20111012 1818 FCPO EOD Daily Chart Study.

FCPO closed : 2864, changed : +63 points, volume : higher.
Bollinger band reading : pullback correction downside biased.
MACD Histrogram : recovering, seller closing position and buyer testing market.
Support : 2850, 2800, 2770, 2750 level.
Resistance : 2900, 2920, 2950, 2970 level.
Comment :
FCPO closed recorded substantial gains with better volume participation while overnight soy oil closed recorded huge gain and currently between gain and losses while crude oil also moving in between positive and negative zone.
Overnight soy oil surged, news on China started buying soybean and soy oil for reserve and improving exports outlook pushed FCPO price testing higher resistance level. Having said that, markets still awaits tonight USDA forecast report for further market direction.
Daily chart formed an up doji bar candle closed nearer to middle Bollinger band after market opened gap up, traded side way range bound through out the day followed last hour climb before easing little lower to closed off the high of the day.
Market still likely to have pullback correction within a 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.

20111012 1744 FKLI EOD Daily Chart Study.

FKLI closed : 1438.5, changed : +33 points, volume : higher.
Bollinger band reading : side way range bound.
MACD Histrogram : rising, buyer having exposure.
Support : 1425, 1420, 1400, 1395 level.
Resistance : 1440, 1445, 1458, 1470 level.
Comment :
FKLI rallied closed recorded huge gains with better volume transacted doing 10 points premium compare to cash market that also closed recorded significant gains. Overnight U.S. markets closed mixed and Asia markets traded mostly higher while European markets currently trading in positive territory.
Speculation on China will boost support for the equity market after valuations dropped to record-low levels resulted Asia and European markets to surge higher triggering short covering activities.
Daily chart formed a huge wide range up bar candle closed little above upper Bollinger band level after market opened little lower, climb upwards all the day towards the end with small intervals retracement to closed near the high of the day.
Chart reading turned to suggesting a side way range bound 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 quick cut loss and profit target.

20111012 1720 Regional Markets EOD Daily Chart Study.

 DJIA chart reading : side way range bound.

 Hang Seng chart reading :  pullback correction little downside biased.

KLCI chart reading : pullback correction little downside biased.

20111012 1633 Breaking News.

Reuters :
China has bought 700,000 to 800,000 tonnes of U.S. soybeans for state reserves.
China has bought 100,000 to 120,000 tonnes of Brazil soyoil for state reserves.

20111012 1619 Global Market & Commodities Related News.

Asia shares edge up on China bounce, euro stalls
TOKYO, Oct 12 (Reuters) - A rebound in Hong Kong and Shanghai shares helped lift most Asian stocks into positive territory, but concerns that Europe's debt crisis has hurt confidence in the global economy and is weighing on corporate earnings limited gains.
"The broader trend is dictated by the problems in Europe, and Slovakia's rejection was negative to sentiment, as beefing up the fund is vital in providing a sense of security," said Hirokazu Yuihama, senior strategist at Daiwa Capital Markets.

China’s Stocks Rise Most in Year on Increased Government Support Prospects (Bloomberg)
China’s stocks rallied, spurring the biggest gain for the benchmark index in a year, on speculation the government is seeking to bolster the share market after valuations dropped to record low levels. Haitong Securities Co. led a rally for brokerages after Xinhua News Agency reported regulators approved cross-border exchange-traded funds. China Minsheng Banking Corp. surged the most in seven weeks as banks extended yesterday’s rally after Central Huijin Investment Ltd. began buying shares of lenders. Trainmakers CSR Corp. and China CNR Corp. rose more than 4 percent after the 21st Century Business Herald reported their parent companies may get cash injections from the government. The Shanghai Composite Index advanced 71 points, or 3 percent, to 2,420 at the close, the most since Oct. 15, 2010. The CSI 300 Index gained 3.6 percent to 2,644.76.

Europe Stocks Drop for Second Day on Slovakia (Bloomberg)
European stocks fell for a second day as political wrangling in Slovakia delayed the approval of the region’s overhauled bailout fund and Alcoa Inc. kicked off the American earnings season with profit that missed estimates. Asian shares gained and U.S. index futures declined. YIT Oyj, Finland’s biggest builder, slumped 7.5 percent after cutting its profit outlook. Fresnillo Plc (FRES), the world’s largest primary silver producer, slid 5.3 percent after lowering its full-year output target. ASML Holding NV (ASML) climbed 2.3 percent after Europe’s biggest semiconductor-equipment maker reported income that beat projections. The Stoxx Europe 600 Index dropped 0.8 percent to 233.42 at 8:22 a.m. in London. The gauge has tumbled 20 percent from its high on Feb. 17 amid concern that the sovereign debt crisis in Europe will spread from Greece to the larger economies of Italy and Spain. The MSCI Asia Pacific Index rose 0.2 percent today, while Standard & Poor’s 500 Index futures slipped 0.3 percent.

Japan manufacturing may emigrate-JFE Steel
PARIS, Oct 11 (Reuters) - Japan's manufacturing industry will have to shift production overseas as their margins are squeezed by a strong yen and higher costs than elsewhere in Asia, Eiji Hayashida, CEO and President of JFE Steel, told Reuters.
He said Japanese companies suffered from high corporate income tax, rigid employment regulation, an unfavourable exchange rate, aggressive targets for CO2 emission cuts, the slow progress of free trade agreement in Asia and high energy costs now that some nuclear energy has been cut.

Japan Aug machinery orders jump, outlook still dim
TOKYO, Oct 12 (Reuters) - Japan's core machinery orders jumped 11 percent in August, scoring their biggest gain in a year in a sign that a post-quake recovery continued to buttress the world's No. 3 economy in the face of a global slowdown and a strong yen.
The figure, a leading indicator of capital expenditure, may act as some solace to Japanese policymakers who are wary that Europe's debt crisis, the U.S. slowdown and the yen's rise may stall recovery from the March 11 earthquake and tsunami.

FOREX - Euro falls after Alcoa, Slovak vote
TOKYO, Oct 12 (Reuters) - The euro fell broadly on Wednesday, reversing its recent corrective rally made on hopes for a solution to the debt crisis, with fragile risk sentiment soured after the Slovak parliament rejected a plan to expand the euro zone rescue fund.
Tokyo exporters took the opportunity to sell the euro against the yen after the common currency had gained nearly 4 percent in the week, piling pressure on euro/dollar. Option barriers reported at 105 yen and $1.37 in the respective pairs also helped halt the recent rally.

US soy, wheat dip after rally, corn extends gains
SINGAPORE, Oct 12 (Reuters) - U.S. soybeans fell 0.7 percent , while wheat slipped 0.5 percent, trimming gains after last session's biggest rally in more than a year amid concerns over the euro zone debt crisis.
"It looks like profit-taking after gains last night or just rebalancing prior to the USDA report as no one wants to take a new position ahead of a report that could result in a limit down or limit up," said Adam Davis, a senior commodity analyst at Merricks Capital in Melbourne.

Brazil 11/12 CS sugar output down 4 pct - Unica
SAO PAULO, Oct 11 (Reuters) - Sugar output from Brazil's center-south cane crop from the start of the season through the end of September was down 4 percent from a year earlier at 26 million tonnes, cane industry association Unica said on Tuesday.
But dry weather in the last two weeks of September allowed mills to boost production. Sugar output jumped 44 percent from the same period in 2010 when excess rains slowed harvest.

Rains in Argentina seen jump-starting corn planting
BUENOS AIRES, Oct 11 (Reuters) - Rains in Argentina's central agricultural areas over recent days should continue over the next few weeks, and have already helped restart corn plantings that had been slowed by dryness in September, a weather specialist said on Tuesday.
Argentina is the world's No. 2 corn supplier after the United States, gathering a record harvest of 22.9 million tonnes in the 2010/11 crop season, according to the government's most recent estimate.

French wheat sales to N.Africa seen lower in 11/12
ALGIERS, Oct 11 (Reuters) - France will almost halve soft wheat sales to Morocco in the 2011/2012 season because of lower output in France, the French grain export body said on Tuesday.
Jean-Pierre Langlois-Berthelot, chairman of France Export Cereales, also told Reuters that French soft wheat exports to Morocco's north African neighbour Algeria would slightly decline during the 2011/12 campaign.

Floods in Pakistan damage 3.7 pct of total crop area- FAO
MILAN, Oct 11 (Reuters) - Floods in Pakistan have damaged at least 880,000 hectares of standing crops, including rice, maize, cotton, sugar cane, fruit orchards and vegetables, which represent about 3.7 percent of total national crop area, the United Nations' food agency said on Tuesday, citing preliminary official estimates.
"Damage to the current paddy crop is moderate and is estimated by FAO and Pakistan's space agency (SUPARCO), as of 20 September, at about 252,700 tonnes, or 2.5 percent of the normal national production," the UN's Food and Agriculture Organisation (FAO) said in an update on the flood situation in Pakistan.

Firm price boosts Brazil cotton output, exports  
BRASILIA, Oct 11 (Reuters) - Brazil will play a bigger role in the global cotton supply in the coming years with a dramatic surge in output and rising exports of the fiber to its top trade partner China, a sector official told Reuters.
The Latin American country's production of the fiber shot up to 1.96 million tonnes in 2011 from 1.2 million tonnes the year before, according to official data. Recent heavy capital investments signal these higher levels could be here to stay.

Oil below $111 on demand forecast cut, euro zone woes
SINGAPORE, Oct 12 (Reuters) - Brent crude fell, snapping five days of gains, after OPEC cut its global oil demand forecast and plans for greater powers for a euro zone bailout fund hit a snag, rattling investor confidence.
"We have seen quite a good bounce and traders are squaring positions ahead of Chinese data due on Friday," said Michael McCarthy, chief markets strategist at CMC Markets.

