate it may take years to clear the oversupply of houses, an obstacle for stabilizing the market. The prospect of contract cancellations due to stricter underwriting standards and low appraisals means some signings may not translate into closings.
Plosser Says Easing Moves May Hurt Fed’s Credibility, Fail to Boost Growth (Source: Bloomberg)
Federal Reserve Bank of Philadelphia President Charles Plosser said the central bank may be undermining its own credibility by pushing forward with monetary easing that will do little to boost growth. “The actions taken in August and September tend to undermine the Fed’s credibility by giving the impression that we think such policies can have a major impact on the speed of the recovery,” Plosser said today in a speech in Radnor, Pennsylvania. “It is my assessment that they will not.” Plosser’s remarks are his first since he joined Fed district bank presidents Richard Fisher of Dallas and Narayana Kocherlakota of Minneapolis in dissenting from a Fed decision for a second straight month. The regional Fed bank presidents pose the most opposition within the Federal Open Market Committee in almost 19 years, opposing last week a plan to sell $400 billion of short-term Treasury securities and buy $400 billion of longer-term securities.
BofA Plans $5 Monthly Fee for Some Debit-Cards (Source: Bloomberg)
Bank of America Corp. (BAC), the biggest U.S. lender by assets, plans to announce a $5 monthly charge for some debit-card users to recoup revenue lost after new federal rules capped so-called swipe fees. Customers with lower-tiered accounts, including the firm’s online-banking option, may start getting assessed the fee for debit-card purchases in January, said Anne Pace, a Bank of America spokeswoman. Users won’t be charged for cash-machine withdrawals, and clients with premium accounts including those linked to the Merrill Lynch brokerage aren’t affected, she said. Bank of America, based in Charlotte, North Carolina, is joining rivals including JPMorgan Chase & Co. (JPM), Wells Fargo & Co. (WFC) and SunTrust Banks Inc. (STI) in rolling out new charges for debit- card users. The Federal Reserve’s rules limiting swipe fees, or interchange, take effect next month. Banking industry representatives have said the changes enrich merchants while penalizing lower-income consumers.
Initial Jobless Claims in U.S. Decline on Seasonal Adjustment Difficulties (Source: Bloomberg)
Claims for U.S. unemployment benefits fell more than forecast last week as an atypical calendar alignment made it more difficult for the government to adjust the data for seasonal changes. Applications for jobless benefits dropped by 37,000 in the week ended Sept. 24 to 391,000, the fewest since April, Labor Department figures showed today. Economists forecast 420,000 claims, according to the median estimate in a Bloomberg News survey. An agency official said the data probably reflected a “slight mistiming” in the seasonal factors used to modify the figures. The pace of firings has remained little changed this year while companies are reluctant to hire at a time when the economy is slowing and concerns of a European default rise. Federal Reserve policy makers last week announced more unconventional measures to boost jobs and the economy.
U.S. Stocks Advance After Jobless Claims Offset Slump by Technology Shares (Source: Bloomberg)
U.S. stocks rose, rebounding from a 1 percent decline in the Standard & Poor’s 500 Index, as lower- than-estimated claims for unemployment benefits and helped offset losses by consumer and technology shares. Bank of America Corp. (BAC) and JPMorgan Chase & Co. (JPM) climbed at least 3 percent as European lenders soared after German lawmakers backed an enhanced euro-region rescue fund. General Electric Co. (GE) gained 2.7 percent, while Hewlett-Packard Co. (HPQ) added 2.5 percent as jobless claims fell more than forecast and the U.S. economy’s second-quarter expansion topped projections. Advanced Micro Devices Inc. (AMD) slid 14 percent after the chipmaker cut its forecast. The S&P 500 added 0.8 percent to 1,160.40 at 4 p.m. New York time after rallying as much as 2.2 percent. The Dow Jones Industrial Average added 143.08 points, or 1.3 percent, to 11,153.98. The Nasdaq Composite Index fell 0.4 percent as Apple Inc. (AAPL) declined 1.6 percent, dropping for a fourth straight day.
Treasury Yields Set for Biggest Weekly Gain in Three Months on Policy Bets (Source: Bloomberg)
Treasury yields were set for the biggest weekly increase in three months on speculation policy makers will introduce more steps to stimulate growth, easing concern that advanced economies may slip back into recession. Ten-year Treasuries maintained five-days of losses before the European Central Bank’s policy meeting next week amid concern the euro region’s prolonged debt crisis will hurt the world economy. U.S. government debt failed to compensate investors for inflation, with 10-year yields lower than the rate of consumer price increases. “Yields have risen as there are expectations among investors that governments will come up with various economic measures,” said Hiromasa Nakamura, a senior investor in Tokyo at Mizuho Asset Management Co., which oversees the equivalent of $39 billion. “Speculation that the ECB will cut rates stokes expectations for recovery.”
China Growth Seen Less Than 5% by 2016: Poll (Source: Bloomberg)
Most global investors predict Chinese growth will slow to less than half the pace sustained since the government began dismantling Mao Zedong’s communist economy three decades ago, a Bloomberg poll indicated. Fifty-nine percent of respondents said China’s gross domestic product, which rose 9.5 percent last quarter, will gain less than 5 percent annually by 2016. Twelve percent see such a slowdown within a year, and 47 percent said it will occur in two to five years, the quarterly Bloomberg Global Poll of investors, analysts and traders who are Bloomberg subscribers showed. China, which saw its exports tumble the most since at least 1979 amid the 2008-09 global crisis, may not be able to rely on trade in any prolonged demand slump in Europe and the U.S., now battling to avoid returning to a recession. Managing the economic downshift would fall to the Communist Party’s next leaders, as President Hu Jintao and Premier Wen Jiabao begin their transition from power late next year.
Japan’s Industrial Output Rises Less Than Expected, Weighed by Strong Yen (Source: Bloomberg)
Japan’s industrial production rose less than expected in August, signaling that a strong yen and slowing growth abroad are dragging on the nation’s recovery from the March 11 earthquake and tsunami. Factory output increased 0.8 percent in August from July, the trade ministry said in Tokyo today. The median estimate of 28 economists surveyed by Bloomberg News was for a 1.5 percent gain. Today’s report, coming a day after data showed retail sales fell for a second month in August, adds to evidence that the expansion in the world’s third-largest economy is weakening. The International Monetary Fund cut its global growth forecast for this year and next, increasing challenges for Japanese exporters, whose profits are already being eroded by a currency near postwar highs against the dollar.
Japanese Stocks Swing Between Gains, Losses Amid U.S. Growth Concern (Source: Bloomberg)
Japanese stocks swung between gains and losses, with the Nikkei 225 (NKY) Stock Average struggling to extend a three-day winning streak, after U.S. economic reports failed to assuage concern the world’s largest economy is slowing. The Nikkei 225 advanced 0.4 percent to 8,735.72 as of 9:31 a.m. in Tokyo after dropping as much 0.3 percent. The broader Topix index gained 0.3 percent to 764.49 after declining 0.4 percent. “Concerns about the U.S. economic slowdown are lingering, and we need to see more U.S. reports,” said Juichi Wako, a senior strategist at Tokyo-based Nomura Holdings Inc.
South Korea’s Industrial Output Expands Faster as Weakening Won Supports (Source: Bloomberg)
South Korea’s industrial production expanded at a faster pace in August as a weakening won helped exporters weather the global economic slowdown. Output rose 4.8 percent from a year earlier after gaining a revised 4 percent in July, Statistics Korea said today. The median estimate of 14 economists in a Bloomberg News survey was for a 6.1 percent gain. Production slid 1.9 percent from July, when it decreased a revised 0.3 percent. South Korea’s currency weakened more than 9 percent against the dollar this month as a deepening European debt crisis and signs of a U.S. slowdown increased concern about the global outlook. The won’s decline may prove inadequate to support exports as a slowing global economy lessens demand for the nation’s products, said economist Kong Dong Rak.
Korean Won Set for Biggest Monthly Loss Since February 2009; Bonds Fall (Source: Bloomberg)
South Korea’s won headed for biggest monthly loss since February 2009 as signs the global recovery is losing steam and Europe’s debt crisis prompted investors to favor the relative safety of the dollar. Bonds fell. The currency weakened today and stocks declined after a government report showed industrial production fell more than economists forecast in August. Overseas investors sold $1.5 billion more Korean stocks than they bought this month through yesterday, based on exchange figures. Data tomorrow is expected to show exports rose in September at the slowest pace in three months, according to a Bloomberg survey of economists. The won tumbled 9.5 percent this month to 1,178.65 per dollar as of 9:55 a.m. in Seoul, according to data compiled by Bloomberg. The currency fell 0.4 percent today, poised for a 9.4 percent drop this quarter, as Greece struggles to meet the terms of a bailout.
