20111020 1812 FCPO EOD Daily Chart Study.

FCPO closed : 2866, changed : -26 points, volume : higher.
Bollinger band reading : side way range bound little downside biased.
MACD Histrogram : rising, buyer taking chances.
Support : 2850, 2800, 2770, 2750 level.
Resistance : 2900, 2920, 2950, 2970 level.
Comment :
FCPO closed recorded small loss with improved volume participation while overnight soy oil closed recorded huge losses and currently trading weaker while crude oil price rebounding higher after overnight falls.
Lower soy oil and crude oil price resulted FCPO price to opened much lower but managed to recovered partially after export data released still recorded improvement but in slowing down pace.
Daily chart formed an wide range up bar candle with little upper and lower shadow closed above middle Bollinger band after market opened lower and recovered upward all the way to closed near the high of the day.
Chart study revised to suggesting a side way range bound little 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.

20111020 1733 FKLI EOD Daily Chart Study.

FKLI closed : 1430.5, changed : -16 points, volume : higher.
Bollinger band reading : pullback correction little upside biased.
MACD Histrogram : weakening, buyer lock in profit and reduce exposure.
Support : 1425, 1420, 1400, 1395 level.
Resistance : 1440, 1445, 1458, 1470 level.
Comment :
FKLI closed recorded big losses with higher volume transacted surrendered back all yesterday gains doing 10.5 points discount compare to cash market that also closed recorded loss. Overnight U.S. markets closed lower and today Asia markets closed all in negative territory while European markets opened and currently trading lower.
Market optimism on European debt crisis solution cracked after news on Germany and France leader having divided opinion about European bailout fund plan resulted global market to trade negatively.
Daily chart formed a down doji bar candle with long lower shadow closed in between middle and upper Bollinger band level after market lower opened lower near the high of the day and 1 fall downward all the way followed by after lunch session partial upward recovery to closed off the low of the day.
Again, FKLI is still likely to trade in pullback correction within a little upside biased market development testing support and resistance level.
When to buy : buy at support or weakness with quick cut loss and profit target.
When to sell : sell at resistance or strength with quick cut loss and profit target.

20111020 1710 Regional Markets EOD Daily Chart Study.

 DJIA chart reading : side way range bound little upside biased.

Hang Seng chart reading :  side way range bound little downside biased.

KLCI chart reading : pullback correction upside biased.

20111020 1654 Global Market & Commodities Related News.

Asian shares lower, euro capped ahead of Europe summit
TOKYO, Oct 20 (Reuters) - Riskier assets across the board from stocks, metals and commodity currencies fell as investors grew wary  about taking risks ahead of a key European leaders' summit on Sunday.
"The investors were eager to play with broader sentiment turning ... even though the EU isn't completely out of the woods," said a banker close to the deal.

France and Germany Split on Crisis Solution (Bloomberg)
A French-German split over Europe’s rescue strategy emerged as finance ministers prepare to meet in Brussels tomorrow under pressure to craft a solution to the region’s debt crisis. With a summit scheduled two days later, a disagreement over the European Central Bank’s role threatens to stymie progress on the banking and economic questions needed to deliver the comprehensive strategy demanded by global policy makers. Luxembourg Prime Minister Jean-Claude Juncker, who chairs the group of euro-area finance ministers, indicated an impromptu meeting of European leaders in Frankfurt last night failed to resolve differences. “We are still meeting,” he said as he departed.
French President Nicolas Sarkozy, whose wife was reportedly giving birth to his first daughter, jetted into Frankfurt to meet with officials as they attended an event to honor outgoing ECB President Jean-Claude Trichet. Sarkozy, German Chancellor Angela Merkel and International Monetary Fund Managing Director Christine Lagarde left the event at the Frankfurt Opera House without commenting.

Sales of Existing U.S. Homes Probably Fell as Lack of Jobs Hurt Confidence (Bloomberg)
Sales of existing U.S. homes probably fell in September, extending a pattern of gains and losses that shows the industry is being buffeted by a lack of jobs and confidence, economists said before a report today. Purchases declined 2.5 percent to a 4.91 million annual rate, according to the median of 77 economists surveyed by Bloomberg News. Jobless claims data from the Labor Department may show scant improvement in the pace of dismissals. Growing pessimism about the economy, unemployment above 9 percent and limited access to credit are keeping some Americans from taking advantage of near record-low mortgage rates. Foreclosures that are adding to the supply of homes for sale and driving down prices remain a hurdle for an industry that’s made little progress more than two years after the recession ended.
“Weakness in housing isn’t going to change in the short or medium term,” said Jennifer Lee, an economist at BMO Capital Markets in Toronto. “Talk of recession or slowdown, an uncertain job market and volatile financial markets are holding back activity.”

European Stocks Drop as Leaders Split (Bloomberg)
European stocks declined for the third time in four days as splits emerged among the region’s leaders on a plan to end the debt crisis. Asian shares fell and U.S. index futures were little changed. Actelion Ltd. (ATLN) sank the most since May as Europe’s largest biotechnology company said it expects drug sales to decrease next year. Schneider Electric SA (SU), the world’s biggest maker of low- and medium-voltage equipment, slid 7.5 percent after trimming its 2011 profit target. The benchmark Stoxx Europe 600 Index slid 1.1 percent to 234.2 at 8:57 a.m. in London. The measure has still rallied 9 percent from this year’s low on Sept. 22 amid speculation policy makers will find a resolution to Europe’s fiscal woes. The MSCI Asia Pacific Index tumbled 1.8 percent today and Standard & Poor’s 500 Index futures dropped less than 0.1 percent.