China sets ambitious shale gas output targets-paper
BEIJING, Oct 12 (Reuters) - China plans to produce 6.5 billion cubic metres (bcm) of shale gas by 2015 and aims for 80 bcm by 2020, an official with top Chinese oil and gas producer China National Petroleum Corporation (CNPC) was quoted as saying by Chinese media.
The plan, mainly compiled by the National Energy Administration, will likely be disclosed to the public in the near future, the China Securities Journal said in a report on its website.

Libya says oil output to hit 1 million bpd
TRIPOLI, Oct 11 (Reuters) - Production from a Libyan oil field will restart within days and the country should be able to pump 1 million barrels per day (bpd) within a year, the interim oil and finance minister said on Tuesday.
In an interview with Reuters, Ali Tarhouni said he had received a phone call the previous evening saying the huge El Sharara oil field operated by Spanish firm Repsol was ready to restart and he expected it to resume pumping within days. It produces 200,000 bpd.

World oil demand may be stronger than expected-IEA
LONDON, Oct 11 (Reuters) - Global oil demand may be more robust than expected, even with a slowdown in economic growth in the United States and Europe, the chief economist of the International Energy Agency (IEA) said on Tuesday.
Fatih Birol told Reuters on the sidelines of an oil industry conference that fuel consumption in Asia and in the Middle East was holding up fairly well.

Next OPEC meeting to be more harmonious
LONDON, Oct 11 (Reuters) - OPEC's secretary-general said on Tuesday he expected the group to reach a consensus on output policy when it meets in December, after it rattled oil markets when its last meeting ended in acrimony and without a deal.  
Abdullah al-Badri also told Reuters Insider television that oil prices at or over $100 a barrel were "reasonable," suggesting the Organization of the Petroleum Exporting Countries will not rush to adjust supplies.

Alcoa sees strong aluminum use, despite price drop
NEW YORK, Oct 11 (Reuters) - Alcoa Inc  expects global demand for aluminum to hold up into the fourth quarter despite a falling metal price and fears the global economy may slip back into recession.
"Alcoa remains a confident company in a very nervous world," said Chief Executive Officer Klaus Kleinfeld on Tuesday, adding that he thought the world was almost worrying itself into another recession.

Alcoa profit hurt by slowdown, recession fears
Oct 11 (Reuters) - Alcoa Inc , the largest U.S. aluminum producer, said an economic slowdown hurt demand and knocked prices for the metal lower, denting its third-quarter profit and sending its shares down in after-hours trading.
CEO Klaus Kleinfeld warned of weak economic conditions through the year, particularly in Europe, "as confidence in the global recovery faded."

China bank to invest $1.5 bln in Russian smelter-VEB
BEIJING, Oct 11 (Reuters) - Russian state bank VEB and China Development Bank (CDB) will on Tuesday sign a deal under which CDB will invest $1.5 billion in building the first stage of UC RUSAL's  750,000-tonne Taishet aluminium smelter, VEB head Vladimir Dmitriev said.
RUSAL, the world's largest aluminium producer, confirmed that an agreement on project financing had been reached but provided no further details ahead of a signing ceremony later during Prime Minister Vladimir Putin's visit to Beijing.

First Uranium sales rise quarter-on-quarter
Oct 11 (Reuters) - First Uranium  said on Tuesday that its second-quarter gold sales rose 17.7 percent from the prior quarter and it is maintaining its full year outlook despite problems at both its projects in South Africa.
Gold sales in the second quarter, ended Sept. 30, rose to 40,529 ounces from 34,438 ounces in its first quarter. In the same period, uranium production rose 76.8 percent to 36,006 pounds from 20,361 pounds.

European tin premiums higher on tight market
LONDON, Oct 11 (Reuters) - Premiums for physical tin in Europe rose this week, supported by market tightness but concerns about the demand outlook for metals in light of a slowdown in the global economy could weigh, traders said.
Traders quoted premiums for Chinese material  -- paid over the London Metal Exchange (LME) cash price  -- at $700-750 a tonne versus $600-700 quoted previously.

Indonesia tinplate maker sees higher 2012 capacity
JAKARTA, Oct 11 (Reuters) - Output at Indonesia's only tinplate producer will slip almost 10 percent this year as improvement works begin this month, in a project that will help ramp up capacity for 2012 by nearly a quarter, a director at the firm said on Tuesday.
PT Pelat Timah Nusantara Tbk , also known as PT Latinusa Tbk, produced 110,000 tonnes of tinplate last year and this is forecast to fall to 100,000 tonnes in 2011, Hideyuki Iwasaki, deputy of finance director, told Reuters.

Europe's steel appetite to slow next year
PARIS, Oct 11 (Reuters) - European steel consumption growth will slow down in 2012 due a decline in manufacturing, Gordon Moffat, director general of the European steel producers association Eurofer said on Tuesday.
"We anticipate a consumption levels to grow by 6 percent this year and by less next year, probably 2 or 2.5 percent because of the decline in manufacturing," Moffat told Reuters in an interview.

Copper lifted by gains in Shanghai equities
SHANGHAI, Oct 12 (Reuters) - Copper prices rose lifted by steep gains in Shanghai equities, short-covering and rapid restocking by Chinese consumers, but concerns about the global economy continued to weigh on the market.
"Shanghai equities are performing well at the moment and giving base metals a lift. If LME copper doesn't breach $6,800, we should remain in a technical rebound stage in the short-term," Shanghai Dongzheng Futures trader Du Xiao Hua said.

PT Timah resumes tin ingot exports again
JAKARTA, Oct 11 (Reuters) - Indonesia's state-owned PT Timah , the world's largest integrated tin miner, has started to again export tin ingot -- breaking a stoppage agreed by smelters last month, an official said on Tuesday.
Since Oct. 1, Indonesian tin smelters in Bangka island, have put in place a self-imposed export ban, with the aim of pushing prices above $25,000 a tonne.

METALS - Copper lifted by gains in Shanghai equities
SHANGHAI, Oct 12 (Reuters) - Copper prices rose on Wednesday lifted by steep gains in Shanghai equities, short-covering and rapid restocking by Chinese consumers, but concerns about the global economy continued to weigh on the market.
Investors were also cautious ahead of data due out this week which is likely to show China's copper and iron ore imports have softened, indicating a slowdown in the world's second largest economy and biggest industrial metals consumer.

PRECIOUS - Spot gold flat; Asia's physical demand underpins
SINGAPORE, Oct 12 (Reuters) - Spot gold traded flat on Wednesday, as investors waited for cues from further developments in the euro zone's debt crisis, and robust physical demand in Asia underpinned the sentiment.
Slovakia's parliament voted against the expansion of the euro zone's rescue fund, but the move is unlikely to dampen confidence the euro zone will come up with solutions to its debt crisis.

Spot gold flat; Asia's physical demand underpins
SINGAPORE, Oct 12 (Reuters) - Spot gold traded flat , as investors waited for cues from further developments in the euro zone's debt crisis, and robust physical demand in Asia underpinned the sentiment.
"Slovakia is not a big enough player to get in the way," said a Singapore-based trader.

20111012 1102 Global Market & Commodities Related News.

GLOBAL MARKETS-Stocks mixed, commods jump before Slovak EU vote
NEW YORK, Oct 11 (Reuters) - Stocks ended a volatile session with slight gains and commodities extended their rally on Tuesday as investors held back from big bets ahead of U.S. earnings reports, as well as on concerns about the euro zone debt crisis.
"Earnings are always important but even more so here after several quarters of solid earnings across many industry sectors. I think investors are going to want to see that continuing or solidifying itself," said Michael Cuggino, president and portfolio manager of Permanent Portfolio Funds in San Francisco.

COMMODITIES-Grains jump before US report, weak shares hit metals
NEW YORK, Oct 11 (Reuters) - Grains surged on Tuesday on fears that U.S. crop data will show alarmingly tight supplies, and energy futures rebounded from early selling even as weak equities scared commodity buyers away from metals.
"There is a lot of short covering before tomorrow's reports," said Paul Haugens, vice president for Newedge USA.

Libya says it will restart oil field within days
TRIPOLI, Oct 11 (Reuters) - Production from a Libyan oil field will restart within days and the country should be able to pump 1 million barrels per day (bpd) within a year, the interim oil and finance minister said on Tuesday.
In an interview with Reuters, Ali Tarhouni said he had received a phone call the previous evening saying the huge El Sharara oil field operated by Spanish firm Repsol  was ready to restart and he expected it to resume pumping within days. It produces 200,000 bpd.

Total sees no huge cost increases in 2012
ABU DHABI, Oct 11 (Reuters) - Oil company Total SA  is expecting to keep a lid on cost pressures next year as it looks to increase investment in exploration and production, an executive said on Tuesday.
"We do not expect huge cost increases, at least not from companies we deal with in the western hemisphere, in 2012," Peter Herbel, Total's senior vice president, told Reuters on the sidelines of an economic forum in the UAE capital.

Next OPEC meeting to be more harmonious
LONDON, Oct 11 (Reuters) - OPEC's secretary-general said on Tuesday he expected the group to reach a consensus on output policy when it meets in December, after it rattled oil markets when its last meeting ended in acrimony and without a deal.  
Abdullah al-Badri also told Reuters Insider television that oil prices at or over $100 a barrel were "reasonable," suggesting the Organization of the Petroleum Exporting Countries will not rush to adjust supplies.

World oil demand may be stronger than expected-IEA
LONDON, Oct 11 (Reuters) - Global oil demand may be more robust than expected, even with a slowdown in economic growth in the United States and Europe, the chief economist of the International Energy Agency (IEA) said on Tuesday.
Fatih Birol told Reuters on the sidelines of an oil industry conference that fuel consumption in Asia and in the Middle East was holding up fairly well.
 
Oil price falls 2.5 percent after Reuters reports Saudi offering Asian refiners more crude
Body Text: U.S. crude fell around 2.5 percent after Reuters was first to report that top exporter Saudi Arabia had offered to supply more crude to Asian refiners for loading in July. The news provided the first hard evidence from consumers of Saudi crude that the kingdom was making good on its promise to boost output to meet demand despite its failure to convince other members of OPEC to make a coordinated increase in supply.