Europe Prepares Next Crisis Steps After Merkel Rescue-Fund Parliament Win (Source: Bloomberg)
European leaders are turning their focus to the next steps to stem the region’s debt crisis after German lawmakers approved an expansion of the euro-area rescue fund’s firepower. With the European Commission now expecting the overhauled 440 billion-euro ($599 billion) European Financial Stability Facility in place by mid-October, euro finance chiefs will next week discuss accelerating enactment of a permanent rescue fund that provides more capital and a tool for managing defaults. “I’m not convinced that this bailout package is going to be remotely enough for the euro zone itself,” Wilbur Ross, the billionaire chairman of private-equity firm WL Ross & Co., said yesterday in an interview on Bloomberg Television’s “In the Loop” with Betty Liu. “I think it should start with a ‘T,’ not a ‘B,’” he said, referring to trillions instead of billions.
Europe Financial Meltdown Converging With Slump Seen by Investors in Poll (Source: Bloomberg)
Global investors anticipate Europe’s debt crisis leading to an economic slump, a financial meltdown and social unrest in the next year with 72 percent predicting a country abandoning the euro as a shared currency within five years, a Bloomberg survey found. About three-quarters of those questioned this week said the euro-area economy will fall into recession during the next 12 months and 53 percent said turmoil will worsen in a banking sector laden with government bonds, according to the quarterly Global Poll of 1,031 investors, analysts and traders who are Bloomberg subscribers. Forty percent see the 17-nation currency bloc losing at least one member in the next year.
More than a third of participants say deteriorating European debt will derail the world economy over the next year, with the pessimism highlighting the pressure European policy makers face as they try again to fix their 18-month sovereign crisis. Stocks last week tumbled into their first bear market in two years and foreign leaders, including President Barack Obama, are urging European leaders to intensify their rescue efforts.
European Stocks Advance on U.S. Economy; BNP Paribas, H&M Climb (Source: Bloomberg)
European stocks climbed for the fourth time in five days as U.S. employment and growth data exceeded forecasts and German lawmakers backed an enhanced euro- region rescue fund. BNP Paribas (BNP) SA and Deutsche Bank AG led gains in banking shares, rallying more than 3 percent. Hennes & Mauritz AB (HMB) surged 6.8 percent after Europe’s second-largest clothing retailer reported earnings that beat estimates. Swatch Group AG (UHR) led luxury-goods makers lower as a Bloomberg survey showed most global investors predict Chinese growth will slow to less than 5 percent by 2016. The Stoxx Europe 600 Index climbed 0.7 percent to 228.9 at the 4:30 p.m. close in London after swinging between gains and losses at least 15 times. The measure is heading for its worst quarter since 2008, having fallen 16 percent amid concern global economic growth is slowing and policy makers are struggling to contain the European debt crisis. The gauge has dropped 3.6 percent this month following a 10 percent slump in August.
New Zealand Loses AAA Ratings, Yields Jump (Source: Bloomberg)
New Zealand lost its AAA grades on local-currency debt at Fitch Ratings and Standard & Poor’s, which both cited concerns about the nation’s fiscal burden. Benchmark government yields rose the most this year. The outlook is stable after the long-term local-currency rating was reduced one level to AA+ and the foreign-currency rating was cut to AA from AA+, S&P said in a statement, matching actions announced yesterday by Fitch. New Zealand joins the U.S. to Italy among nations whose sovereign credit ratings have been cut this year, as governments’ struggles to cope with their debt burdens roil financial markets. Fitch’s downgrade may raise funding costs, adding to the case for Reserve Bank Governor Alan Bollard to keep interest rates at a record 2.5 percent low. Bond yields rose amid concern some overseas investors will sell their New Zealand holdings after the downgrades.
Asian stocks swung between gains and losses as the latest U.S. economic reports failed to soothe investors’ concern that growth in the world’s largest economic is faltering. James Hardie Industries SE (JHX), the building materials supplier that counts the U.S. as its biggest market, fell 0.7 percent in Sydney as sales of previously owned American homes dropped. Promise Co. climbed 2.6 percent in Tokyo after the Nikkei newspaper reported that Sumitomo Mitsui Financial Group Inc. plans to make the consumer lending company a wholly-owned unit. Inpex Corp., Japan’s largest energy explorer, rose 1.5 percent as crude oil prices increased. “Concerns about the U.S. economic slowdown are lingering,” said Juichi Wako, a senior strategist at Tokyo- based Nomura Holdings Inc. “We need to see more U.S. reports.”
U.S. Consumer Confidence Slumps on Concern Financial Conditions Worsening (Source: Bloomberg)
Consumer confidence slumped last week to the second-lowest level on record as Americans grew more concerned with their financial situation and the buying climate worsened. The Bloomberg Consumer Comfort Index dropped to minus 53 in the period ended Sept. 25 from minus 52.1 the prior week. Another report showed the economy grew at a faster pace in the second quarter than previously estimated. The comfort gauge showed the share of households saying it was a bad time to buy needed goods and services climbed to the highest level in three years, raising the risk that the biggest part of the economy will slow heading into the holiday shopping season. A lack of jobs and growing concern that policy makers will be unable to spur the recovery may keep sentiment depressed.
U.S. Economy Grew at a Revised 1.3% Pace Last Quarter, More Than Estimated (Source: Bloomberg)
The U.S. economy grew at a 1.3 percent pace in the second quarter, faster than estimated last month and helped by exports and spending on services. The revised rise in gross domestic product compares with a 1 percent gain previously calculated, Commerce Department figures showed today in Washington. The median forecast of economists surveyed by Bloomberg News was 1.2 percent, following a 0.4 percent increase in the first three months of the year. Slower global markets may limit growth in exports and business spending, which has bolstered U.S. manufacturing, a pillar of the expansion. The lack of hiring and depressed consumer confidence add to concerns the economy is facing “significant” risks, helping explain why Federal Reserve policy makers took another step this month to revive the recovery.
Pending U.S. Home Sales Decline 1.2% as Lower Prices Fail to Stoke Demand (Source: Bloomberg)
The number of contracts to purchase previously owned U.S. homes fell in August, a sign that lower prices and borrowing costs are doing little to stoke demand. The 1.2 percent decrease in the index of pending home sales followed a 1.3 percent drop the previous month, the National Association of Realtors said today in Washington. Economists forecast a 2 percent drop, according to the median of 43 estimates in a Bloomberg News survey. Unemployment at 9.1 percent and the acceleration of foreclosure processing indicate it may take years to clear the oversupply of houses, an obstacle for stabilizing the market. The prospect of contract cancellations due to stricter underwriting standards and low appraisals means some signings may not translate into closings.
Plosser Says Easing Moves May Hurt Fed’s Credibility, Fail to Boost Growth (Source: Bloomberg)
Federal Reserve Bank of Philadelphia President Charles Plosser said the central bank may be undermining its own credibility by pushing forward with monetary easing that will do little to boost growth. “The actions taken in August and September tend to undermine the Fed’s credibility by giving the impression that we think such policies can have a major impact on the speed of the recovery,” Plosser said today in a speech in Radnor, Pennsylvania. “It is my assessment that they will not.” Plosser’s remarks are his first since he joined Fed district bank presidents Richard Fisher of Dallas and Narayana Kocherlakota of Minneapolis in dissenting from a Fed decision for a second straight month. The regional Fed bank presidents pose the most opposition within the Federal Open Market Committee in almost 19 years, opposing last week a plan to sell $400 billion of short-term Treasury securities and buy $400 billion of longer-term securities.
BofA Plans $5 Monthly Fee for Some Debit-Cards (Source: Bloomberg)
Bank of America Corp. (BAC), the biggest U.S. lender by assets, plans to announce a $5 monthly charge for some debit-card users to recoup revenue lost after new federal rules capped so-called swipe fees. Customers with lower-tiered accounts, including the firm’s online-banking option, may start getting assessed the fee for debit-card purchases in January, said Anne Pace, a Bank of America spokeswoman. Users won’t be charged for cash-machine withdrawals, and clients with premium accounts including those linked to the Merrill Lynch brokerage aren’t affected, she said. Bank of America, based in Charlotte, North Carolina, is joining rivals including JPMorgan Chase & Co. (JPM), Wells Fargo & Co. (WFC) and SunTrust Banks Inc. (STI) in rolling out new charges for debit- card users. The Federal Reserve’s rules limiting swipe fees, or interchange, take effect next month. Banking industry representatives have said the changes enrich merchants while penalizing lower-income consumers.
