20110825 1020 Global Commodities Related News.

Corn (Source: CME)
US corn futures end mixed in a see-saw session, as the market rebounds late amid ongoing crop worries. Corn and other ag commodities were pressured by profit-taking after recent gains, traders say. But with persistent reports of disappointing crops on an industry crop tour this week, worries about tight supplies kept a floor under the market, they add. While demand is dwindling at current high prices, supply is dwindling faster, they say. Sep corn ends up 1 1/2c to $7.31 3/4 a bushel, Dec corn closed down 1/2c to $7.43, after climbing to another contract high of $7.48 3/4.

Wheat (Source: CME)
US wheat futures stumbled on profit-taking and a lack of fresh supportive news, traders say. Given recent gains and a lack of outside market support, traders took profits on long positions in wheat as well as corn and soybeans, traders say. While crop worries and the prospect of increased demand have supported the market lately, traders say the overall wheat supplies could remain fairly comfortable. Wheat losses led by MGEX, which fell amid pressure from the spring wheat harvest, which is pushing more supply into the market. MGEX Sept wheat down 24 1/4c, or 2.6%, to $9.26 a bushel. CBOT Sept wheat down 8c to $7.49 1/4 and KCBT wheat down 6c to $8.35.

Rice (Source: CME)
US rice futures ended lower as the market stays rangebound below 2 1/2-year highs set earlier in the month. Traders say problems with the US crop, which was scorched by hot weather, has been factored into the market currently. Firm world prices are helping underpin the market. Traders note profit-taking across the grain complex. Sep CBOT rice closes down 11c to $16.85 1/2 a hundredweight. The contract has traded in an increasingly tight range over the past three days.

US wheat drops from over 2-month top; corn, soy dip
SINGAPORE, Aug 24 (Reuters) - U.S. wheat fell 0.4 percent, snapping a three-day rising streak, while corn dipped after climbing to contract highs in the last session as investors booked profit amid  Moody's downgrade of Japan's sovereign debt rating.
"The U.S. dollar is starting to creep a little bit higher so that is possibly a source of downside price pressure," said Luke Mathews, an agricultural commodities strategist at Commonwealth Bank of Australia.

Russia to export no more than 23 mln T of grain-lobby
MOSCOW, Aug 24 (Reuters) - Russia could be limited to 23 million tonnes of grain exports in the 2011/12 crop year with the amount constrained by the country's underdeveloped shipping infrastructure, Russian Grain Union head Arkady Zlochevsky said on Wednesday.
"This season we will have a surplus of at least 27 million tonnes of grain, of which we will not be able to export more than 22-23 million tonnes," he told journalists on Wednesday.

Australia wheat prospects boosted by forecast rain
SYDNEY, Aug 24 (Reuters) - Australia's chances of boosting high protein wheat output have improved after the country's weather bureau on Wednesday forecast rain this weekend across parched regions which produce high quality wheat.
The promise of rain comes as buyers' interest in Australian wheat has resumed because of tight global supplies of high-quality milling grains after weather-related setbacks in North America and Europe.

Nebraska corn forecasts below 2010, above average
NEBRASKA CITY, Neb.,, Aug 23 (Reuters) - Corn yield potential in Nebraska was nearly 3 percent below last year due to a combination of cool temperatures shortly after planting, scorching heat in July, late planting and some wind damage, scouts on annual tour found on Tuesday.
The Pro Farmer annual crop tour pegged 2011 corn yield in Nebraska at 153.70 bushels per acre, below its forecast of 158.29 bushels in 2010 but above the three-year average  of  152.98 bushels per acre.

German rain dampens EU wheat crop outlook
HAMBURG, Aug 23 (Reuters) - Persistent rain is causing concern about late quality damage to the wheat crop in Germany, the European Union's second largest wheat producer, but more promising harvests in France and Britain could compensate, analysts and traders said on Tuesday.
"Germany's harvest is not facing a disaster but there will be a significant loss of quality and more feed wheat produced than expected," one analyst said. "This will reduce German export supplies in the coming year."