Brent up a 5th day, Iranian plot supports
NEW YORK, Oct 11 (Reuters) - Brent crude oil futures rose on Tuesday for the fifth straight session, on news of an alleged Iranian plot to assassinate Saudi Arabia's ambassador in the United States.
"This is the kind of thing that can move the market like nothing else," said Richard Ilczyszyn, senior market strategist at MF Global in Chicago, noting oil markets carried a strong risk premium for much of the first half of the year due to the Arab Spring.

Natgas ends higher for second day as shorts cover
NEW YORK, Oct 11 (Reuters) - U.S. natural gas futures mostly ended higher on Tuesday for a second day, driven by short covering, particularly in front month contracts, despite mild weather and ongoing concerns about growing supplies.
"People have been short this market but may be covering now. They're counting the days and know that winter isn't far off," a Midwest-based trader said.

EURO COAL-Prices stable, China, S.Korea buy capes
LONDON, Oct 11 (Reuters) - Prompt physical coal prices were barely changed on Tuesday, with     volatility in other markets, due to worries over the health of Europe's economy, having no impact on coal prices.
"Very little happened in the market today, all the action has been elsewhere and coal has just ticked along," one European trader said.

20111012 0953 Local & Global Economic Related News.

Malaysia: Production rises on manufacturing, electricity output
Malaysia’s industrial production rose in August as manufacturing and electricity output climbed, a rebound that may be short-lived as a weakening global economy curbs demand for goods. Production at factories, utilities and mines gained 3% from a year earlier after falling a revised 0.5% in July, the statistics department said. That compares with the median estimate for a 0.4% increase in a Bloomberg News survey of 16 economists. (Bloomberg)

Industrial production rose 3% yoy in Aug (-0.5% in Jul), due to the increases  in manufacturing (+4.8%) and electricity sectors (+1.4%). However, the mining  production fell by 1.4%. On a mom basis, the factory output increased 2.6%  (-0.5% in Jul). In Jan-Aug 11, it recorded a 0.6% growth. Economists had  projected the industrial production would decline by 0.3% yoy in Aug.  (Department of Statistics, BT)

The manufacturing sales rose 10.8% yoy to RM49.8bn (+9.5% in Jul). On a  mom basis, the sales value increased by 0.2% (+0.5% in Jul).  In Jan-Aug 11, it  recorded a growth of 10.6% to RM390.2bn. Total employees engaged in the manufacturing sector rose 2.7% yoy to  1m persons (+3.5% in Jul). Salaries & wages paid in Aug soared by 5.4% to RM2.3bn (+9.5% to  RM2.4bn in Jul).  Average salaries & wages paid per employee increased by 2.6% yoy to  RM2,288 (+5.8% to RM2,348 in Jul). Productivity rose by 7.9% yoy to RM49,175 (+6.1% to RM48,707 in Jul).  (Department of Statistics)

The Agriculture and Agro-based Industry Ministry has assured that the supply  of rice in the country remains stable amid massive flooding in Thailand. Its  minister, Datuk Seri Noh Omar has urged the public not to resort to panic  buying  or speculation as the flood situation had not affected Malaysia  drastically.  There was enough stock of rice in the country as the next future contract  for 307,000 tonnes of rice per year from Thailand had been signed and  the government had been steadily stockpiling rice.  "We have already got half the supply while the rest is safely kept in  Bangkok, which is not affected by floods, and will be bring it in soon,"  he noted. (Bernama)

All applications for the  Treasury housing loans have to be made online,  effective 1 Jan next year, the Treasury Housing Loan Division secretary, Datuk  Shuib Md Yusop said. The Housing Loan Division (BPP), he said, had been  given three months to shift to the online system. BPP, he said, received almost  3,000 loan applications every month, including about 300 from Sabah.  (Bernama)

Malaysia will exchange documents for  three major deals at the  8th  China-Asean Expo (CAEXPO 2011) in Nanning, China, from 21 to 26 Oct.  Malaysia External Trade Development Corporation (Matrade) CEO Dr Wong  Lai Sum said the ceremony will be held at the Malaysia Pavilion where 132  Malaysian companies, 16 government agencies and three associations will have  their booths. Wong said that in terms of product sales at this year's exhibition,  Matrade's estimate was RM100m. (Bernama)

The government has urged the  private sector to be brave in participating in  venture capital and drive Malaysia into a knowledge-based high-income  economy. Deputy Finance Minister Datuk Dr Awang Adek Hussin said venture  capital is important in encouraging innovation, new technology and ideas, that  can contribute to a knowledge-based economy. Last year, the amount of venture  capital in Malaysia was worth RM6bn with 51.4% of the funding coming from  government. The industry is expected to grow by 16% annually. (Bernama)

The government is confident of achieving its targeted 4.7%  budget deficit in  2012 on the back of prudent management of the country’s fiscal account, said  Deputy Finance Minister Datuk Dr Awang Adek Hussin. He said the  government very rarely exceeded the targeted deficit in the past. He added that  as long as Malaysia does not overspend, the deficit target is attainable.  (Financial Daily) 

Japan's  current account surplus shrank 64.3% yoy in Aug, the sixth  straight monthly fall as higher energy import costs overshadowed a  small gain  in exports, data showed. The surplus in the current account stood at ¥407.5bn  (US$5.3bn) in Aug before seasonal adjustment, finance ministry data showed.  Economists expected a ¥446.9bn surplus. (AFP)

Japan saw a  trade deficit of ¥694.7bn in Aug, from a surplus of ¥170.6bn a  year earlier. Exports rose 4.0% yoy in Aug, but imports jumped 22.4%. (AFP)

Japanese consumer confidence was 38.6 in Sep, up from 37.0 in Aug. A  reading below 50 suggests consumer pessimism. (Reuters)

European Union and  International Monetary Fund officials indicated  Greece will get an €8bn (US$11bn) loan next month under a €110bn bailout, as  European leaders move to reopen talks on a new package that may mean deeper  writedowns on Greek debt. (Bloomberg)

European Central Bank President Jean-Claude Trichet said Europe’s debt  crisis now threatens the region’s financial system as officials race to put  together a new plan to end the turmoil. ―Sovereign stress has moved from  smaller economies to some of the larger countries. The crisis is systemic and  must be tackled decisively.‖ (Bloomberg)

Indonesia’s central bank unexpectedly cut its benchmark  interest rate by  25bps to 6.5%. Economists expected no change. (Bloomberg)

Indonesia's domestic car sales rose 62.4% yoy in Sep. Domestic car sales  volumes reached 79,835 units from 49,147 units in Sep last year, when sales  were the lowest in 2010, according to data from Indonesia's Automotive  Manufacturers Association. (Reuters)

Indonesia's domestic motorcycle sales, rose 50.6% yoy to 721,764 units in  Sep, according to data from Indonesia's Motorcycle Industry Association (AISI).  (Reuters)

Foreign direct investment (FDI) in China rose 15.6% yoy to US$14.03bn in  Sep. FDI increased 17.4% in 2010 to US$105.7bn. (AFP)

Thailand’s Cabinet approved a proposal to reduce the corporate tax rate to  23%, Deputy Finance Minister Boonsong Teriyapirom said. (Bloomberg)

Thailand may set aside THB80bn (US$2.6bn) to help the country recover from  recent flooding. Thailand’s government maintained its  budget deficit and  spending targets for the fiscal year started 1 Oct, and asked state agencies to  set aside 10% of their investment and operating budgets to aid the economy.  (Bloomberg)

In the Philippines, loan growth net of reverse repurchase (RRP) deals was  1.4% mom in Aug (1.4% in Jul) and 19.8% yoy (19.1% in Jul). (Reuters)

Thailand will need to cut its forecast for economic growth this year because  of the  impact of nationwide flooding, Thai Prime Minister Yingluck  Shinawatra said, without giving any figures. Flooding in Ayutthaya province has  caused as much as THB60bn of damage to the Rojana Industrial Park, Yingluck  said. (Bloomberg)

Thailand’s government maintained its  budget deficit and spending targets  for the fiscal year started Oct. 1, and asked state agencies to set aside money to  help the economy recover from nationwide floods. State agencies have been  asked to set aside 10% of their investment and operating budgets to help aid the  economy once the floods subside. (Bloomberg)
 

Indonesia/Philippine: Asia girds for risks with Indonesia rate cut, Philippine package
Asian policy makers are bolstering efforts to protect their economies from weakening global growth, as Indonesia unexpectedly cut interest rates and the Philippines prepares to unveil a stimulus plan this week. Bank Indonesia lowered its reference rate by a quarter of a percentage point to 6.5% yesterday, defying the predictions of all 15 economists surveyed by Bloomberg News. Philippine President Benigno Aquino is due to announce details of a PHP72.1bn (USD1.7bn) spending package today, while Singapore’s central bank is forecast by economists to say this week that it will slow or end its currency appreciation. Emerging-market nations have turned from fighting inflation to supporting growth as a struggling US recovery and deepening European crisis threaten the global economy. Brazil, Turkey, Russia and Pakistan have cut borrowing costs in 2011, while Asian countries have refrained from further rate increases in recent weeks. (Bloomberg)

ECB: said to oppose German push to alter July 21 rescue accord
The European Central Bank opposes Germany’s push to rewrite the euro area’s 12 week-old-rescue plan as leaders prepare the ground for a potential Greek default, a central bank official said. ECB policy makers inserted a line into last week’s monthly policy statement that was aimed at Germany’s push to impose bigger haircuts on European banks, the official said under condition of anonymity. The sentence, read out by President Jean-Claude Trichet at a press conference in Berlin, urges “all euro area governments to fully implement all aspects” of the 21 July summit agreement. German and French leaders are moving beyond the July accord, which targets bank losses of 21% on Greek debt, amid rising pressure to stem a crisis that threatens the world economy. Chancellor Angela Merkel and President Nicolas Sarkozy yesterday pledged to provide a blueprint for recapitalizing European banks that would help them survive any Greek default. (Bloomberg)