Initial Jobless Claims in U.S. Decline on Seasonal Adjustment Difficulties (Source: Bloomberg)
Claims for U.S. unemployment benefits fell more than forecast last week as an atypical calendar alignment made it more difficult for the government to adjust the data for seasonal changes. Applications for jobless benefits dropped by 37,000 in the week ended Sept. 24 to 391,000, the fewest since April, Labor Department figures showed today. Economists forecast 420,000 claims, according to the median estimate in a Bloomberg News survey. An agency official said the data probably reflected a “slight mistiming” in the seasonal factors used to modify the figures. The pace of firings has remained little changed this year while companies are reluctant to hire at a time when the economy is slowing and concerns of a European default rise. Federal Reserve policy makers last week announced more unconventional measures to boost jobs and the economy.
U.S. Stocks Advance After Jobless Claims Offset Slump by Technology Shares (Source: Bloomberg)
U.S. stocks rose, rebounding from a 1 percent decline in the Standard & Poor’s 500 Index, as lower- than-estimated claims for unemployment benefits and helped offset losses by consumer and technology shares. Bank of America Corp. (BAC) and JPMorgan Chase & Co. (JPM) climbed at least 3 percent as European lenders soared after German lawmakers backed an enhanced euro-region rescue fund. General Electric Co. (GE) gained 2.7 percent, while Hewlett-Packard Co. (HPQ) added 2.5 percent as jobless claims fell more than forecast and the U.S. economy’s second-quarter expansion topped projections. Advanced Micro Devices Inc. (AMD) slid 14 percent after the chipmaker cut its forecast. The S&P 500 added 0.8 percent to 1,160.40 at 4 p.m. New York time after rallying as much as 2.2 percent. The Dow Jones Industrial Average added 143.08 points, or 1.3 percent, to 11,153.98. The Nasdaq Composite Index fell 0.4 percent as Apple Inc. (AAPL) declined 1.6 percent, dropping for a fourth straight day.
Treasury Yields Set for Biggest Weekly Gain in Three Months on Policy Bets (Source: Bloomberg)
Treasury yields were set for the biggest weekly increase in three months on speculation policy makers will introduce more steps to stimulate growth, easing concern that advanced economies may slip back into recession. Ten-year Treasuries maintained five-days of losses before the European Central Bank’s policy meeting next week amid concern the euro region’s prolonged debt crisis will hurt the world economy. U.S. government debt failed to compensate investors for inflation, with 10-year yields lower than the rate of consumer price increases. “Yields have risen as there are expectations among investors that governments will come up with various economic measures,” said Hiromasa Nakamura, a senior investor in Tokyo at Mizuho Asset Management Co., which oversees the equivalent of $39 billion. “Speculation that the ECB will cut rates stokes expectations for recovery.”
China Growth Seen Less Than 5% by 2016: Poll (Source: Bloomberg)
Most global investors predict Chinese growth will slow to less than half the pace sustained since the government began dismantling Mao Zedong’s communist economy three decades ago, a Bloomberg poll indicated. Fifty-nine percent of respondents said China’s gross domestic product, which rose 9.5 percent last quarter, will gain less than 5 percent annually by 2016. Twelve percent see such a slowdown within a year, and 47 percent said it will occur in two to five years, the quarterly Bloomberg Global Poll of investors, analysts and traders who are Bloomberg subscribers showed. China, which saw its exports tumble the most since at least 1979 amid the 2008-09 global crisis, may not be able to rely on trade in any prolonged demand slump in Europe and the U.S., now battling to avoid returning to a recession. Managing the economic downshift would fall to the Communist Party’s next leaders, as President Hu Jintao and Premier Wen Jiabao begin their transition from power late next year.
Japan’s Industrial Output Rises Less Than Expected, Weighed by Strong Yen (Source: Bloomberg)
Japan’s industrial production rose less than expected in August, signaling that a strong yen and slowing growth abroad are dragging on the nation’s recovery from the March 11 earthquake and tsunami. Factory output increased 0.8 percent in August from July, the trade ministry said in Tokyo today. The median estimate of 28 economists surveyed by Bloomberg News was for a 1.5 percent gain. Today’s report, coming a day after data showed retail sales fell for a second month in August, adds to evidence that the expansion in the world’s third-largest economy is weakening. The International Monetary Fund cut its global growth forecast for this year and next, increasing challenges for Japanese exporters, whose profits are already being eroded by a currency near postwar highs against the dollar.
Japanese Stocks Swing Between Gains, Losses Amid U.S. Growth Concern (Source: Bloomberg)
Japanese stocks swung between gains and losses, with the Nikkei 225 (NKY) Stock Average struggling to extend a three-day winning streak, after U.S. economic reports failed to assuage concern the world’s largest economy is slowing. The Nikkei 225 advanced 0.4 percent to 8,735.72 as of 9:31 a.m. in Tokyo after dropping as much 0.3 percent. The broader Topix index gained 0.3 percent to 764.49 after declining 0.4 percent. “Concerns about the U.S. economic slowdown are lingering, and we need to see more U.S. reports,” said Juichi Wako, a senior strategist at Tokyo-based Nomura Holdings Inc.
South Korea’s Industrial Output Expands Faster as Weakening Won Supports (Source: Bloomberg)
South Korea’s industrial production expanded at a faster pace in August as a weakening won helped exporters weather the global economic slowdown. Output rose 4.8 percent from a year earlier after gaining a revised 4 percent in July, Statistics Korea said today. The median estimate of 14 economists in a Bloomberg News survey was for a 6.1 percent gain. Production slid 1.9 percent from July, when it decreased a revised 0.3 percent. South Korea’s currency weakened more than 9 percent against the dollar this month as a deepening European debt crisis and signs of a U.S. slowdown increased concern about the global outlook. The won’s decline may prove inadequate to support exports as a slowing global economy lessens demand for the nation’s products, said economist Kong Dong Rak.
Korean Won Set for Biggest Monthly Loss Since February 2009; Bonds Fall (Source: Bloomberg)
South Korea’s won headed for biggest monthly loss since February 2009 as signs the global recovery is losing steam and Europe’s debt crisis prompted investors to favor the relative safety of the dollar. Bonds fell. The currency weakened today and stocks declined after a government report showed industrial production fell more than economists forecast in August. Overseas investors sold $1.5 billion more Korean stocks than they bought this month through yesterday, based on exchange figures. Data tomorrow is expected to show exports rose in September at the slowest pace in three months, according to a Bloomberg survey of economists. The won tumbled 9.5 percent this month to 1,178.65 per dollar as of 9:55 a.m. in Seoul, according to data compiled by Bloomberg. The currency fell 0.4 percent today, poised for a 9.4 percent drop this quarter, as Greece struggles to meet the terms of a bailout.
Europe Prepares Next Crisis Steps After Merkel Rescue-Fund Parliament Win (Source: Bloomberg)
European leaders are turning their focus to the next steps to stem the region’s debt crisis after German lawmakers approved an expansion of the euro-area rescue fund’s firepower. With the European Commission now expecting the overhauled 440 billion-euro ($599 billion) European Financial Stability Facility in place by mid-October, euro finance chiefs will next week discuss accelerating enactment of a permanent rescue fund that provides more capital and a tool for managing defaults. “I’m not convinced that this bailout package is going to be remotely enough for the euro zone itself,” Wilbur Ross, the billionaire chairman of private-equity firm WL Ross & Co., said yesterday in an interview on Bloomberg Television’s “In the Loop” with Betty Liu. “I think it should start with a ‘T,’ not a ‘B,’” he said, referring to trillions instead of billions.
Europe Financial Meltdown Converging With Slump Seen by Investors in Poll (Source: Bloomberg)
Global investors anticipate Europe’s debt crisis leading to an economic slump, a financial meltdown and social unrest in the next year with 72 percent predicting a country abandoning the euro as a shared currency within five years, a Bloomberg survey found. About three-quarters of those questioned this week said the euro-area economy will fall into recession during the next 12 months and 53 percent said turmoil will worsen in a banking sector laden with government bonds, according to the quarterly Global Poll of 1,031 investors, analysts and traders who are Bloomberg subscribers. Forty percent see the 17-nation currency bloc losing at least one member in the next year.
More than a third of participants say deteriorating European debt will derail the world economy over the next year, with the pessimism highlighting the pressure European policy makers face as they try again to fix their 18-month sovereign crisis. Stocks last week tumbled into their first bear market in two years and foreign leaders, including President Barack Obama, are urging European leaders to intensify their rescue efforts.
European Stocks Advance on U.S. Economy; BNP Paribas, H&M Climb (Source: Bloomberg)
European stocks climbed for the fourth time in five days as U.S. employment and growth data exceeded forecasts and German lawmakers backed an enhanced euro- region rescue fund. BNP Paribas (BNP) SA and Deutsche Bank AG led gains in banking shares, rallying more than 3 percent. Hennes & Mauritz AB (HMB) surged 6.8 percent after Europe’s second-largest clothing retailer reported earnings that beat estimates. Swatch Group AG (UHR) led luxury-goods makers lower as a Bloomberg survey showed most global investors predict Chinese growth will slow to less than 5 percent by 2016. The Stoxx Europe 600 Index climbed 0.7 percent to 228.9 at the 4:30 p.m. close in London after swinging between gains and losses at least 15 times. The measure is heading for its worst quarter since 2008, having fallen 16 percent amid concern global economic growth is slowing and policy makers are struggling to contain the European debt crisis. The gauge has dropped 3.6 percent this month following a 10 percent slump in August.