S.Africa eyes China, Venezuela for maize export mkts
JOHANNESBURG, Aug 23 (Reuters) - South Africa, looking for more export outlets for its maize after a bumper harvest last year, has received interest from China and is awaiting a response from the Venezuela government, an industry official said on Tuesday.
Nico Hawkins, an economist at farmers' group Grain SA, said a Chinese government delegation visited the country last month to assess the crop.

Russia crops grain from half of sown area - AgMin
MOSCOW, Aug 23 (Reuters) - Russia harvested 57.9 million tonnes of grain by bunker weight by Aug. 23 from 22 million hectares, or 50 percent of the sown area, the agriculture ministry said on Tuesday.
The ministry did not provide a comparative figure, but a year ago it said farmers harvested 41.5 million tonnes of grain by Aug. 25, 31 percent down from the same date in 2009 due to a severe drought.

Wheat Board: 7% Of Crops In Western Canada Harvested (Source: CME)
Favorable weather conditions allowed producers in western Canada to advance harvest operations, with an estimated 7% of the various grains and oilseeds now harvested, according to the Canadian Wheat Board. This compares to the 12% normally harvested by this time of year, the CWB said. Further west, temperatures remained 1 to 4 degrees Celsius below normal. A pocket of moderate precipitation, 15 to 35 millimeters, fell in eastern and central Saskatchewan, while farmers in all provinces were harvesting later than normal. Alberta's weather conditions have left crops the farthest behind in development, the CWB said.

Japan's Feed Corn Imports Lag (Source: CME)
Japan has yet to purchase around 60% of its feed corn import requirements for the October-December period, and buyers are awaiting a downward correction in prices, according to trading executives. The country's purchases are closely watched by traders as it is the world's largest importer of corn, buying around 3.2 million metric tons of feed-grade quality grain each quarter. Japan has so far purchased around 1.3 million metric tons of feed corn for shipment in the fourth quarter, the executives said. Almost all the purchases made so far are from the U.S., an importer in Tokyo said. Another trader said Japanese importers consider current price levels--of around $7.40 a bushel for the most-active December corn futures contract on the Chicago Board of Trade--to be "too high." He said Japan is buying corn around $2.10/bushel over CBOT December futures, cost and freight.
According to trade estimates, final pricing has been completed for around 30% of the corn purchased by Japanese compound-feed manufacturers for October shipment, and none for November and December shipment. Japanese buyers purchase corn at a fixed premium over CBOT contracts, and exercise their option to finalize prices at a date of their choosing. The average futures price at which premiums were locked in for October is around $6.75/bushel, and on this basis the C&F delivered price works out to be around $350/ton, said a Japan-based executive with a global commodities trading company. Traders said that at current prices, imports will cost closer to $375/ton, C&F, which is keeping buyers on the sidelines. In June, offer prices rose above $400/ton. Traders expect prices to fall once the new crop in the U.S. hits the market. The U.S. is world's largest corn exporter with more than 50% share in global trade.
Earlier this month, the U.S. Department of Agriculture lowered its estimate for U.S. corn output in the marketing year that begins Sept. 1, to 328 million tons from 342 million tons. Analysts said that since pollination of the U.S. corn crop is complete in most areas, any further lowering of yield projections seems unlikely. They said Japanese compound feed manufacturers may start pricing their cargoes for November-December shipment once CBOT corn falls below $7.00/bushel.