US: Senate blocks Obama’s USD447bn plan to boost job creation
Opponents of President Barack Obama’s USD447bn jobs plan had enough votes to block the measure in the Senate, with at least one Democrat joining Republicans to derail his prime proposal to help turn around the struggling economy. The tally on the test vote wasn’t completed by early evening as the roll call remained open for a senator who was on her way back to Washington to vote. There were more than 40 votes against permitting debate on the measure, effectively shelving it. The broad plan includes cuts in payroll taxes for workers and employers and provides new funding for roads, bridges and other infrastructure. (Bloomberg)

US: Panel proposes criteria for systemically risky firms
The US Financial Stability Oversight Council approved the draft of a rule setting standards for leverage and debt that will help the panel determine which non-bank financial firms require Federal Reserve scrutiny. Regulators will evaluate companies with more than USD50bn in assets if they meet any one or more of the following thresholds, the council said: A 15-to-1 leverage ratio; USD3.5bn in derivatives liabilities; USD20bn of outstanding loans borrowed and bonds issued; USD30bn in gross notional credit-default swaps outstanding; or a 10% ratio of short-term debt to assets. The council, headed by Treasury Secretary Timothy F. Geithner, approved the criteria to help identify firms that may be systemically important. Firms that meet those thresholds aren’t necessarily designated for Fed supervision. The proposal is open to a 60-day public comment period and can be changed. (Bloomberg)

US: Employment index declines for second straight month
A measure of job prospects in the US fell in September for a second month, indicating the labor market will struggle to improve through year-end. The Conference Board’s Employment Trends Index declined 0.4%, the most in five months, to 100.95 from the prior month’s revised reading of 101.37, the New York-based private research group said. The measure was up 4.4% from September 2010. Figures follow a Labor Department report last week that showed payrolls rose by a more-than-forecast 103,000 workers in September while the unemployment rate held at 9.1%. Even faster job growth may be needed to reduce the jobless rate, keep consumers spending and boost the economy. (Bloomberg)

20111012 0952 Malaysia Corporate Related News.

No mandatory GO for E&O from Sime Darby
Sime Darby will not be required to extend a mandatory general offer for E&O following Sime Darby’s acquisition of a 30% stake in the latter in late August. The Securities Commission said it found no collusion between Sime Darby and E&O’s managing director Datuk Terry Tham Ka Hon with regard to the deal. The acquisition of the remaining 70% of E&O at RM2.30 per share would have cost Sime Daeby an additional RM1.8bn on top of the RM766m it paid for the 30% block earlier. (Financial Daily)

Sunway secures RM309m job in Iskandar
Sunway has secured a RM308.9m job for the construction of an integrated media studio in Iskandar Malaysia, Johor. The job from Iskandar Malaysia Studios SB is for the construction of Pinewood Iskandar Malaysia Studios and is targeted to be fully completed by 10 May 2013. Sunway has also received a tender award from Urban Redevelopment Authority of Singapore for a land parcel at Jalan Loyang Besar/Pasir Ris Rise for a 99-year lease-term equivalent to about RM345m. The project in Singapore is expected to be completed within 60 months. (Malaysian Reserve) Please see accompanying report.

KNM secures USD200m EPCC for Sri Lankan plant
KNM has secured a conditional engineering, procurement, construction and commissioning (EPCC) award of a waste-to-energy plant in Karadiyana, Sri Lanka worth about USD200m (RM638m) from Octagon Consolidated. The plant has a capacity to process up to 1,000 tonnes per day of municipal waste to generate a minimum of 40MW of gross electrical energy. The project involves generating renewable energy and is to be implemented under a public private partnership between Octagon and the Waste Management Authority of Western Province. (Malaysian Reserve) Please see accompanying report.

Thai floods hit Malaysian firms
Malaysian companies that have operations in Thailand are not spared from the country’s worst flood in decades. The flood has prompted some public listed companies in Malaysia to announce the shutdown of their operations in Thailand. Eng Tek, F&N, Notion VTec and D’nounce Technology had succumbed to the flood, with the extent of damage yet to be determined. All four companies’ operations in Ayutthaya had been temporarily shut down. (Financial Daily) Please see accompanying report.

KUB nets RM269m airport deal
KUB has won a RM268.8m contract from Malaysia Airports Holdings to develop parts of the new low cost air terminal or KLIA2 in Sepang. KUB will construct a new 3.96km third runway, parallel taxiways, connecting taxiways and other associated works in 16 months. (Malaysian Reserve)

AirAsia’s venture in Vietnam fails to take off
AirAsia will not proceed with the proposed joint-venture with Vietjet Aviation Joint Stock Co due to failure to meet some conditions under the JV agreements. The failings included not getting approvals for Vietjet to employ the AirAsia brand across its commercial operations, which would have been fundamental for the successful conduct of the business model for the intended JV. (Malaysian Reserve)

UOA Development  yesterday announced the acquisition of 9.8 acres of  freehold land in Kepong, Kuala Lumpur, for RM72.8m. UOA Dev is proposing  to develop the land into a residential development and is expected to commence  in the year 2012. (BMSB)

The government’s planning unit Pemandu and the Economic Planning Unit are  teaming with several industry players to address to  Tenaga's "very severe"  delays in fuel supply, said Tenaga chief executive officer and president Datuk  Seri Che Khalib Mohamad Noh.   He said that the decision to form the task force was made on Oct 10, and  Pemandu were currently meeting with industry players such as  Petronas so that a quick decision could be reached. "Without gas it's  very risky for the power sector to look forward.  If we don't have gas, we need to use alternative fuel  which costs five  times more. We need to look into whether we can get enough supplies of  gas or not, and if we cannot and have to use alternative fuel, who pays?  Tenaga, Petronas?" he added.  He said that a decision would be  reached "before the end of the month", adding that the security and  supply of power sector was at risk. (Financial daily)

The government has set up a task force to review the gas shortage faced by  Tenaga Nasional (TNB). TNB president and CEO Datuk Seri Che Khalib  Mohd Noh said the Performance Management and Delivery Unit (Pemandu)  will lead the task force, together with the Economic Planning Unit (EPU). "The  decision to set up this task force was made yesterday, Pemandu will meet with  Petronas, TNB and the other industry players. We need a quick decision,  because if this matter remains unresolved, the security of supply for the power  sector will be more and more at risk. We hope they can come up with a solution  before the end of this month," he said. (Bernama, Malaysian Reserve)

Energy  Commission (EC) chairman, Tan Sri Ahmad Tajuddin Ali said the  country will need another 4,500 megawatts (MW) power from 2017 and all of  that will be fuelled by gas. The initial tender will be for a 750MW gas-fired plant.  "The 750MW is part of the 4,500MW that will be needed in 2017 ... We hope  through this process, we will get offers that are competitive, so we will be able to  maintain at least reasonable tariffs to the consumers," Ahmad Tajuddin said.  The EC is now preparing tender documents and is also in the midst of  appointing consultants for the job. Apart from saying that the power plants will  be in Peninsular Malaysia, Ahmad Tajuddin did not say where they would be  located. (BT)

Autosport UK has reported that Proton is poised to sell a stake in loss making Group Lotus to a private investment firm based in Luxembourg. The report  cited high level sources as saying that Genii Capital has held advanced talks with  Group Lotus’ Malaysian owners about taking a management and financial  interest in the iconic car manufacturer  — which could even go as far as Genii  taking a majority shareholding. Genii is headed by Gerard Lopez which also  owns the Renault F1 team of which Group Lotus is the title sponsor.  Autosport said that with moves underway to rebrand and rename the  Renault F1 as Lotus in 2012, a full integration of the F1 team and the  Norfolk-based car maker appears to be on the cards. ―Such a move  could result in Lopez and Group Lotus CEO Dany Bahar working  together closely to push the Lotus brand in both F1 and the road car  business,‖ said the report. It also added that both Renault team boss Eric Boullier and Bahar  hinted that a move for closer ties between the F1’s outfit owners and  Group Lotus was on the cards, citing Boullier as saying about the  possibility of Genii Capital taking over Group Lotus: ―It is another  rumour. I like this one.‖ (Malaysian Insider)

Contrary to speculation, Proton Holdings is not looking to sell a stake in its  loss-making Group Lotus to Genii Capital or any other suitor, said managing  director Datuk Seri Syed Zainal Abidin Syed Mohamed Tahir. "There are no  plans or any discussions about Proton selling a stake of Lotus. These are just  speculations," he said, dismissing a report by Autosport UK. (Financial Daily)

In a notice to analysts,  MRCB informed that a minor construction mishap  occurred at Lot G mixed development in KL Sentral yesterday. The incident  happened while workers were pouring concrete on to a slab when the  scaffoldings gave way.  Work to clear the area is estimated to take  approximately 3 days and work at unaffected sites can continue. The  Department of Safety and Health (DOSH) has been informed of the incident and  full cooperation is being extended. A construction worker sustained minor  injuries and was sent to the University Malaya Medical Centre (UMMC) for  treatment.  All safety procedures were adhered to as the workers were well  equipped with safety gears as required by local safety standards. A full  investigation is underway to ascertain the cause of the incident. (Company)

Hong Leong Bank’s renounceable rights issue of up to 299.8m shares on the  basis of one rights for every five held at RM8.65 per rights share was  oversubscribed by 36.9%. (Financial Daily)

KUB was granted an award from MAHB for KLIA2 works package comprising  runway 3, parallel taxiway and associated works. Contract value is RM268.8m.  Project period is 16 months. (BMSB)

Malaysian companies that have operations in Thailand are not spared from  the country’s worst  flood in decades. The flood has prompted some public  listed companies in Malaysia to announce the shutdown of their operations in  Thailand. Filings with  Bursa Malaysia yesterday showed that  Eng Teknologi  Holdings, Fraser & Neave Holdings, Notion VTec and D’nounce  Technology in Thailand had succumbed to the flood, with the extent of  damage yet to be determined. (Financial Daily)

Fraser & Neave Holdings Bhd (F&N) announced that its dairies product  manufacturing facilities in Rojana Industrial Park, Ayutthaya, Thailand under  F&N Dairies (Thailand) Limited, a wholly owned subsidiary, was flooded and  has ceased production. At this time, it is not possible to assess the extent of the damage. The  Group will provide an update on the effect of the flood after employees  regain access to the plant and are able to carry out an assessment of the  damage, lead times for obtaining replacement parts and components  and repairs, and restoration of supplies. Crisis management teams have been activated and management’s  priority will be to ensure the continued safety of employees and to  minimize disruptions to its customers (BMSB).