New Zealand Loses AAA Ratings, Yields Jump (Source: Bloomberg)
New Zealand lost its AAA grades on local-currency debt at Fitch Ratings and Standard & Poor’s, which both cited concerns about the nation’s fiscal burden. Benchmark government yields rose the most this year. The outlook is stable after the long-term local-currency rating was reduced one level to AA+ and the foreign-currency rating was cut to AA from AA+, S&P said in a statement, matching actions announced yesterday by Fitch. New Zealand joins the U.S. to Italy among nations whose sovereign credit ratings have been cut this year, as governments’ struggles to cope with their debt burdens roil financial markets. Fitch’s downgrade may raise funding costs, adding to the case for Reserve Bank Governor Alan Bollard to keep interest rates at a record 2.5 percent low. Bond yields rose amid concern some overseas investors will sell their New Zealand holdings after the downgrades.
20110930 1021 Global Commodities Related News.
Commodities Advance, Paring Quarterly Decline After German Vote on Fund (Source: Bloomberg)
Commodities advanced, paring the biggest quarterly drop since 2008, as German lawmakers approved an expansion of the European bailout fund, easing concern that the debt crisis will escalate. The Standard & Poor’s GSCI index of 24 raw materials climbed 0.5 percent to settle at 606.79 at 3:47 p.m. New York time, led by an agriculture rally. Sugar and hogs posted the biggest gains since July, and crude oil closed above $82 a barrel. The dollar dropped against the euro. The lower house of Germany’s parliament granted the bailout fund powers to buy bonds in secondary markets, enable bank recapitalizations and offer precautionary credit lines. The GSCI has slumped 9.3 percent since the end of June, the most since the fourth quarter of 2008, on speculation that a European default would lead to recession, curbing commodity demand.
Corn (Source: CME)
US corn futures stage a small recovery from recent losses, with gains limited by expectations USDA will increase its old-crop supply estimate. Analysts, on average, expect the government in a crop report tomorrow will peg Sep. 1 inventories at 962M bushels, up 4.6% from earlier this month. They suspect livestock producers cut feedings due to high corn prices. Talk of better-than-expected harvest results helps keep a lid on prices, with Price Group's Jack Scoville predicting gains will stay "fairly limited." CBOT December edges up 1 3/4c to $6.32 1/2 a bushel.
Wheat (Source: CME)
Spring wheat futures soar at MGEX, leading a rally in grain prices on expectations USDA will cut its output forecast Friday. The government, in an annual crop report, is projected to slice its estimate for the spring wheat harvest due to stressful summer heat and spring rains that prevented planting. The USDA's previous output estimates "are higher than what's actually out there," says Harlan Klein, a farmer in North Dakota. MGEX December wheat closes up 34 1/4c to $8.95 1/2 a bushel; CBOT December gains 15 1/2c to $6.54 1/4; KCBT December rises 13 1/4c to $7.40.
Rice (Source: CME)
US rice futures tumble as export sales stay weak for the third consecutive week. Sales of 32,900 tons for week ended Sept 22 were poor even though prices have pulled back recently. Losses buck a stronger trend in grain markets that carried wheat, corn and soybeans higher. Still, some analysts see potential for a turnaround. US harvest results "have not been spectacular so far," says Jack Scoville of Price Group, noting "there's a chance USDA could be forced to cut production" in October. CBOT November rice slides 20c to $16.08/hundredweight.
Soy at 10-month low; wheat, corn fall on economic woes
SINGAPORE, Sept 29 (Reuters) - U.S. soy slid to a new 10-month low, while corn lost more ground to drop to its lowest in three months as Europe's debt crisis continued to hammer the commodity markets.
"I think the market is falling due to the economic pessimism. We still see that macroeconomic uncertainty is outweighing the fundamentals," said Lynette Tan, a grains analyst at Phillip Futures in Singapore.
India's monsoon rains begin to weaken in retreat
NEW DELHI, Sept 29 (Reuters) - India's monsoon rains were 33 percent below average in the week to Sept. 28, the weather office said on Thursday, as the four-month rainy season begins to retreat after a normal spell this year, boosting output prospects for crops such as rice and cane.
Monsoon rains have been two percent above average since the start of the June-September season, in line with the weather office's forecast of a normal monsoon in 2011. In the past week it was 29 percent above normal.
Russia harvests 86.4 mln T grain by Sept 28 -AgMin
ORENBURG, Russia, Sept 29 (Reuters) - Russia harvested 86.4 million tonnes of grain by bunker weight by Sept. 28 from 37.3 million hectares, or 84.6 percent of the harvesting area, Agriculture Ministry data showed on Thursday.
In the same period of 2010, when the country was hit by a severe drought, farmers harvested 58.2 million tonnes of grain from 30.7 million hectares, while by Sept. 28, 2009 the crop was 86.2 million tonnes reaped from 35.6 million hectares.
China to boost domestic corn output to meet demand -govt
BEIJING, Sept 29 (Reuters) - China, the world's second-largest corn consumer, said it will focus on raising domestic corn production to meet fast-rising demand and is testing use of genetically modified organism (GMO) technology to boost output, a senior government official said on Thursday.
In a bid to tame booming demand, Beijing will continue to control the use of corn by industrial processors, whose soaring consumption has helped exacerbate a corn deficit that has pushed corn prices to record highs despite record corn harvests.
Philippines' NFA head: Typhoon damage on rice worrisome
MANILA, Sept 29 (Reuters) - Damage to rice crops by Typhoon Nesat was worrisome and the Philippines cannot rule out the need to import rice soon to replenish its reserves, the head of the government's grain procurement agency said on Thursday.
Reports from local governments of heavily-flooded provinces showed a bigger crop damage than the Agriculture department's initial estimates, National Food Authority (NFA) Administrator Angelito Banayo told Reuters.
Estonia 2011 grain harvest up 16.6 pct on yr
TALLINN, Sept 29 (Reuters) - Estonia's preliminary grain harvest for 2011 reached 791,000 tonnes, up 16.6 percent from 2010, the statistics office said on Thursday.
The office said on its website that 96 percent of this year's crop was in as of Sept 15, with the harvest for winter planted cereal crops totaling 194,300 tonnes compared to 184,600 tonnes in 2010 and the spring planted cereals harvest up to 596,700 tonnes compared to 492,800 tonnes in 2010.
Better harvest weather soon for eastern US Midwest
CHICAGO, Sept 28 (Reuters) - Drier weather will soon move into the eastern U.S. Midwest corn and soybean region, boosting drydown of mature crops and speeding the harvest, an agricultural meteorologist said Wednesday.
"They've been plagued by showers for about the past week but there is a front moving in and it should begin drying down by Friday and continue through at least mid-week next week," said John Dee, meteorologist for Global Weather Monitoring.
Russian Domestic Wheat Prices Nudge Lower (Source: CME)
Russian domestic wheat prices nudged down last week, according to Andrey Sizov. Jr., managing director of Moscow-based think tank SovEcon. Domestic prices for third-grade milling wheat have fallen to 6,200 rubles a metric ton ($193.76), while fourth-grade milling wheat fell 1.6% to RUB6,100/ton ($191.4). Feed wheat and feed barley also fell 0.5% to RUB5,200/ton ($163.2). Despite the slightly lower prices, "export demand is pretty strong," Sizov Jr. said. "I think Russia will be able to export just below 4 million tons of wheat in September."
Argentina Crops Get Some Rain Relief, But More Needed -Exchange (Source: CME)
Argentina's developing wheat crop got some relief from scattered showers over the past week, but much of the crop still needs more rain, the Buenos Aires Cereals Exchange said in its weekly crop report. "The rain provided partial relief for the stressed condition of the crop," the exchange said. However, "the need for new rain is every time more pressing if average yields are to be obtained," the exchange said. Farmers are expected to start harvesting the first wheat fields of the season in the northern province of Salta in the coming days, according to the exchange. The agriculture ministry is expecting 2011-12 wheat production to total 11 million to 13 million metric tons, compared with the 15 million metric tons the U.S. Department of Agriculture pegged the 2010-11 crop at. Argentina is the world's third-largest soybean exporter, ranks second in corn, first in soymeal and soyoil, and is a leading exporter of wheat and sunflower seed oil.