New Brazilian Agriculture Minister Sworn In (Source: CME)
Brazilian President Dilma Rousseff swore in Mendes Ribeiro as the new agriculture minister Tuesday, after his predecessor stepped down last week amid a corruption scandal. Rousseff expressed confidence that Ribeiro, formerly a congressman, will rise to the "colossal challenge" of running the ministry. "I tracked his career for decades," Rousseff said of Ribeiro, who entered politics in southern Rio Grande do Sul state before joining the federal legislature. "I know his competence." In his own speech, Ribeiro said he doesn't yet have a concrete plan to run the Agriculture Ministry, but said he intends to "guarantee profits for producers" and "add value to the production chain." "I'm going to look for the best team available for this task, the most qualified," Ribeiro said. Rousseff praised former Agriculture Minister Wagner Rossi, who stepped down last week amid allegations of widespread kickbacks at the ministry.
Rousseff thanked the outgoing cabinet member and said he left "a legacy of successes and good results," noting Brazil's rise in recent years to become the world's No. 2 food producer.

Russia Harvests 57.9 Mln Tons Grain To August 23 (Source: CME)
Russia harvested 57.9 million metric tons of grain to Aug. 23 on 22 million hectares, or 50% of the total area to be harvested, the Agriculture Ministry reported Tuesday. The average yield was 2.64 tons a hectare, compared with 2.07 tons a hectare a year ago. The ministry said grain exports since the beginning of the current marketing year July 1 to date totaled 4.4 million tons, 11% more than in the corresponding period in the previous marketing year. Wheat harvest to date was 37.3 million tons on 12.6 million hectares, or 49% of the total area to be harvested. The average yield was 2.97 tons a hectare compared with 2.32 tons a hectare a year ago and 2.89 tons a hectare in 2009. Barley harvest to date was 12.2 million tons on 5.1 million hectares, or 64% of the total area to be harvested, with the average yield of 2.38 tons a hectare. The government expects this year's grain harvest at 90 million tons. Last year's harvest fell to 60.9 million tons from 97.1 million tons in 2009 due to the summer drought.

Water Needs Damn China Food Production (Source: CME)
Beijing's hopes for food self-sufficiency may prove little more than a pipe dream as growing pressures on China's water system limit its agricultural potential. China's influence on world food markets has grown steadily in recent years as consumption has increased, driven by population growth and a growing taste for more Westernized diets by the country's expanding middle class. The Asian giant caused ripples in world grain markets by becoming a net importer of corn for the first time in 15 years last season and analysts expect its sugar imports could rise by 50% in the 2011-12 crop year due to growing demand for sweet foods and drinks. But now experts warn that China's increasingly intensive farming practices--driven by the government's attempts to contain spiralling food-price inflation--are causing long-term damage to the country's water resources, leaving Beijing's goal of food self-sufficiency even further out of reach.
"China's trying as hard as they can to be food self-sufficient, but there are likely to be some years where they can't do that," said David Molden, the deputy director general of research for the International Water Management Institute. "Looking at their water system 30 years down the line, I'm a little doubtful." Already the strain on China's agricultural system is showing. This year the government was forced to take the unprecedented step of releasing water from the Three Gorges reservoir after the worst drought in 50 years reduced parts of the Yangtze, Asia's biggest river, to a mere trickle.
In a new report with the United Nations Environment Programme, the IWMI warns that such problems could become even more widespread as harmful agricultural practices sap groundwater stores in the world's key breadbaskets--including the North China Plains, the Indian Punjab and western U.S. The report estimates that there are currently 1.6 billion people living in areas of water scarcity and this will "easily grow to 2 billion soon if we stay on the present course." And with climate change putting growing pressure on productivity and the world's population expected to top 9 billion people by 2050, IWMI forecasts that global crop yields may fall 5% to 25% short of demand over the next 40 years. "If we continue our present practices, 70% more food equates to using 70% more water," said Mr. Molden. "At some point there will be a point of reckoning. I think we're already coming close to that in all three places."
Instead, he argues for a more unified approach to managing ecosystems, incorporating links between agriculture and the wider landscape, re-using waste products and improving coordination with other sectors to improve the sustainability of food systems. And despite Beijing's goal to become self-sufficient in food, China is likely to become ever more reliant on international markets, said Mr. Molden. "China will have to rely on some kind of weather insurance in the trade system," he said.