Notion Vtec’s subsidiary in Thailand has stopped operations due to severe  flooding in Ayutthaya. Notion Thailand had stopped operations from Oct 10.  The company said there was insurance coverage taken against damage caused  by flood to property, plant and equipment. (Financial Daily)

Masterskill  announced that the Ministry of Higher Education Malaysia had  granted approval for a new programme, Bachelor of Science (Hons)  Pharmacological Science (MQA / PA 0206) (N/421/6/ 0006) to Masterskill  University College of Health Sciences, Pasir Gudang Campus owned by  Masterskill (M) Sdn. Bhd., a wholly-owned subsidiary of the company (BMSB).

Pos Malaysia expects its new service, On Demand Pick-Up (ODP) to garner  RM3m revenue within the first year of operation. The service is a new  value-added facility whereby customers can schedule a pick-up of courier items  at their homes or offices for delivery by PosLaju. Customers only need to pay a  fee of RM5 per pick-up point, regardless of the amount of items. (BT)

IGB Corp has disposed its 6.5% stake or 4.7m shares in  Ipmuda Bhd for  RM3.75m and thus ceases to be a substantial shareholder in the latter.  (Malaysian Reserve)

Gadang Holdings has accepted a RM410.87m contract from the  Public  Works Department to undertake the completion of the abandoned works at  the 300-bed Shah Alam Hospital. The contract was to be completed within a  period of 24 months. (Financial Daily)

Pos Malaysia: New Service. Pos Malaysia expects its newly-launched service, On Demand Pickup (ODP) by PosLaju, to generate RM3m in revenue in the first year of operations. (Source: The Star)

20111012 0945 Global Market Related News.

Asian Stocks Fall as Alcoa Earnings, Europe Crisis Fuel Investor Concerns (Source: Bloomberg)
Asian stocks fell for the first time in five days as optimism over U.S. corporate earnings waned after Alcoa Inc. (AA) reported profit that trailed analyst estimates, and on concern Europe’s debt crisis may worsen. Alumina Ltd., an Australian resource company, sank 4.7 percent in Sydney after Alcoa’s third-quarter profit missed estimates as global demand slowed. BHP Billiton Ltd. (BHP), the world’s biggest mining company, dropped 2 percent in Sydney as oil and metal prices slid. Honda Motor Co., Japan’s second- largest automaker by revenue, slumped 4 percent in Tokyo after saying that flooding in Thailand may hurt production.
The MSCI Asia Pacific Index sank 0.6 percent to 115.01 as of 9:44 a.m. in Tokyo amid uncertainty that a revised bailout fund for the euro area will be ratified. More than two stocks fell for each that advanced on the gauge, which climbed the previous two days after German Chancellor Angela Merkel and French President Nicholas Sarkozy pledged to deliver a plan to recapitalize banks and address Greece’s debt crisis.

Asia Girds for Risks With Indonesia Rate Cut (Source: Bloomberg)
Asian policy makers are bolstering efforts to protect their economies from weakening global growth, as Indonesia unexpectedly cut interest rates and the Philippines prepares to unveil a stimulus plan this week. Bank Indonesia lowered its reference rate by a quarter of a percentage point to 6.5 percent yesterday, defying the predictions of all 15 economists surveyed by Bloomberg News. Philippine President Benigno Aquino is due to announce details of a 72.1 billion-peso ($1.7 billion) spending package today, while Singapore’s central bank is forecast by economists to say this week that it will slow or end its currency appreciation. Emerging-market nations have turned from fighting inflation to supporting growth as a struggling U.S. recovery and deepening European crisis threaten the global economy. Brazil, Turkey, Russia and Pakistan have cut borrowing costs in 2011, while Asian countries from the Philippines to South Korea have refrained from further rate increases in recent weeks.

Most U.S. Stocks Climb as Earnings Optimism Offsets Concerns Over Europe (Source: Bloomberg)
Most U.S. stocks advanced, while the Standard & Poor’s 500 Index posted its smallest move since August, as optimism about third-quarter corporate earnings overshadowed concern Europe’s debt crisis is worsening. Alcoa Inc. (AA), the biggest U.S. aluminum producer, rose 2.1 percent ahead of its results. Apple Inc. (AAPL), Bank of America Corp. (BAC) and Caterpillar Inc. (CAT) added at least 1.4 percent to pace gains among companies most-tied to the economy. Mosaic Co. (MOS) jumped 4.3 percent as Credit Suisse Group AG said valuations for fertilizer shares are attractive. AMR Corp. (AMR) rose 7.1 percent as American Airlines joined its bigger U.S. peers with deeper seating cuts.
Almost seven stocks rose for every five that fell on U.S. exchanges at 4 p.m. New York time. The S&P 500 added 0.1 percent to 1,195.54. The benchmark gauge traded within a 1 percent range between its high and low level for the day, the narrowest since July 26. The Dow Jones Industrial Average retreated 16.88 points, or 0.2 percent, to 11,416.30 today.

Senate Passes Measure on China’s Weak Yuan (Source: Bloomberg)
The U.S. Senate passed legislation punishing China for its undervalued currency as opposition from House Speaker John Boehner casts doubt on whether the measure will become law. The Senate voted 63-35 yesterday for the measure backed by Democrats such as Senators Sherrod Brown of Ohio and Charles Schumer of New York and Republicans including Lindsey Graham of South Carolina and Jeff Sessions of Alabama. China’s leaders and Washington opponents such as Boehner and the U.S. Chamber of Commerce have said the measure letting U.S. companies seek duties on Chinese goods to offset the weak yuan risks starting a trade war. Senate passage put the focus on Boehner. “By passing by a large majority, maybe they think they will be able to intimidate Boehner into a vote,” Nicholas Lardy, senior fellow at the Peterson Institute for International Economics in Washington, said in an interview.

Senate Blocks Obama’s $447B Job Creation Plan (Source: Bloomberg)
Opponents of President Barack Obama’s $447 billion jobs plan blocked the measure in the Senate, with two Democrats joining Republicans to derail his prime proposal to help turn around the struggling economy. The tally on the test vote wasn’t completed by early evening as the roll call remained open for Senator Jeanne Shaheen, a New Hampshire Democrat, who was on her way back to Washington to vote in support of the plan. More than 40 senators voted against permitting debate on the measure, effectively shelving it. The broad plan includes cuts in payroll taxes for workers and employers and provides new funding for roads, bridges and other infrastructure. Senate Minority Leader Mitch McConnell called the measure a “lousy idea” that relies on proposals similar to 2009’s $825 billion stimulus, an effort he said that failed to work.

China’s Banks Rally as State Investor Buys Shares After Valuations Slump (Source: Bloomberg)
Agricultural Bank of China Ltd. (601288) jumped a record 12.8 percent in Hong Kong, leading a rally in the nation’s financial shares after state-run Central Huijin Investment Ltd. started buying the stocks. Industrial & Commercial Bank of China (601398) Ltd., the world’s biggest lender by market value, gained 6.7 percent to close at HK$4.31 while Bank of China Ltd. (3988) climbed 7.7 percent after the arm of China’s sovereign wealth fund said it began buying shares yesterday in the four biggest banks. The cost of protecting China’s bank debt fell. Central Huijin, set up to hold the government’s stakes in the banks, boosted its holdings after valuations sank below the level reached during the global financial crisis. Huijin helped spur a 21 percent week-long rally in the Shanghai Composite Index when it bought bank shares in 2008 as part of a series of steps taken by China aimed at supporting the market.

Chanos Says Chinese Lenders ‘Deteriorating’ as Government Purchases Shares (Source: Bloomberg)
Jim Chanos, the hedge-fund manager who’s been betting that Chinese bank stocks will tumble, said a rally spurred by government purchases of the shares hasn’t changed his bearish outlook. The MSCI China Financials Index surged 6 percent today after state-run Central Huijin Investment Ltd. started buying shares in the four biggest Chinese lenders. The gauge of banks, insurers and developers had tumbled as much as 43 percent in 2011 through Oct. 4, sending its price-to-earnings ratio to a record low of 5.6 on concern that slowing economic growth will spur bad debts after a three-year credit boom. “The fact that people are even talking about the government stepping in to shore up the banks, when two months ago people thought there was nothing wrong with the Chinese banks, should tell you just how seriously this situation is deteriorating,” Chanos, founder of New York-based hedge fund Kynikos Associates, said in an interview with Bloomberg Television’s Michael McKee today.

Japanese Stocks Snap 3-Day Winning Streak as Alcoa Profit Misses Estimates (Source: Bloomberg)
Japanese stocks fell for the first time in four days as optimism about U.S. corporate earnings waned after Alcoa Inc. (AA) reported profit that missed analyst estimates and amid concern Europe’s debt crisis will worsen. Nissan Motor Co., a carmaker that gets about 80 percent of its revenue overseas, fell 1.1 percent. Honda Motor Co., Japan’s second-largest automaker by revenue, sank 2.9 percent after it said production may fall because of plant closures caused by flooding in Thailand. Mitsui & Co., a trading house that counts commodities as its biggest source of profit, slid 1.6 percent after metal prices declined. The Nikkei 225 (NKY) Stock Average fell 0.6 percent to 8,718.18 as of 9:02 a.m. in Tokyo. The broader Topix lost 0.7 percent to 750.08, with more than three times as many shares declining as advancing.