Meanwhile, corn planting is advancing but is delayed in many areas as farmers hold off for more rain. So far, 13.3% of the 3.5 million hectares seen going to corn this season has been planted, down 12.7 percentage points from the progress made at this point last year, the exchange said. The exchange is expecting a storm front to roll in over the next days and soak most of the farm belt, but the driest areas in the west aren't expected to get enough rain. Farmers are worried that a developing La Nina weather system could bring drought this season, although specialists say those fears are likely overblown. The pattern should be similar to the recently finished 2010-11 season that was also affected by La Nina, according to the Buenos Aires Cereals Exchange's chief climatologist, Eduardo Sierra. Farmers and global grain markets are nervous as they worry over a repeat of the last strong La Nina year.
During the 2008-09 season, the expected rains in January never came, leaving crops baking in the fields during the hot summer. As much as a third of the crops were lost. La Nina is seen bringing dry weather through September, but relatively wet conditions from October through the first half of November. Another long dry stretch is expected from November through the first two weeks of January, when rain levels should return to normal. La Nina refers to cooling of the equatorial Pacific Ocean that usually brings dry weather to the farm belts of Argentina, Uruguay, Paraguay and the south of Brazil. El Nino is the opposite, with warming ocean temperatures and heavier-than-normal rainfall.
Wheat Advances as Dry Weather on U.S. Plains May Reduce Winter Planting (Source: Bloomberg)
Wheat gained, reversing earlier losses, on speculation that persistent dry weather in the U.S. southern Great Plains will curb planting of the winter crop and reduce production. Little or no rain has fallen in parts of Kansas, Oklahoma and Texas, the biggest producers of winter varieties, in the past 30 days, National Weather Service data show. Plants won’t develop fully and roots won’t be able to establish in the dry soil. Scant precipitation is expected in the next week, Telvent DTN senior agriculture meteorologist Joel Burgio wrote in a report. “Little, if any, significant rain is projected for the central and south plains during at least the next seven days,” Burgio wrote. “We may see some increase in shower activity during the eight- to 10-day period, but mostly for north and east areas.”
India Acreage Of Winter Pulses Likely To Rise On Weather, Price (Source: CME)
Indian farmers are likely to sow pulses in up to 10% more area this winter compared with a year earlier on favorable weather and attracted by higher prices, compensating a drop in output during the summer season, industry executives and analysts said. The output of summer-sown pulses is estimated to fall to 6.43 million metric tons from 7.12 million tons last year. Total production of pulses was at a record 18 million tons in 2010-11. In 2010-11, total area under winter-sown pulses was about 15.7 million hectares, while output was about 11 million tons. "During the Kharif [summer] season, monsoon was delayed in some areas and later there were excess rains in other areas," said Bimal Kothari, vice president of the India Pulses and Grains Association. "That's why the [summer-sown] crop was affected." The excess rains in the later part of the June-September monsoon season will keep soil moisture longer, and this will likely encourage farmers to plant the crop in more areas, he added.
India, where 60% of the farmland is rain-fed, received 2% more rainfall than average so far this monsoon season, according to the weather department. Sowing of winter pulses normally starts during October and they are harvested from February. Chickpea, or chana, is the main winter-sown pulse in the country, accounting for half the total pulse output. Vedika Narvekar, a senior analyst at Angel Commodities, said the area for the winter crop may increase between 5% and 10%. Maharashtra, Rajasthan, Madhya Pradesh, Karnataka and Andhra Pradesh are the main Indian states growing pulses. A rise in the price of chickpea is likely to attract more farmers, said Sunil Sawla of M.M. Agrichem Pvt. Ltd., a Mumbai-based pulses trading company. Chickpea prices have jumped nearly 60% over a year to about INR3,500 per 100 kilograms.
Yields are also likely to improve due to conducive weather, Sawla said.
China 2011 Grain Output Likely A Record, Above 550 Mln Tons (Source: CME)
China's grain output will likely exceed 550 million metric tons this year, setting the country on course for an eighth consecutive record harvest, the Ministry of Agriculture said. China's harvest is closely watched as it is an indicator of the nation's import trends and self-sufficiency. "Drought conditions were quite heavy especially in the south and west, but [a record harvest] is likely due to increased acreage, record yields and rising output in most other regions," Vice Minister Chen Xiaohua told reporters. China produced 546.4 million tons of grains in 2010. Both per-hectare average yields and overall grain production will likely set records this year, while ongoing corn and rice harvests show good quality, Chen said.
The average grain yield will likely rise by 4.9 kilograms per mu, equivalent to 73.5 kilograms/hectare, compared with the 2009 record, Chen said. Early rice yields rose 1 kg/mu, or 15 kg/hectare, compared with 2009, while autumn grain yields were also expected to top 2009 levels, he said, without providing actual 2009 yield figures. Production in the northeast, China's key agricultural belt, will likely account for more than 70% of the total this year, offsetting losses in the south and west, Chen said. Chen acknowledged that grain prices have risen sharply in some areas, attributing it on higher demand, cost of production and global conditions, but he added the government's policies will likely sustain "stable, reasonable" price growth. Among major grain categories, corn prices have risen most sharply--by 33% in the major processing province of Shandong.
Chen said the government will focus its policy response on improving domestic corn output and continue to exercise control over consumption by corn processors. Global attention has shifted to expectations that China will likely boost corn imports as its domestic stockpiles dwindle to take advantage of recently reduced global corn prices. Chen downplayed such speculation, noting that China's corn imports have fallen on year in the first seven months. China imported 1.6 million tons of corn last year, breaking a 15-year streak of net exports. In August, its corn imports reached the highest monthly volume since last October. The China Feed Industry Association said last week that by 2015, China will likely face a 15 million-ton shortfall in domestic corn output versus consumption. Chen said that the government is still studying whether genetically modified crop technology "is the route to take" to boost corn output.
India contracts to sell 400,000 T new season soymeal
MUMBAI, Sept 28 (Reuters) - India, Asia's top soymeal exporter, has so far struck deals to export 400,000 tonnes of new season soymeal, down by almost half the amount it usually sells around this time, due to uncertainty over demand and falling prices, a senior trade official said on Wednesday.
"People are not sure about prices. Everyone is going very cautiously and slow on exports front due to volatile prices," Rajesh Agrawal, chief co-ordinator at the Soybean Processors Association of India, a top trade body, told Reuters.
Sugar, coffee bounce in technical correction
LONDON, Sept 29 (Reuters) - ICE sugar and arabica coffee futures bounced higher in early trade on Thursday, in a technical correction after turning lower, as markets focused on moves to resolve the euro zone debt crisis.
ICE arabica coffee futures rose from oversold positions, with dealers eyeing dry weather in Brazil, where the wet season which is key to trees flowering is due to start.
Cosan begins covering Santos sugar terminal
SAO PAULO, Sept 28 (Reuters) - Cosan, The world's largest sugar exporter, has begun building a long-awaited rain shield over a bulk sugar terminal in Brazil's main port of Santos, the company's CEO said on Wednesday.
The cover, which is expected to be fully operational in April 2012 -- the start of the next Brazilian cane season -- should boost the flow of sugar through Cosan's terminal by allowing it to load in rainy weather.
Brazil could add 200 mln T cane in 2 yrs-Cosan
SAO PAULO, Sept 28 (Reuters) - Brazil could add 200 million tonnes of cane to its crop in two seasons, simply through the recovery of existing cane yields, the chief executive of the country's largest sugar and ethanol producer Cosan said on Wednesday.
Yields in Brazil have fallen dramatically this year due to aging cane fields that are overdue for replanting and unfavorable weather conditions during the crop development.
Brazil cocoa crop to ease back after 2010 surge
BRASILIA, Sept 28 (Reuters) - Brazil's main crop cocoa harvest, which officially starts next week, will be of a fairly typical size but fall far short of last year's stellar harvest, local cocoa analyst Thomas Hartmann said on Wednesday.
Hartmann, who is based in Brazil's top cocoa state Bahia and has worked in the sector for four decades, said pod counter estimates showed the state would produce 800,000-900,000 60-kg bags compared with 1.26 million bags in 2010's main crop.
Cocoa could defy bearish outlook with brief rally
LONDON, Sept 28 (Reuters) - Cocoa prices have the potential to rise for a short period in coming weeks, even while analysts predict a record 2010/11 surplus, as speculators move to cover a record short position.
West Africa is awash with cocoa after a bumper 2010/11 crop, which along with improving crop prospects for 2011/12 has helped drive New York cocoa futures down almost 30 percent from their 32-year high in March.
Brazil cocoa mid-crop nears end above forecasts
BRASILIA, Sept 28 (Reuters) - Cocoa deliveries to warehouses in Brazil's top cocoa state Bahia, slowed sharply in the past week but the May-September mid-crop will close out at the end of the month with total output well above initial forecasts.
Data from the Bahia Commercial Association showed that arrivals in the week to Sept. 25 from the state totaled 29,625 60-kg bags, down from 37,775 bags in the previous week.