Weaker Dollar Could Boost Asia Food Imports (Source: CME)
Any loosening of U.S. monetary policy could prove a boon for hungry Asian countries as a weaker dollar makes international food prices relatively cheaper, a senior BlackRock executive said Wednesday. Global financial markets have been on tenterhooks this week in the hope that U.S. Federal Reserve Chairman Ben Bernanke may announce a fresh bout of fiscal stimulus at this week's Jackson Hole, Wyo., economic symposium. Many expect this could take the form of a third round of quantitative easing, a measure designed to inject liquidity into the market that would put pressure on the already weak U.S. dollar. Desmond Cheung, manager of BlackRock's BGF World Agriculture Fund, said further sustained weakness in the dollar could stimulate a surge in demand for greenback-denominated agricultural products, which would become cheaper for importers buying on international markets.
"Given the continued strength in food demand growth and the decline of grains inventory in emerging markets, the strength in their local currencies versus the U.S. dollar would make grains imports cheaper," he said. Fears over the fragility of the world economy has hit equities markets hard and Cheung's fund--valued at $593.2 million as of end-June--has been no exception. BlackRock's Agriculture Fund, which invests in a range of agriculture-related equities, declined 5.7% in the second quarter 2011, underperforming its benchmark, the DAX Global Agribusiness Index, which finished the period 4.4% lower. Cheung said much of this poor performance was due to the fund's exposure to companies holding land assets in emerging markets. In response, he and fellow manager Richard Davis are "adjusting our Latin American farmland exposure" due to concerns the government may start to intervene in foreign investments, and moving into areas he sees as undervalued, such as palm oil producers.
Still, Cheung said the fundamental outlook for agribusiness remains upbeat as high grain prices allow cash-rich farmers to invest more in their crops. Among the fund's largest holdings are agrochemicals giants Potash Corp. of Saskatchewan Inc. (POT), Syngenta AG (SYT) and Agrium Inc. (AGU). "Grain prices are definitely back to the levels where they peaked in 2008, but fertilizer prices are still lower and farmers are spending less on fertilizer than they did then," he said. While many of the farm machinery companies in which the fund has holdings, such as Deere & Co. (DE) and AGCO Corp. (AGCO), have suffered among the global financial collapse as they "are classified as industrial goods companies," Cheung said he expects performance to improve in 2012.

Australia Carbon Plan To Help National Effort (Source: CME)
An Australian program to allow farmers and landholders to earn tradeable carbon credits could meaningfully contribute to national efforts to mitigate greenhouse gas emissions, according to industry officials. The Carbon Farming Initiative comes as Australia is seeking to become a major player in the global carbon market, and allows landholders to monetize carbon storage--for instance by planting trees and selling the credits earned to companies. "We feel confident that many of the potential pitfalls in this relatively new and complex area of carbon abatement have now been ironed out," National Farmers' Federation President Jock Laurie said in a statement, after the senate agreed on legislation covering the CFI Tuesday following extensive debate. Carbon Conscious Ltd. (CCF.AU) Chairman Steve Lowe said the CFI provides additional certainty for investors in carbon bio-sequestration projects, and creates a mechanism for Australia to become a leading player in the carbon economy.
The CFI is part of a suite of measures planned by the government to curb emissions and encourage clean energy investment. Canberra also plans to soon introduce legislation to parliament to implement a price on carbon and an emissions trading scheme from next July. Farmers oppose the broader plan, saying that despite containing concessions, it will raise costs and reduce the farm sector's global competitiveness. But the CFI allows farmers to explore how genuine opportunities are in the carbon-offset markets, National Farmers' Federation's General Manager of Policy Charlie McElhone said by phone. Credits can be earned by planting trees, increasing soil carbon levels through methods such as minimum-tillage cropping practices, and reducing farm emissions, for instance methane generated by livestock.
Andrew Grant, Chief Executive of CO2 Group Ltd. (COZ.AU), which manages over 17,000 hectares of carbon-sink forest planting, said the CFI is a world leader and a building block toward a fully functioning domestic carbon market. Companies will have a domestic source of carbon credits and won't have to move offshore to offset emissions, while the CFI provides a robust system requiring carbon claims to be substantiated and supported by science, he said in a statement. The CFI will also be good for the environment, financially beneficial for farmers and will encourage investment to repair land degradation, he said. "It provides a real opportunity to improve the Australian landscape, enhance farming productivity and mitigate the effects of climate change."