Japan’s Machinery Orders Rise, Signaling Corporate Investment May Recover (Source: Bloomberg)
Japan’s machinery orders rebounded in August on demand for electrical products, signaling that companies are willing to invest even as global economic growth slows and the yen stays near post-World War II highs. Bookings rose 11 percent in August from July, the fastest increase in a year, the Cabinet Office said in Tokyo today. The indicator of capital spending in three to six months was projected to increase 3.9 percent, according to the median forecast of 31 economists surveyed by Bloomberg News. Orders fell 8.2 percent in July from June. Today’s report contrasts with data last month that undershot economist forecasts, including exports, industrial output and retail sales. A yen appreciation that Nissan Motor Co. chief executive officer Carlos Ghosn said last week may cause a “hollowing out” of Japan’s industrial base also threatens to derail a rebound in the nation’s economy.

South Korea’s Jobless Rate Holds Near a 3-Year Low as Service Sector Hires (Source: Bloomberg)
South Korea’s unemployment rate held near a three-year low last month as the service sector, wholesalers and retailers hired more workers. The jobless rate was at 3.2 percent in September, compared with 3.1 percent in August, Statistics Korea said today in Gwacheon, south of Seoul. That matched the median estimate in a Bloomberg News survey of 10 economists. South Korea’s central bank will extend tomorrow a pause in interest-rate increases as weakness in European economies and the U.S. threatens demand for the nation’s exports, according to a Bloomberg News survey of economists. Economist Nouriel Roubini told a forum in Seoul yesterday that Europe’s response to its debt crisis risks being “too little, too late.”

Singapore Plans ‘Judicious’ Management of Dollar as Economic Growth Slows (Source: Bloomberg)
Singapore said its economy will probably expand at a slower pace in the next few years and the central bank will continue “judicious management” of its currency to curb inflation and support growth. The island’s expansion will be affected by a “more uncertain” global economy and the government will increase spending in the next five years, Finance Minister Tharman Shanmugaratnam, who is also deputy prime minister and chairman of the Monetary Authority of Singapore, said in a statement yesterday. The government issued the statement to elaborate on plans presented by President Tony Tan in parliament on Oct 10. “The headwinds from slower global growth will mean slower growth in Singapore in the next few years,” Shanmugaratnam said. “In this environment of heightened risk and volatility, MAS will continue to provide the basis for economic and financial stability in Singapore.”

Russia Nears Natural Gas Deal With China: Putin (Source: Bloomberg)
Prime Minister Vladimir Putin said Russia is nearing an agreement with China to supply natural gas to the world’s biggest energy consumer. “Those who sell always want to sell at a higher price, while those who buy want to buy at a lower price,” Putin said yesterday at the start of a meeting with Chinese Prime Minister Wen Jiabao in Beijing. “We need to reach a compromise that will satisfy both sides.” The Russian premier, who is making his first foreign trip since announcing plans to return to the presidency next year, is seeking to overcome a stalemate in talks on natural gas deliveries to China. Russia, the world’s largest energy exporter, has delayed plans to build gas pipelines to the Asian country for more than a decade because of wrangling over how much China will pay for the fuel.

Europe Must Go Beyond Recapitalization: Geithner (Source: Bloomberg)
U.S. Treasury Secretary Timothy F. Geithner said European leaders must go beyond a planned recapitalization of banks to resolve the continent’s sovereign- debt crisis. “The most important problem is they have to make sure that the major economies of Europe that are under pressure now are able to borrow at affordable rates,” Geithner said today in an interview with Bloomberg Television. “They recognize the need to do more than they’ve done so far.” Geithner will be in Paris on Oct. 13-14 for a meeting of Group of 20 finance ministers. European officials are striving to meet an end-of-month target set by French President Nicolas Sarkozy to get to grips with the crisis, which has propelled Greece to the brink of default, shaken world markets and fueled speculation that the 17-nation currency might not survive in its current form. European leaders are due to meet on Oct. 23.

Euro Near 3-Week High Before Barroso Presents Bank Recapitalization Plan (Source: Bloomberg)
The euro was 0.4 percent from a three-week high before European Commission President Jose Barroso presents proposals on bank recapitalization after Germany and France pledged to devise a plan by early November. The 17-nation currency held a gain from yesterday against the Swiss franc as European Union and International Monetary Fund officials indicated Greece will get an 8 billion-euro ($11 billion) loan next month. Australia’s dollar snapped a decline from yesterday against the yen before a report tomorrow that economists said will show employers added positions in September. “The market is definitely putting its faith in the ability of the euro-area authorities to have something concrete in place by the end of the month and that is helping support euro,” said Emma Lawson, a currency strategist at National Australia Bank Ltd. said in Sydney.

Bank of England Is Prepared to Add Extra Stimulus If Needed, Posen Says (Source: Bloomberg)
Bank of England policy maker Adam Posen said the central bank’s new round of stimulus is the “right place” to start and officials are ready to do more if it’s needed. “We are going to review it on an ongoing basis,” Posen said in an interview with Bloomberg Television in New York late yesterday, referring to the bank’s Oct. 6 decision to increase so-called quantitative easing. “We will readjust it if it turns out we need more.” The Bank of England raised the ceiling for asset purchases to 275 billion pounds ($429 billion) from 200 billion pounds, the biggest expansion since the first round of stimulus in March 2009. Posen said the increase should be enough “to make a material improvement in prospects versus what it otherwise would be and it’s the right place for us to start.”

Slovakia Rejects European Bailout Overhaul (Source: Bloomberg)
Slovakia’s opposition leader said lawmakers must find a way to approve Europe’s enhanced bailout fund, which was rejected yesterday amid a dispute over the future of Prime Minister Iveta Radicova. Slovakia “must sign up to the rescue fund,” Robert Fico said late yesterday, adding that his party, which didn’t back the measure yesterday, is awaiting a proposal from the ruling coalition. Radicova said the only country in the 17 nations that use the euro that has yet to approve European Financial Stability Facility, must find a solution to approve the EFSF “as soon as possible.” No time for a new vote has been set. “Eventually a yes vote will be secured,” Tim Ash, head of emerging-market research at Royal Bank of Scotland Group Plc in London, said by phone yesterday. “Does Slovakia really want to be alone among 17 euro-zone members states on this one, and when the future of Europe is at stake?”

Greek $11 Billion Loan Payment Likely in Early November as Debt Talks Loom (Source: Bloomberg)
European Union and International Monetary Fund officials indicated Greece will get an 8 billion- euro ($11 billion) loan next month under a 110 billion-euro bailout, as European leaders move to reopen talks on a new package that may mean deeper writedowns on Greek debt. The team of officials from the EU, IMF and European Central Bank said Greece has made “important progress” in fiscal consolidation, according to an e-mailed statement today upon completion of a review in Athens. The mission warned that more spending cuts would be needed in 2013 and 2014 to meet deficit targets. “Continuing funding to Greece is the least worst option available,” said Peter Dixon, an economist at Commerzbank AG in London. “We should be thankful that sanity is prevailing, for now at least.”

20111012 0944 Global Commodities Related News.

Corn (Source: CME)
US corn futures finish limit up as traders cover short positions ahead of USDA crop reports tomorrow. Traders are nervous the government will surprise the markets with unexpected adjustments to its output or demand estimates. That encouraged shorts to take some profits off the table. "More than anything else, I think it's people covering," says Sid love of Kropf & Love Consulting. CBOT December corn rises 40c to $6.45 a bushel.

Wheat (Source: CME)
US wheat futures close sharply higher on spillover support from limit-up corn prices. The grains are linked as both are used for animal feed. Additional strength for wheat came from Russia's plans to limit grain exports, says Tim Hannagan of PFG Best. The restrictions could send more business to the US, which has not been able to compete recently with low-priced wheat available from the Black Sea region. CBOT December wheat soars 49 1/4c to $6.60 3/4 a bushel while KCBT December gains 43 3/4c to $7.29 3/4. However, after a big recent rally, MGEX December rose just 2 1/4c to $9.36 1/2.

UPDATE: US Grain, Soy Futures Soar Ahead Of USDA Crop Reports (Source: CME)
U.S. grain and soybean futures surged Tuesday as traders waited for highly anticipated federal crop data. Corn futures climbed the maximum amount allowed on the Chicago Board of Trade, with the most actively traded December contract jumping 40 cents, or 6.6%, to $6.45 a bushel. Soybeans for November delivery climbed 61 cents, or 5.2%, to $12.38 1/2 a bushel. Soft red winter wheat for December delivery was up 45 cents, or 7.4%, to $6.56 1/2 a bushel. Driving prices higher were traders buying back previously sold positions before the U.S Department of Agriculture issues monthly reports Wednesday. Traders had made money on the positions and wanted to book profits due to uncertainty about how the government will adjust its output and supply estimates.
Money managers had been increasing their sold, or short, positions in corn and soybeans lately as prices dropped amid fears about a global economic slowdown. They increased short positions by 3,151 contracts in corn in the week ended Oct. 4 and by 2,976 contracts in soybeans, according to data from the U.S. Commodity Futures Trading Commission. "You had a seat change of funds getting out of longs and starting to get short the market," said John Kleist, analyst for ebottrading.com, an agricultural brokerage firm. Uncertainty about the USDA reports encouraged market participants to buy back some of the previously sold positions. Analysts generally expect the USDA will make only modest changes to its forecasts for the corn and soybean harvests, predicting a reduction in the number of harvested acres will offset an increase in the number of bushels produced per acre. Yet, traders evened up positions in the markets, as the department has built a reputation for surprising markets with unexpected forecasts.
"There is a little nervousness," said Jason Britt, president of Central States Commodities, a brokerage in Kansas City. Uncertainty about the reports has kept the markets on edge for the past several sessions. Gains on Tuesday were a turnaround from last week, when corn and soybean prices dropped to fresh lows for the year. Traders said the recent setback in prices increased foreign demand for U.S. farm products, helping to fuel Tuesday's recovery. They said China has been buying soybeans, and the USDA confirmed exporters struck deals to sell 261,200 metric tons of corn to Mexico. Some buyers stepped in to the markets because they suspect last week's slide in prices represented the lowest level the markets will reach this autumn, said Alan Brugler, president of Brugler Marketing & Management in Nebraska. Market participants feel it is the right time to "lighten up the shorts or nibble the long side," he said. Short positions are bets that prices will fall, and long positions are bets that prices will rise.
Additional support for the markets came from Russia's plans to restrict grain exports, noted Mike Zuzolo, president of Global Commodity Analytics & Consulting, a brokerage firm in Indiana. The export limit of 24 million metric tons for the current marketing year could send buyers to other countries, such as the U.S., he said. Increased foreign demand for U.S. wheat would be a turnaround as foreign buyers have been looking to Russia for low-priced grain.