India releases 1.75 mln T non-levy sugar for Oct
MUMBAI, Sept 28 (Reuters) - India has made available 1.75 million tonnes of non-levy sugar for October, higher than 1.7 million tonnes it had released for September, in expectation of higher demand during festival season, the government said in a statement on Wednesday.
Non-levy, or free-sale sugar, is sold by millers in the open market, but the quantity each mill can sell is fixed by the federal government on a monthly basis.
Crude Oil Rises in New York; Poised for Biggest Quarterly Drop Since 2008 (Source: Bloomberg)
Oil rose in New York, paring the steepest quarterly drop since 2008, as investors speculated U.S. fuel demand will increase on signs that the economy of the world’s biggest crude consumer is expanding faster than previously estimated. Futures climbed a second day after reports showed U.S. gross domestic product last quarter beat economists’ estimates and jobless claims dropped more than expected. West Texas Intermediate’s discount to European Brent oil narrowed for a sixth day. The U.S. contract has fallen 13 percent since June 30 on concern economic growth will slow. “The data out of the U.S. is supportive,” said Jonathan Barratt, a managing director of Commodity Broking Services Pty in Sydney. “Volatility continues for the oil market. I don’t expect it to push through $85 in a hurry regardless of what happens in Europe.”
Copper Rout Outpaces Analysts Focused on Production Shortages: Commodities (Source: Bloomberg)
The biggest rout in copper since the global recession drove analysts to cut their price forecasts by 16 percent in a week as mounting concern about growth eroded expectations for supply shortages. The metal may drop as much as 10 percent to $6,500 a metric ton by Dec. 31, according to the median in a Bloomberg survey of 16 analysts and traders. Their estimate was $7,773 a week ago. Speculators in U.S. futures are making the biggest wager on declining prices in more than two years, U.S. government data show. Barclays Capital cut its forecast for the shortfall in global supplies four times since April and Deutsche Bank AG is anticipating a surplus as early as next year.
Commodities tumbled into a bear market this month, dropping 21 percent since April, on concern that slowing growth will curb demand for raw materials. Prices had more than doubled since the beginning of 2009 as surging consumption led by emerging markets created shortages in everything from corn to copper to crude. As many as 5,000 merchants will gather in the British capital from Oct. 3 for London Metal Exchange week, an annual event during which supply contracts are discussed.
Gold Fibonacci Signaling Rebound From September Slump: Technical Analysis (Source: Bloomberg)
Gold, heading to biggest monthly decline since 2008, may rally 8.2 percent by the end of this year, according to technical analysis by Paul Kavanaugh, a senior analyst and broker at PFGBest. The precious metal may rise to $1,750 an ounce, based on Fibonacci analysis, Kavanaugh said yesterday in a telephone interview from Chicago. After plunging as much as 20 percent from a record $1,923.70 on Sept. 6, gold has climbed above the 50 percent resistance level of $1,541.50 and will have to top $1,631.70 before reaching the target price, he said. “This correction was needed and was healthy, but gold is now poised to climb up,” said Kavanaugh, who used technical analysis in early July to correctly predict that cotton would slump below $1 a pound. “If you liked it at $1,900, you have to love it at $1,600.”
Commodities advanced, paring the biggest quarterly drop since 2008, as German lawmakers approved an expansion of the European bailout fund, easing concern that the debt crisis will escalate. The Standard & Poor’s GSCI index of 24 raw materials climbed 0.5 percent to settle at 606.79 at 3:47 p.m. New York time, led by an agriculture rally. Sugar and hogs posted the biggest gains since July, and crude oil closed above $82 a barrel. The dollar dropped against the euro. The lower house of Germany’s parliament granted the bailout fund powers to buy bonds in secondary markets, enable bank recapitalizations and offer precautionary credit lines. The GSCI has slumped 9.3 percent since the end of June, the most since the fourth quarter of 2008, on speculation that a European default would lead to recession, curbing commodity demand.
Corn (Source: CME)
US corn futures stage a small recovery from recent losses, with gains limited by expectations USDA will increase its old-crop supply estimate. Analysts, on average, expect the government in a crop report tomorrow will peg Sep. 1 inventories at 962M bushels, up 4.6% from earlier this month. They suspect livestock producers cut feedings due to high corn prices. Talk of better-than-expected harvest results helps keep a lid on prices, with Price Group's Jack Scoville predicting gains will stay "fairly limited." CBOT December edges up 1 3/4c to $6.32 1/2 a bushel.
Wheat (Source: CME)
Spring wheat futures soar at MGEX, leading a rally in grain prices on expectations USDA will cut its output forecast Friday. The government, in an annual crop report, is projected to slice its estimate for the spring wheat harvest due to stressful summer heat and spring rains that prevented planting. The USDA's previous output estimates "are higher than what's actually out there," says Harlan Klein, a farmer in North Dakota. MGEX December wheat closes up 34 1/4c to $8.95 1/2 a bushel; CBOT December gains 15 1/2c to $6.54 1/4; KCBT December rises 13 1/4c to $7.40.
Rice (Source: CME)
US rice futures tumble as export sales stay weak for the third consecutive week. Sales of 32,900 tons for week ended Sept 22 were poor even though prices have pulled back recently. Losses buck a stronger trend in grain markets that carried wheat, corn and soybeans higher. Still, some analysts see potential for a turnaround. US harvest results "have not been spectacular so far," says Jack Scoville of Price Group, noting "there's a chance USDA could be forced to cut production" in October. CBOT November rice slides 20c to $16.08/hundredweight.
Soy at 10-month low; wheat, corn fall on economic woes
SINGAPORE, Sept 29 (Reuters) - U.S. soy slid to a new 10-month low, while corn lost more ground to drop to its lowest in three months as Europe's debt crisis continued to hammer the commodity markets.
"I think the market is falling due to the economic pessimism. We still see that macroeconomic uncertainty is outweighing the fundamentals," said Lynette Tan, a grains analyst at Phillip Futures in Singapore.
India's monsoon rains begin to weaken in retreat
NEW DELHI, Sept 29 (Reuters) - India's monsoon rains were 33 percent below average in the week to Sept. 28, the weather office said on Thursday, as the four-month rainy season begins to retreat after a normal spell this year, boosting output prospects for crops such as rice and cane.
Monsoon rains have been two percent above average since the start of the June-September season, in line with the weather office's forecast of a normal monsoon in 2011. In the past week it was 29 percent above normal.
Russia harvests 86.4 mln T grain by Sept 28 -AgMin
ORENBURG, Russia, Sept 29 (Reuters) - Russia harvested 86.4 million tonnes of grain by bunker weight by Sept. 28 from 37.3 million hectares, or 84.6 percent of the harvesting area, Agriculture Ministry data showed on Thursday.
In the same period of 2010, when the country was hit by a severe drought, farmers harvested 58.2 million tonnes of grain from 30.7 million hectares, while by Sept. 28, 2009 the crop was 86.2 million tonnes reaped from 35.6 million hectares.
China to boost domestic corn output to meet demand -govt
BEIJING, Sept 29 (Reuters) - China, the world's second-largest corn consumer, said it will focus on raising domestic corn production to meet fast-rising demand and is testing use of genetically modified organism (GMO) technology to boost output, a senior government official said on Thursday.
In a bid to tame booming demand, Beijing will continue to control the use of corn by industrial processors, whose soaring consumption has helped exacerbate a corn deficit that has pushed corn prices to record highs despite record corn harvests.
Philippines' NFA head: Typhoon damage on rice worrisome
MANILA, Sept 29 (Reuters) - Damage to rice crops by Typhoon Nesat was worrisome and the Philippines cannot rule out the need to import rice soon to replenish its reserves, the head of the government's grain procurement agency said on Thursday.
Reports from local governments of heavily-flooded provinces showed a bigger crop damage than the Agriculture department's initial estimates, National Food Authority (NFA) Administrator Angelito Banayo told Reuters.
Estonia 2011 grain harvest up 16.6 pct on yr
TALLINN, Sept 29 (Reuters) - Estonia's preliminary grain harvest for 2011 reached 791,000 tonnes, up 16.6 percent from 2010, the statistics office said on Thursday.
The office said on its website that 96 percent of this year's crop was in as of Sept 15, with the harvest for winter planted cereal crops totaling 194,300 tonnes compared to 184,600 tonnes in 2010 and the spring planted cereals harvest up to 596,700 tonnes compared to 492,800 tonnes in 2010.
Better harvest weather soon for eastern US Midwest
CHICAGO, Sept 28 (Reuters) - Drier weather will soon move into the eastern U.S. Midwest corn and soybean region, boosting drydown of mature crops and speeding the harvest, an agricultural meteorologist said Wednesday.