Irene Heads for North Carolina, New England (Source: Bloomberg)
Irene strengthened to a Category 3 major hurricane as it churned through the Bahamas today on a path forecast to take it to North Carolina’s Outer Banks and into New England. The storm, with winds of 115 miles per hour (185 kilometers per hour), may cause “devastating damage,” the National Hurricane Center said in an advisory at 11 a.m. Eastern time. Evacuations began today on the Outer Banks. Rain, beach erosion and tidal surge “will be in play from the Mid-Atlantic all the way up to New England as the storm progresses,” center director Bill Read said in a conference call today.

Drought-Baked Fields in U.S. Dimming 2012 Wheat Outlook as Prices Rebound (Source: Bloomberg)
A yearlong drought from Kansas to Texas has created the driest conditions on record for farmers preparing to plant winter wheat, dimming crop prospects for a second straight year in the U.S., the world’s largest exporter. Dry weather already has cut output of hard, red winter wheat, the most common U.S. variety, by 22 percent from 2010, government data show. If drought persists into the planting months of September and October, next year’s harvest will be even smaller, and prices on the Kansas City Board of Trade may jump 50 percent to $13 a bushel, said Dan Manternach, a wheat economist with researcher Doane Advisory Services in St. Louis. In Texas, where agriculture losses from the drought were a record $5.2 billion, soil moisture is so depleted that plants may not emerge from the ground without more rain, Texas A&M University said in a report yesterday. Kansas, Texas and Oklahoma were the biggest growers of winter wheat in 2010 and supplied 28 percent of all wheat varieties produced in the U.S.

Sugar, cocoa steady, consolidate gains
LONDON, Aug 24 (Reuters) - ICE sugar and cocoa were near unchanged in early trade, consolidating recent gains, as the grim macroeconomic outlook continued to weigh on the commodities complex.  Coffee was higher, underpinned by bullish technicals based on historical price charts.
Raw sugar futures eased taking a lead from weaker outside markets including falling stocks.

Brazil mills focus on sugar as crush slackens
SAO PAULO, Aug 23 (Reuters) - Brazil's cane mills will produce more sugar and less ethanol from what cane they have left to harvest through the end of the season due to better profits from the sweetener, analysts told Reuters.
The industry which produces sugar and ethanol biofuel from sugar cane has slashed its outlook for the cane harvest. Reduced cane output has limited the supply of both products and supported sugar prices which are hovering near 30-year highs.

Cargill sees cocoa supply meeting growing demand
LONDON, Aug 23 (Reuters) - Cargill [CARGIL.UL] expects world 2011/12 cocoa supplies will be adequate to meet demand, including the cushion of a sizable global surplus from the previous crop, the U.S. agribusiness giant said on Tuesday.
"Weather has been pretty okay and pretty normal in the main regions, but given the fact that it hasn't been outstanding weather and given the fact that we are positive with respect to demand, at best we see a balanced picture," Jos de Loor, managing director of cocoa and chocolate at Cargill, told Reuters.

Australia Newcastle coal exports jump 30 pct in week
PERTH, Aug 23 (Reuters) - Thermal coal shipments from Australia's Newcastle port jumped 30 percent to 2.446 million tonnes in the week ended Aug. 22 as the system recovered from a planned rail maintenance which reduced exports the previous week, the Newcastle Port Corporation said on its website on Tuesday.  
The vessel queue at the port fell to 7 ships and the average waiting time for vessels dipped to under 9 days.