Russia To Limit 2011-2012 Grain Export To 24 Mln Tons (Source: CME)
The Russian government will impose a grain export limit of 24 million metric tons in the current marketing year, the government press service said, citing Deputy Prime Minister Viktor Zubkov. The aim of imposing such a limit is to maintain stable domestic grain prices, the service quoted Zubkov as saying. Zubkov said that since the beginning of the current marketing year to date, Russia has exported 10.7 million tons of grain. If they continue at the same rate, exports will total 18 million-19 million by the end of the calendar year. The limit would most likely be imposed through a floating export duty, Zubkov was quoted as saying. He added that the decision had already been agreed with all the relevant government agencies. Russia's grain harvest this year should be 90 million-92 million tons, with domestic consumption at 72 million tons, meaning the maximum amount of exports the country can afford without disrupting the domestic market is 23 million-24 million tons, Zubkov said.

USDA Says 261,200 Tons Of Corn Sold To Mexico In 11-12 (Source: CME)
Private exporters reported to the U.S. Department of Agriculture export sales of 261,200 metric tons of corn for delivery to Mexico during the 2011-2012 marketing year. The marketing year for corn began Sept. 1. The USDA issues both daily and weekly export sales reports to the public. Exporters are required to report to the USDA any export sales activity of 100,000 metric tons or more of one commodity, made in one day to one destination, by 3 p.m. Eastern time on the next business day following the sale. Export sales of less than these quantities must be reported to the USDA on a weekly basis.

Brazil Revenue From Top Produce Items Seen Rising 12% In 2011 (Source: CME)
Gross revenues from Brazil's top 20 agricultural products should rise 12% this year from 2010, reaching a total 205 billion reais ($116.7 billion), the Agriculture Ministry said Tuesday. Expected to lead the gain is cotton, sales of which should more than double in value this year, thanks to high prices and increased planting. Revenues from grapes, coffee, corn, soy and oranges are also expected to increase substantially. Brazilian farmers' income from onions, potatoes and wheat is seen declining in 2011 from last year, on the other hand. The ministry noted that coffee, sugarcane, oranges, corn and soy are expected to account for 72% of Brazil's produce revenues this year.

Grains Surge Most in Year as September Slump May Spur U.S. Export Rebound (Source: Bloomberg)
Corn, soybean and wheat futures posted their biggest gains in more than a year on signs that a plunge in prices last month is increasing demand for supplies from the U.S., the world’s largest exporter of the crops. Mexico, the biggest corn importer after Japan, bought 261,200 metric tons from U.S. exporters, the government said today. Soybeans inspected for export more than doubled to 23.4 million bushels in the week ended Oct. 6, with two-thirds destined for China, the U.S. Department of Agriculture said. Russia said today it may impose export duties on grain just three months after lifting a ban on shipments.
Grain futures that plunged in September on concern that Europe’s debt crisis would slow global growth led a jump today in the Standard & Poor’s GSCI Index of 24 raw materials. The commodity gauge reached the highest since Sept. 22 and extended a five-session rally that is the longest since August. Treasuries fell, pushing yields to a one-month high, and the S&P 500 equity index advanced for a second day.

Soybean Slump Ending as Record Global Demand Overwhelms Farms: Commodities (Source: Bloomberg)
The biggest rout in soybean prices in more than two years may be ending as farmers from Iowa to Brazil fail to keep pace with record demand for cooking oil and livestock feed. The U.S., the world’s largest grower and exporter, will harvest 7.3 percent less this year, leading the first decline in global output since 2009, the U.S. Department of Agriculture estimates. Morgan Stanley expects soybeans to average $14.25 a bushel in the 12 months ending Aug. 31, the most ever and 21 percent more than yesterday’s closing price of $11.775. The use of soybeans expanded at almost four times the pace of the world population in the past decade, led by China, government data show. While prices began tumbling last month on investors’ mounting concern that slowing growth will weaken demand for raw materials, global consumption of cooking oils hasn’t fallen during a recession in the past three decades, USDA data show.

US soy near one-week top; corn, wheat rise on EU hopes
SINGAPORE, Oct 11 (Reuters) - U.S. soy gained more ground, rising almost 1 percent, while corn and wheat firmed for a second straight day as a pledge by European leaders continued to shore up hopes for the resolution of the euro zone debt crisis.
"A part of the action has to do with a correction because the slide in September was quite aggressive and it's a bit of a risk appetite in the market," said Abah Ofon, an analyst with Standard Chartered Bank in Singapore.

Hungary sees 8.1 mln T 2011 maize crop -AgMin
BUDAPEST, Oct 11 (Reuters) - Hungary's maize crop could reach 8.1 million tonnes this year, slightly higher than previous indications for 8 million, the Agriculture Ministry said on Tuesday.
The ministry told Reuters in an emailed response to questions that with 40-45 percent of the harvest completed, the average yield was 6.8 tonnes per hectare, projecting the final yield at above 6.68 t/ha.

Maize harvesting confirms bumper yields in west EU
PARIS, Oct 10 (Reuters) - Maize harvesting in major producers France and Italy has confirmed expectations of high yields after the crop enjoyed more favourable weather than other grains in western Europe, analysts and growers said.
Strong results from well-advanced harvesting in the two countries have reinforced the prospect of bumper maize production in the European Union this year, providing comfort for livestock farmers reliant on the feed grain and opening an export window for the EU amid tight global supply of maize.

Weekend rains boost U.S. Plains soil moisture
CHICAGO, Oct 10 (Reuters) - Heavy rains in the parts of the southern U.S. Plains during the weekend gave a good boost of moisture to parched soils in hard red winter wheat-growing areas, a forecaster said Monday.
"That rain was much needed, almost drought breaking for parts of Texas and Oklahoma," said Joel Burgio, agriculture meteorologist at Telvent DTN. "I'm sure they (farmers) appreciate it."

India's 2012 wheat output seen at record 86 mln T
NEW DELHI, Oct 10 (Reuters) - India expects a record wheat harvest of 86 million tonnes in 2012, the farm secretary said on Monday, raising hopes of exports for a second straight year from the world's second-biggest producer and consumer of the grain after China.
India, which consumes about 76 million tonnes of wheat a year, harvested a record 85.93 million tonnes of the grain in 2011 and allowed exports of 2 million tonnes.

Philippines says sells 113,000 T sugar to US, Asia buyers
MANILA, Oct 11 (Reuters) - The Philippines sold 113,000 tonnes raw sugar to the United States and some Asian countries for shipment between September and December, about 17 percent of planned exports for the current crop year, the sugar regulator said on Tuesday.
The volume is more than 82 percent of the Southeast Asian country's non-U.S. quota sugar exports in the previous 2010/11 crop year totalling 137,000 tonnes.

Vietnam Coffee-Oct loading seen low, more rain ahead
HANOI, Oct 11 (Reuters) - Coffee exports from Vietnam this month could fall to between 40,000 tonnes and 50,000 tonnes, or 670,000 to 833,000 bags, from 57,300 tonnes loaded in the same month last year, traders said on Tuesday.
The October export volume is an indicator of the size of Vietnam's previous 2010/2011 crop, which traders have estimated at up to 22 million bags, as harvesting has been delayed by rain in the Central Highlands coffee belt.

Flowering to follow rains in Brazil's coffee belt
BRASILIA, Oct 10 (Reuters) - Brazil's southeastern coffee belt should bloom within days, marking the start of the 2012 crop after heavy rain ended a withering dry spell, agronomists and forecasters told Reuters on Monday.
The expected larger coffee crop in 2012 from the world's top grower is of pivotal importance to the global market as it faces recurrent shortages of high grade arabica beans. Output growth has lagged the brisk increase in consumption.

Ukraine white sugar output at 707,000 T so far
KIEV, Oct 10 (Reuters) - Ukrainian sugar refineries produced 707,000 tonnes of white sugar from sugar beet as of Oct. 10 or 39 percent more than at the same date in 2010, Ukraine's sugar union Ukrtsukor said on Monday.
The union said in a report that more than 70 refineries had received about 7.4 million tonnes of sugar beet and processed 5.8 million tonnes.
 
Thailand to assess damage to sugar cane crop from flooding
BANGKOK, Oct 10 (Reuters) - Thailand's government is assessing the damage to the sugar cane crop from recent flooding and may have information by the end of the month, a Ministry of Industry official said on Monday.
"Cane is different in nature to other crops," said Prasert Tapaneeyangkul, secretary-general of office of cane and sugar at the Ministry of Industry.

Record Coal Price Risk Gaining as Australia Prepares for Rain: Commodities (Source: Bloomberg)
The record rains that flooded Australia and led to surging coking coal prices last year are brewing again. The chances of above-average rainfall in parts of Northern Queensland in the rest of the year are 65 percent to 70 percent, Australia’s Bureau of Meteorology said Sept. 19. One contributor is the returning La Nina weather event that cooling ocean temperatures and stronger trade winds are indicating may return this quarter. The prospect of disrupted supply from the world’s biggest exporter led Citigroup Inc. analyst Daniel Hynes to say coal may “spike” more than 20 percent to about $350 a metric ton, if the disruption is as severe as last summer. The previous La Nina, Australia’s most expensive natural disaster, shut mines and sent coal to a record $330 a ton in the June quarter.