"They've been plagued by showers for about the past week but there is a front moving in and it should begin drying down by Friday and continue through at least mid-week next week," said John Dee, meteorologist for Global Weather Monitoring.
Russian Domestic Wheat Prices Nudge Lower (Source: CME)
Russian domestic wheat prices nudged down last week, according to Andrey Sizov. Jr., managing director of Moscow-based think tank SovEcon. Domestic prices for third-grade milling wheat have fallen to 6,200 rubles a metric ton ($193.76), while fourth-grade milling wheat fell 1.6% to RUB6,100/ton ($191.4). Feed wheat and feed barley also fell 0.5% to RUB5,200/ton ($163.2). Despite the slightly lower prices, "export demand is pretty strong," Sizov Jr. said. "I think Russia will be able to export just below 4 million tons of wheat in September."
Argentina Crops Get Some Rain Relief, But More Needed -Exchange (Source: CME)
Argentina's developing wheat crop got some relief from scattered showers over the past week, but much of the crop still needs more rain, the Buenos Aires Cereals Exchange said in its weekly crop report. "The rain provided partial relief for the stressed condition of the crop," the exchange said. However, "the need for new rain is every time more pressing if average yields are to be obtained," the exchange said. Farmers are expected to start harvesting the first wheat fields of the season in the northern province of Salta in the coming days, according to the exchange. The agriculture ministry is expecting 2011-12 wheat production to total 11 million to 13 million metric tons, compared with the 15 million metric tons the U.S. Department of Agriculture pegged the 2010-11 crop at. Argentina is the world's third-largest soybean exporter, ranks second in corn, first in soymeal and soyoil, and is a leading exporter of wheat and sunflower seed oil.
Meanwhile, corn planting is advancing but is delayed in many areas as farmers hold off for more rain. So far, 13.3% of the 3.5 million hectares seen going to corn this season has been planted, down 12.7 percentage points from the progress made at this point last year, the exchange said. The exchange is expecting a storm front to roll in over the next days and soak most of the farm belt, but the driest areas in the west aren't expected to get enough rain. Farmers are worried that a developing La Nina weather system could bring drought this season, although specialists say those fears are likely overblown. The pattern should be similar to the recently finished 2010-11 season that was also affected by La Nina, according to the Buenos Aires Cereals Exchange's chief climatologist, Eduardo Sierra. Farmers and global grain markets are nervous as they worry over a repeat of the last strong La Nina year.
During the 2008-09 season, the expected rains in January never came, leaving crops baking in the fields during the hot summer. As much as a third of the crops were lost. La Nina is seen bringing dry weather through September, but relatively wet conditions from October through the first half of November. Another long dry stretch is expected from November through the first two weeks of January, when rain levels should return to normal. La Nina refers to cooling of the equatorial Pacific Ocean that usually brings dry weather to the farm belts of Argentina, Uruguay, Paraguay and the south of Brazil. El Nino is the opposite, with warming ocean temperatures and heavier-than-normal rainfall.
Wheat Advances as Dry Weather on U.S. Plains May Reduce Winter Planting (Source: Bloomberg)
Wheat gained, reversing earlier losses, on speculation that persistent dry weather in the U.S. southern Great Plains will curb planting of the winter crop and reduce production. Little or no rain has fallen in parts of Kansas, Oklahoma and Texas, the biggest producers of winter varieties, in the past 30 days, National Weather Service data show. Plants won’t develop fully and roots won’t be able to establish in the dry soil. Scant precipitation is expected in the next week, Telvent DTN senior agriculture meteorologist Joel Burgio wrote in a report. “Little, if any, significant rain is projected for the central and south plains during at least the next seven days,” Burgio wrote. “We may see some increase in shower activity during the eight- to 10-day period, but mostly for north and east areas.”
India Acreage Of Winter Pulses Likely To Rise On Weather, Price (Source: CME)
Indian farmers are likely to sow pulses in up to 10% more area this winter compared with a year earlier on favorable weather and attracted by higher prices, compensating a drop in output during the summer season, industry executives and analysts said. The output of summer-sown pulses is estimated to fall to 6.43 million metric tons from 7.12 million tons last year. Total production of pulses was at a record 18 million tons in 2010-11. In 2010-11, total area under winter-sown pulses was about 15.7 million hectares, while output was about 11 million tons. "During the Kharif [summer] season, monsoon was delayed in some areas and later there were excess rains in other areas," said Bimal Kothari, vice president of the India Pulses and Grains Association. "That's why the [summer-sown] crop was affected." The excess rains in the later part of the June-September monsoon season will keep soil moisture longer, and this will likely encourage farmers to plant the crop in more areas, he added.
India, where 60% of the farmland is rain-fed, received 2% more rainfall than average so far this monsoon season, according to the weather department. Sowing of winter pulses normally starts during October and they are harvested from February. Chickpea, or chana, is the main winter-sown pulse in the country, accounting for half the total pulse output. Vedika Narvekar, a senior analyst at Angel Commodities, said the area for the winter crop may increase between 5% and 10%. Maharashtra, Rajasthan, Madhya Pradesh, Karnataka and Andhra Pradesh are the main Indian states growing pulses. A rise in the price of chickpea is likely to attract more farmers, said Sunil Sawla of M.M. Agrichem Pvt. Ltd., a Mumbai-based pulses trading company. Chickpea prices have jumped nearly 60% over a year to about INR3,500 per 100 kilograms.
Yields are also likely to improve due to conducive weather, Sawla said.
China 2011 Grain Output Likely A Record, Above 550 Mln Tons (Source: CME)
China's grain output will likely exceed 550 million metric tons this year, setting the country on course for an eighth consecutive record harvest, the Ministry of Agriculture said. China's harvest is closely watched as it is an indicator of the nation's import trends and self-sufficiency. "Drought conditions were quite heavy especially in the south and west, but [a record harvest] is likely due to increased acreage, record yields and rising output in most other regions," Vice Minister Chen Xiaohua told reporters. China produced 546.4 million tons of grains in 2010. Both per-hectare average yields and overall grain production will likely set records this year, while ongoing corn and rice harvests show good quality, Chen said.
The average grain yield will likely rise by 4.9 kilograms per mu, equivalent to 73.5 kilograms/hectare, compared with the 2009 record, Chen said. Early rice yields rose 1 kg/mu, or 15 kg/hectare, compared with 2009, while autumn grain yields were also expected to top 2009 levels, he said, without providing actual 2009 yield figures. Production in the northeast, China's key agricultural belt, will likely account for more than 70% of the total this year, offsetting losses in the south and west, Chen said. Chen acknowledged that grain prices have risen sharply in some areas, attributing it on higher demand, cost of production and global conditions, but he added the government's policies will likely sustain "stable, reasonable" price growth. Among major grain categories, corn prices have risen most sharply--by 33% in the major processing province of Shandong.
Chen said the government will focus its policy response on improving domestic corn output and continue to exercise control over consumption by corn processors. Global attention has shifted to expectations that China will likely boost corn imports as its domestic stockpiles dwindle to take advantage of recently reduced global corn prices. Chen downplayed such speculation, noting that China's corn imports have fallen on year in the first seven months. China imported 1.6 million tons of corn last year, breaking a 15-year streak of net exports. In August, its corn imports reached the highest monthly volume since last October. The China Feed Industry Association said last week that by 2015, China will likely face a 15 million-ton shortfall in domestic corn output versus consumption. Chen said that the government is still studying whether genetically modified crop technology "is the route to take" to boost corn output.
India contracts to sell 400,000 T new season soymeal
MUMBAI, Sept 28 (Reuters) - India, Asia's top soymeal exporter, has so far struck deals to export 400,000 tonnes of new season soymeal, down by almost half the amount it usually sells around this time, due to uncertainty over demand and falling prices, a senior trade official said on Wednesday.
"People are not sure about prices. Everyone is going very cautiously and slow on exports front due to volatile prices," Rajesh Agrawal, chief co-ordinator at the Soybean Processors Association of India, a top trade body, told Reuters.
Sugar, coffee bounce in technical correction
LONDON, Sept 29 (Reuters) - ICE sugar and arabica coffee futures bounced higher in early trade on Thursday, in a technical correction after turning lower, as markets focused on moves to resolve the euro zone debt crisis.
ICE arabica coffee futures rose from oversold positions, with dealers eyeing dry weather in Brazil, where the wet season which is key to trees flowering is due to start.
Cosan begins covering Santos sugar terminal
SAO PAULO, Sept 28 (Reuters) - Cosan, The world's largest sugar exporter, has begun building a long-awaited rain shield over a bulk sugar terminal in Brazil's main port of Santos, the company's CEO said on Wednesday.
The cover, which is expected to be fully operational in April 2012 -- the start of the next Brazilian cane season -- should boost the flow of sugar through Cosan's terminal by allowing it to load in rainy weather.