Cnooc to Start Fields After China Oil Spills, Deal Delay Cut Output Target (Source: Bloomberg)
Cnooc Ltd. (883), China’s biggest offshore oil explorer, will start new oil fields and stabilize production after crude spills and a delay in completing an overseas acquisition forced the company to cut its annual output target. Beijing-based Cnooc reported a record half-year profit yesterday and reduced its full-year output estimate by as much as 9.3 percent because oil leaks disrupted operations at China’s biggest offshore field, called Penglai 19-3, and unit Bridas Corp. fell behind schedule for completing the acquisition of a $7.1 billion stake in Pan American Energy LLC. “Their focus in the second half is really to continue stable production and to restart the Penglai output as soon as possible,” Neil Beveridge, a senior analyst at Sanford C. Bernstein & Co. in Hong Kong, said by telephone. “Also, if they can complete the Pan American deal before the end of the year.”

Oil Advances on Signs of Economic Recovery, Shrinking U.S. Crude Stockpile (Source: Bloomberg)
Oil advanced from a two-day low in New York as investors bet that signs of economic recovery and shrinking U.S. stockpiles indicate fuel demand will increase in the world’s biggest crude-consuming nation. Futures rose as much as 0.4 percent after U.S. reports on durable-goods orders and home prices beat economists’ estimates. Energy Department data showed supplies declined 2.21 million barrels to 351.8 million last week. They were forecast to increase. Prices slipped yesterday as the dollar climbed, curbing investor demand for raw materials. Crude for October delivery gained as much as 32 cents to $85.48 a barrel in electronic trading on the New York Mercantile Exchange, and was at $85.45 at 9:42 a.m. Sydney time. The contract yesterday dropped 28 cents to $85.16, the lowest since Aug. 22. Prices are 18 percent higher the past year.

Oil stalls at $109 as eyes turn to Fed
LONDON, Aug 24 (Reuters) - Oil prices hovered near $109 a barrel on Wednesday as supply disruptions balanced against demand worries, and caution stalled investors ahead of U.S. Federal Reserve chairman Ben Bernanke's speech at the end of the week.
"There is not a lot of impetus in either direction, with the market caught between problems with supply on one side - with Libyan exports offline and probably offline for some time - and weak economic growth and slowing demand," said Tobias Merath, Head of Private Banking Commodity Research at Credit Suisse.

Crude Oil Advances in New York After U.S. Durable-Goods Orders Increase (Source: Bloomberg)
Oil rose to trade near its highest closing price in four days in New York after orders for U.S. durable goods climbed more than forecast in July, restoring confidence that economic growth will support fuel consumption. Bookings for goods meant to last at least three years rose 4 percent, the most in four months, after falling a revised 1.3 percent in June, a Commerce Department report showed today in Washington. U.S. Energy Department data today may show crude stockpiles rose 1.75 million barrels from 354 million in the seven days ended Aug. 19, according to the median of 14 analyst estimates in the Bloomberg survey. Crude for October delivery was at $86.01 a barrel, 57 cents higher at 1:35 p.m. London time on electronic trading on the New York Mercantile Exchange. It earlier fell as much as 1 percent.

GFI launches onscreen iron ore swaps trading
LONDON, Aug 23 (Reuters) - New York-based brokerage GFI  launched iron ore swaps trading on its electronic platform Energy Match Europe, it said in a statement on Tuesday.
Liquidity in the iron ore derivatives market has increased significantly in the last few months, as a growing number of participants entered this sector attracted by the large market size and potentially high returns.