Brent stays near $109 on Europe optimism, Kuwait strike
SINGAPORE, Oct 11 (Reuters) - Brent crude held near $109 on cautious optimism that European banks may avert a financial crisis after leaders promised a plan to resolve the region's debt woes while a strike in OPEC member Kuwait threatened exports.
"The market is a little bit optimistic over the European banking issue, but we still need to watch the situation carefully," said Ken Hasegawa, a commodity sales manager at Newedge Japan.

S.Korea LNG inventory seen at near 3.5 mln T by mid-Nov
SEOUL, Oct 11 (Reuters) - South Korea's liquefied natural gas (LNG) inventory stood at over 3 million tonnes as of Tuesday, and the world's second-largest LNG importer plans to build nearly 3.5 million tonnes of inventory by mid-November for winter demand, a government source said.
Earlier, state-run Korea Gas Corp (KOGAS)  said it had sold gas equivalent to 1.95 million tonnes of LNG domestically in September, up 15.8 percent from a year earlier and led by strong demand for power generation. The amount was equivalent to 86.3 billion cubic feet of natural gas.

Kuwait says oil exports moving amid strike
DUBAI/KUWAIT, Oct 11 (Reuters) - Exports of crude oil and oil products out of Kuwait are moving normally and all customer commitments will be met, a Kuwaiti oil industry spokesman said on Tuesday, as the customs union pledged to continue a strike that stranded sea tanker traffic on Monday.
"Kuwait Petroleum Corp (KPC) reassures its customers about securing their crude, oil product needs," Sheikh Talal al-Khaled al-Sabah, spokesman for the OPEC producer's oil sector, said in a statement to Reuters.

China and Russia to hold energy talks while Putin visits
BEIJING/MOSCOW, Oct 10 (Reuters) - China and Russia will discuss an elusive giant gas deal during Prime Minister Vladimir Putin's visit to Beijing, but a Russian official said on Monday that there were no plans to sign an agreement just yet.
Putin's two-day visit from Tuesday will be his first foreign trip since revealing plans to reclaim Russia's presidency. He could seek to narrow price disagreements that have prevented Russia from signing a 30-year deal to supply China with up to 68 billion cubic metres of gas per year.  

Libya to free up oil sector-deputy minister
TRIPOLI, Oct 10 (Reuters) - Libya's oil sector will be freed up under the new government and companies will have more say over exploration, projects and operations, Libya's deputy oil minister told Reuters on Monday.
"We want to remove restrictions on management to provide more opportunity for development and for young people," Omar Shakmak said in an interview.

Oil Drops First Day in Six on Concern Economy to Falter as Stockpiles Rise (Source: Bloomberg)
Oil fell for the first day in six in New York, snapping the longest run of gains this year, on concern that fuel demand will falter after U.S. and European lawmakers rejected plans to bolster their economies. Futures slipped as much as 0.9 percent after Slovak lawmakers voted against an overhaul of Europe’s bailout fund and the Senate blocked President Barack Obama’s $447 billion plan to boost job creation. The Organization of Petroleum Exporting Countries cut its global oil demand growth forecast for this year and 2012, citing a weak economic outlook in industrialized nations. A report tomorrow may show U.S. crude stockpiles increased, according to a Bloomberg News survey. “The market is starting to come to grips with the depth of the issues in Europe,” Jonathan Barratt, a managing director of Commodity Broking Services Pty in Sydney, said by phone today. Investors are “questioning the ongoing demand for crude oil,” he said.

Copper Drops Most in a Week as China’e Exports May Ebb, Europe Woes Mount (Source: Bloomberg)
Copper fell the most in a week on concern that metal demand will slide as the global economy falters, Chinese exports wane and Europe’s debt woes escalate. Chinese export growth probably declined to 20.5 percent in September from 24.5 percent a month earlier, according to economists’ estimates compiled by Bloomberg. European Central Bank President Jean-Claude Trichet said the debt crisis threatens the financial system. “China’s economy is contracting, and we are not seeing any greater demand there,” Frank Lesh, a trader at FuturePath Trading in Chicago, said in a telephone interview. “Europe has real troubles that will drag on the world economy, and it will remain a concern for the next year at least.”

Container Lines Delay Asia-U.S. Rates Target on Struggle to Predict Demand (Source: Bloomberg)
Container-shipping lines delayed announcing targets for next year’s rates on Asia-U.S. routes as they struggle to forecast volumes amid unsteady economic growth and an expanding global fleet. “No one is able to predict even the near-term outlook,” Brian Conrad, executive administrator at the Transpacific Stabilization Agreement, a group of 15 container lines, said yesterday in Shenzhen, China. Publication of the TSA’s annual rates guidelines, which usually happens around this month, may be delayed until early next year, he said. The delay reflects U.S. retailers’ unwillingness to commitment to orders for Asian-made toys, flatscreen TVs and sneakers amid a 9 percent jobless rate and stock-market fluctuations. An increase in the number of container vessels in service this year has also hindered shipping lines’ efforts to secure higher rates.

20111012 0942 Soy Oil & Palm Oil Related News.

Soybeans (Source: CME)
US soybean futures rallied to highest point in two weeks as traders covered short positions ahead of tomorrow's USDA crop reports. Traders are cautious of a surprise in government crop forecasts, particularly after experiencing steep losses during the past month, analysts say. Firm cash basis levels, with farmers storing grain in hopes of higher prices; rising end-user and importer demand helped buoy prices. Spillover support from corn prices climbing the maximum daily amount attracted buying across the entire grain sector. CBOT Nov soy ended up 58c (4.9%) at $12.35 1/2/bushel.

Soybean Meal/Oil (Source: CME)
CBOT Dec soymeal ended up $12.10 higher at $320.60/short ton; Dec soyoil up 2.07c at 52.18c/lb.

US CASH GRAIN: Soy Basis Firms On Demand, Slow Farmer Sales (Source: CME)
U.S. cash soybean basis levels are rising, fueled by limited farmer selling and increased end-user demand. Industry analysts say buyers continue to push prices as farmers choose to store early harvested supplies, awaiting higher prices after futures experienced steep declines in the past month. Solid commercial grain buying is supporting prices, producing dramatic firming in domestic cash soybean bids, according to analysts at AgResource Company in Chicago. "Interior Midwest cash soybean basis bids are up 20-25 cents in just the past few days as processors and exporters compete for limited harvest supplies," AgResource Company reported in a market note. Many farmers have adequate space to store grain and soybeans this fall, and are not feeling pressured to sell much grain out of the field. Given the combination of adequate storage and previous sales at elevated values, marketing any additional inventory at this time is not a concern for farmers, a cash-connected CBOT broker said.
Meanwhile, signs of building export demand are aiding the basis appreciation, as talk of fresh demand from China is increasing the need to move fresh harvest from Midwest to ports at the Louisiana Gulf. The vessel lineup for soybeans at ports for shipment to China now exceeds 1.2 million metric tons, with new sales to China rumored to be concluded in recent days, AgResource added in a market note. U.S. Department of Agriculture on Tuesday reported 23.387 million bushels of soybeans were inspected for export in the week ended Oct. 6, with 15.665 million bushels booked for China. Meanwhile, midday barge basis levels for October shipment of soybeans to the Louisiana Gulf ranged from 22 cents to 60 cents over November futures, up 5 cents from Monday, according to data from the USDA. The rise in barge basis is up 10 cents in the past week and up 26 cents in the past 2 weeks, according to the USDA. Basis is the difference between cash prices and futures market prices.
The corn basis is firm as well, especially true from ethanol plants who are trying to capture as much of the current profit margin as possible. The premiums are all for immediate shipment. Processors and ethanol plants in the eastern Midwest continue to report price premiums for corn supplies. The basis ranged from 10 cents under December futures to 55 cents over December futures, according to data from USDA.

Palm futures up on strong exports; investors eye U.S. soy stocks
SINGAPORE, Oct 11 (Reuters) - Malaysian palm oil futures edged up 0.4 percent on strong exports, but gains were limited by caution ahead of a key U.S. report this week that could show a rise in soybean stocks, which could mean larger supplies of a competing edible oil.
"The market is all friendlier on the exports data. Also, the U.S Department of Agriculture report will set the tone for the rest of the week," said a Malaysian trader in Kuala Lumpur.

Brazil soy planting spreads with early rains
SAO PAULO, Oct 10 (Reuters) - Planting has gained early traction across the grain belt in Brazil, the world's No. 2 soybean grower, after weekend rains marked the end of the dry season, crop analysts said on Monday.
The return of disruptive La Nina weather conditions looms, however, which could spell drier weather over Brazil's southern grain growing states, keeping Brazil from matching its record soy output and yields of last season, forecaster Somar said.

Brazil soybean output seen down in 2011/12-attache
Oct 10 (Reuters) - Following are selected highlights from a report issued by a U.S. Department of Agriculture attache in Brazil:
"Post now forecasts soybean production in 2011/12 at 75 million tonnes, a slight decrease from the record 75.3 million tonnes produced in 2010/11. Post forecasts a record 25 million hectares will be planted to soybeans in 2011/12, a 3 percent increase over 2010/11 planted area of 24.2 million hectares.

Rain reaches Brazil's Mato Grosso soy planting
SAO PAULO, Oct 10 (Reuters) - A second round of rains in October fell on Brazil's No. 1 soybean producing state of Mato Grosso over the weekend and more rain is expected toward the end of the week, local forecasters Somar said Monday.
Although showers are still hitting some regions of the state and not others, a large swath of the growing areas is getting enough moisture to start planting the new crop. -

India Sept vegoil imports may rise on lower prices
NEW DELHI, Oct 11 (Reuters) - India probably imported more palm oils in September as traders built stocks on lower global prices to meet festive demand, a Reuters survey showed on Tuesday.
Importing crude palm, which forms the bulk of Indian vegoil purchases, has become costlier from this month after Indonesia, the world's top palm oil producer, tweaked its tax structure last month that has made the refined variant less expensive.