Brazil could add 200 mln T cane in 2 yrs-Cosan
SAO PAULO, Sept 28 (Reuters) - Brazil could add 200 million tonnes of cane to its crop in two seasons, simply through the recovery of existing cane yields, the chief executive of the country's largest sugar and ethanol producer Cosan said on Wednesday.
Yields in Brazil have fallen dramatically this year due to aging cane fields that are overdue for replanting and unfavorable weather conditions during the crop development.
Brazil cocoa crop to ease back after 2010 surge
BRASILIA, Sept 28 (Reuters) - Brazil's main crop cocoa harvest, which officially starts next week, will be of a fairly typical size but fall far short of last year's stellar harvest, local cocoa analyst Thomas Hartmann said on Wednesday.
Hartmann, who is based in Brazil's top cocoa state Bahia and has worked in the sector for four decades, said pod counter estimates showed the state would produce 800,000-900,000 60-kg bags compared with 1.26 million bags in 2010's main crop.
Cocoa could defy bearish outlook with brief rally
LONDON, Sept 28 (Reuters) - Cocoa prices have the potential to rise for a short period in coming weeks, even while analysts predict a record 2010/11 surplus, as speculators move to cover a record short position.
West Africa is awash with cocoa after a bumper 2010/11 crop, which along with improving crop prospects for 2011/12 has helped drive New York cocoa futures down almost 30 percent from their 32-year high in March.
Brazil cocoa mid-crop nears end above forecasts
BRASILIA, Sept 28 (Reuters) - Cocoa deliveries to warehouses in Brazil's top cocoa state Bahia, slowed sharply in the past week but the May-September mid-crop will close out at the end of the month with total output well above initial forecasts.
Data from the Bahia Commercial Association showed that arrivals in the week to Sept. 25 from the state totaled 29,625 60-kg bags, down from 37,775 bags in the previous week.
India releases 1.75 mln T non-levy sugar for Oct
MUMBAI, Sept 28 (Reuters) - India has made available 1.75 million tonnes of non-levy sugar for October, higher than 1.7 million tonnes it had released for September, in expectation of higher demand during festival season, the government said in a statement on Wednesday.
Non-levy, or free-sale sugar, is sold by millers in the open market, but the quantity each mill can sell is fixed by the federal government on a monthly basis.
Crude Oil Rises in New York; Poised for Biggest Quarterly Drop Since 2008 (Source: Bloomberg)
Oil rose in New York, paring the steepest quarterly drop since 2008, as investors speculated U.S. fuel demand will increase on signs that the economy of the world’s biggest crude consumer is expanding faster than previously estimated. Futures climbed a second day after reports showed U.S. gross domestic product last quarter beat economists’ estimates and jobless claims dropped more than expected. West Texas Intermediate’s discount to European Brent oil narrowed for a sixth day. The U.S. contract has fallen 13 percent since June 30 on concern economic growth will slow. “The data out of the U.S. is supportive,” said Jonathan Barratt, a managing director of Commodity Broking Services Pty in Sydney. “Volatility continues for the oil market. I don’t expect it to push through $85 in a hurry regardless of what happens in Europe.”
Copper Rout Outpaces Analysts Focused on Production Shortages: Commodities (Source: Bloomberg)
The biggest rout in copper since the global recession drove analysts to cut their price forecasts by 16 percent in a week as mounting concern about growth eroded expectations for supply shortages. The metal may drop as much as 10 percent to $6,500 a metric ton by Dec. 31, according to the median in a Bloomberg survey of 16 analysts and traders. Their estimate was $7,773 a week ago. Speculators in U.S. futures are making the biggest wager on declining prices in more than two years, U.S. government data show. Barclays Capital cut its forecast for the shortfall in global supplies four times since April and Deutsche Bank AG is anticipating a surplus as early as next year.
Commodities tumbled into a bear market this month, dropping 21 percent since April, on concern that slowing growth will curb demand for raw materials. Prices had more than doubled since the beginning of 2009 as surging consumption led by emerging markets created shortages in everything from corn to copper to crude. As many as 5,000 merchants will gather in the British capital from Oct. 3 for London Metal Exchange week, an annual event during which supply contracts are discussed.
Gold Fibonacci Signaling Rebound From September Slump: Technical Analysis (Source: Bloomberg)
Gold, heading to biggest monthly decline since 2008, may rally 8.2 percent by the end of this year, according to technical analysis by Paul Kavanaugh, a senior analyst and broker at PFGBest. The precious metal may rise to $1,750 an ounce, based on Fibonacci analysis, Kavanaugh said yesterday in a telephone interview from Chicago. After plunging as much as 20 percent from a record $1,923.70 on Sept. 6, gold has climbed above the 50 percent resistance level of $1,541.50 and will have to top $1,631.70 before reaching the target price, he said. “This correction was needed and was healthy, but gold is now poised to climb up,” said Kavanaugh, who used technical analysis in early July to correctly predict that cotton would slump below $1 a pound. “If you liked it at $1,900, you have to love it at $1,600.”
20110930 1019 Soy Oil & Palm Oil Related News.
ITS CPO export down 6.3% to 1,520,948 tonnes for the period of 1~30 Sep 2011.
SGS CPO export down 7.1% to 1,505,002 tonnes for the period of 1~30 Sep 2011.
Soybeans (Source: CME)
US soybean futures stabilized, ending a month-long sharp selloff. Traders said the market was deeply undervalued/oversold, drawing support from traders covering some recently sold positions ahead of Friday's report on stocks in all positions as of September 1 from USDA. Higher-than-expected weekly export sales raised optimism that demand was picking up after sharp price declines, analysts say. Spillover support from sharply higher wheat futures and stability in external financial markets added support to spur buying. Investment funds were featured buyers across grain and oilseed markets, and estimated net buyers of 9,000 soybean contracts. CBOT Nov soy end up 6 1/2c at $12.30/bushel.
Soybean Meal/Oil (Source: CME)
Soy product futures end higher, following the lead of soybean futures. Markets borrowed strength from stability in other commodity markets, with traders covering positions ahead of USDA stocks in all positions report Friday, analysts say. CBOT Dec soymeal end up $1.60 at $321.50/short ton, and Dec soyoil finish up 0.19c at 51.95c/pound
Palm oil nears one-year low on fears of 2nd financial crisis
KUALA LUMPUR, Sept 29 (Reuters) - Malaysian palm oil futures dropped to their lowest level in almost a year, dragged down by uncertainty about the global economy as euro zone leaders struggled to prevent another financial crisis.
"The landscape has changed so much in the past few weeks," said a trader with a foreign brokerage in Kuala Lumpur.
India extends ban on vegoil exports - govt
NEW DELHI, Sept 28 (Reuters) - India has extended a ban on exports of vegetable oils by a year to Sept. 30, 2012, a government statement said on Wednesday, continuing its cautious approach in farm trade to ensure local supplies at moderate prices.
India, the world's biggest cooking oil importer, used to export tiny quantities of coconut and groundnut oils before the ban was imposed in early 2008.
SGS CPO export down 7.1% to 1,505,002 tonnes for the period of 1~30 Sep 2011.
Soybeans (Source: CME)
US soybean futures stabilized, ending a month-long sharp selloff. Traders said the market was deeply undervalued/oversold, drawing support from traders covering some recently sold positions ahead of Friday's report on stocks in all positions as of September 1 from USDA. Higher-than-expected weekly export sales raised optimism that demand was picking up after sharp price declines, analysts say. Spillover support from sharply higher wheat futures and stability in external financial markets added support to spur buying. Investment funds were featured buyers across grain and oilseed markets, and estimated net buyers of 9,000 soybean contracts. CBOT Nov soy end up 6 1/2c at $12.30/bushel.
Soybean Meal/Oil (Source: CME)
Soy product futures end higher, following the lead of soybean futures. Markets borrowed strength from stability in other commodity markets, with traders covering positions ahead of USDA stocks in all positions report Friday, analysts say. CBOT Dec soymeal end up $1.60 at $321.50/short ton, and Dec soyoil finish up 0.19c at 51.95c/pound
Palm oil nears one-year low on fears of 2nd financial crisis
KUALA LUMPUR, Sept 29 (Reuters) - Malaysian palm oil futures dropped to their lowest level in almost a year, dragged down by uncertainty about the global economy as euro zone leaders struggled to prevent another financial crisis.
"The landscape has changed so much in the past few weeks," said a trader with a foreign brokerage in Kuala Lumpur.
India extends ban on vegoil exports - govt
NEW DELHI, Sept 28 (Reuters) - India has extended a ban on exports of vegetable oils by a year to Sept. 30, 2012, a government statement said on Wednesday, continuing its cautious approach in farm trade to ensure local supplies at moderate prices.
India, the world's biggest cooking oil importer, used to export tiny quantities of coconut and groundnut oils before the ban was imposed in early 2008.
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