Iron Ore-China steel futures rise for 2nd day, ore firm
SINGAPORE, Aug 23 (Reuters) - Shanghai rebar futures rose for a second session on Tuesday, supported by expectations a brisk construction sector will continue to prop up demand and output in top market China.
Iron ore prices were benefitting from the resilience in China's steel prices, with spot rates staying firm although some mills are exercising caution in replenishing inventories, waiting for price dips before buying.

Brazil mining investment jumps on metals demand
BRASILIA, Aug 22 (Reuters) - Surging investment in Brazil's mining sector will help the country to double iron ore output by 2015 and triple copper production in the same period, the head of Brazil's mining institute, Ibram, said on Monday.
Ibram expects Brazil's iron ore output to more than double to 772 million tonnes by 2015, from 372 million tonnes of the steel ingredient produced in 2010. That is well above the mining ministry's estimate for 585 million tonnes by 2015.

China, global steel output near record in July
LONDON, Aug 22 (Reuters) - Chinese and global steel production fell slightly from the previous month but remained near record levels in July, in what is usually a seasonally slower quarter and despite concerns that oversupply and the economic slowdown may weigh on prices.
Global crude steel production grew by 11.5 percent to  127.477 million tonnes in July, compared to the same month last year. That was not far off a record level of 129.865 million tonnes hit in April.

Cash Gold Extends Biggest Drop Since February 2010 as CME Raises Margins (Source: Bloomberg)
Spot gold declined, extending its biggest plunge since February 2010, after CME Group Inc. increased margins on trading at its Comex unit for the second time this month. Gold for immediate delivery slid as much as 1 percent to $1,742.31 an ounce before trading at $1,750.90 at 7:12 a.m. in Singapore. The price slumped 3.8 percent yesterday, the most since Feb. 4 last year. Futures fell 0.3 percent to $1,751.70 after plunging 5.6 percent yesterday, the most since March 2008. The minimum cash deposit for borrowing from brokers to trade futures will jump 27 percent to $9,450 per 100-ounce contract in the speculative Tier 1 category at the close of trading today, CME said. On Aug. 11, the increase was 22 percent to $7,425. The cost of one contract after yesterday’s close was $175,730. The maintenance margin increases to $7,000 from $5,500.

Gold Margins Raised 27% on CME’s Comex After Biggest Price Drop Since 2008 (Source: Bloomberg)
CME Group Inc. raised the margin requirements on gold trading at its Comex unit for the second time this month, after prices surged to a record above $1,900 an ounce and then plunged today by the most since March 2008. The minimum cash deposit for borrowing from brokers to trade gold futures will rise 27 percent to $9,450 per 100-ounce contract in the speculative Tier 1 category at the close of trading tomorrow, Chicago-based CME said in a statement. On Aug. 11, the increase by the exchange was 22 percent to $7,425. The cost of one contract after today’s close was $175,730. The maintenance margin will rise to $7,000 from $5,500. Comex is making it more expensive for speculators to trade the metal as open interest for gold options climbed to a record 1.263 million contracts on Aug. 18 and prices slumped more than 7 percent in two days, erasing the gain of the past two weeks that sent the metal to a record $1,917.90 yesterday.

China COSCO seeks to reassure shipowners over unpaid bills
SINGAPORE/HONG KONG, Aug 24 (Reuters) - China COSCO Holdings  , the country's top shipping conglomerate, sought to reassure investors that negotiations with shipowners over unpaid bills would be resolved and its business remained strong.
COSCO, operator of the world's largest dry bulk cargo fleet, is in talks with several shipowners to prolong payments and reduce costs on chartered vessels following a sharp downturn in the freight market, two company officials said.

Baltic index at near 5-month high, demand firm
LONDON, Aug 23 (Reuters) - The Baltic Exchange's main sea freight index, which tracks rates to ship dry commodities, rose to its highest in nearly five months on Tuesday driven by further iron ore cargo bookings to China on the larger capesize vessels.  
Nevertheless, brokers said growing world financial turmoil, tighter bank financing and rapid fleet growth would keep dry bulk freight rates under pressure in the coming months.