European Stocks Unattractive Until Crisis Solved, BlackRock Says (Bloomberg)
European policy makers must deliver on plans to resolve the debt crisis before the region’s equities become attractive investments, according to BlackRock Inc. (BLK), the world’s biggest money manager. “What we need to see is a resolution to the sovereign debt crisis in Europe and some details on how politicians plan to launch the bank rescue plan before we can judge if the market offers a meaningful buying opportunity,” Zehrid Osmani, the Edinburgh-based co-manager of BlackRock’s BGF European Fund, which has about $3 billion under management, said in a phone interview. “We do see pockets of value, but valuation alone is not going to stabilize the market.” The benchmark Stoxx Europe 600 Index has advanced for the past three weeks amid optimism euro-area policy makers will contain the region’s debt crisis. The gauge is trading at 10.1 times the estimated earnings of its companies, compared with the two-year low of 9.1 reached on Sept. 23, according to data compiled by Bloomberg.

U.S. underlying inflation pressures ease
WASHINGTON, Oct 19 (Reuters) - U.S. consumer prices outside food and energy rose at their slowest pace in six months in September, a sign broad inflation pressures remained contained.
The core Consumer Price Index edged up just 0.1 percent, a Labor Department report showed on Wednesday, as the cost of apparel and used vehicles fell, new car prices held steady and rental-related costs rose only modestly.

FOREX-Euro flat on doubts over EU delivering crisis plan
NEW YORK, Oct 19 (Reuters) - The euro was little changed against the dollar and yen due to nagging doubts that European leaders will take aggressive steps at a summit this weekend to resolve the region's debt crisis.
Officials dismissed a report in Britain's Guardian newspaper on Tuesday that France and Germany had agreed to a deal enlarging the European Financial Stability Facility (EFSF), while French President Nicolas Sarkozy said talks to boost the bailout fund have stalled. But investors still clung to the newspaper report as a reason to pare back bets against the euro.

Soy slides to 1-week low; corn, wheat extends losses
SINGAPORE, Oct 20 (Reuters) - U.S. soybean futures lost more ground, falling for a fourth straight day, while corn and wheat slid amid a selloff in the commodity markets triggered by mounting worries over the euro zone debt crisis.
"Euro zone crisis does remain a key concern for the financial markets and there are murmurs that the Chinese economy could be facing some headwind," said Luke Mathews, a commodity strategist at Commonwealth Bank of Australia in Sydney.

US solar panel makers seek duties against China
WASHINGTON, Oct 19 (Reuters) - American solar panel makers asked the U.S. government on Wednesday to impose stiff duties on
Chinese-made solar energy products that they said unfairly undercut prices and destroy thousands of American jobs.
The spat over solar panels, which comes even as the Obama administration faces criticism over its financial backing for bankrupt U.S. solar panel maker Solyndra, marks the latest irritant in relations between the world's two top economies.

US eastern coal ramps up exports: Kimmerle
--Chris Kimmerle is a Reuters market analyst. The views expressed are his own--
NEW YORK, Oct 19 (Reuters) - Rising exports of U.S. coal have helped Eastern coal producers enjoy a good year so far, even though shale gas has been displacing coal in the domestic power market.
On a year-to-date basis, US coal production is running 0.3 percent below last year's volume with Western production off 2.3 percent while Appalachian Basin output is up 1.2 percent and interior production up 3.8 percent.

Brent crude steady at $108, after Wednesday's 2.5 pct plunge
SINGAPORE, Oct 20 (Reuters) - Brent crude held steady at $108, after plunging 2.5 percent in the previous session on worries a failure to come up with a plan to prevent the euro zone's debt crisis from worsening may hurt oil demand growth.
"Investors don't want to take positions until there is a clear sign of a resolution of the debt crisis," said Tetsu Emori, a fund manager at Astmax Co Ltd in Tokyo. "Fundamentally there are factors to support prices, but the economic uncertainty is weighing on sentiment."

PetroChina says faces $7.8 bln in refining losses
BEIJING, Oct 20 (Reuters) - PetroChina , China's second-biggest refiner, said it will suffer refining losses of more than 50 billion yuan ($7.84 billion) this year if fuel prices remain at their current level for the rest of the year.
China's refiners have struggled as a result of a government pricing system which does not allow them to fully pass on their costs to consumers.

Aluminium financing deals could unravel -analysts
LONDON, Oct 19 (Reuters) - Financing deals that have tied up most aluminium inventories in warehouses could unravel as the global economic crisis deepens and banks look to unlock funds, said William Adams, an analyst at Basemetals.com, on Wednesday.
"There is a potential for further problems on the banking side of things, whether it's another banking crisis or a liquidity crisis," Adams said at a Sucden Financial press briefing.

Indonesia says UAE to invest in aluminium smelters
JAKARTA, Oct 19 (Reuters) - The United Arab Emirates (UAE) may make possibly the largest-ever investments in Indonesia's industrial sector by pumping $9.5 billion into aluminium smelter projects in Kalimantan, Indonesia's ambassador to the UAE said on Wednesday.
However, the United Arab Emirates' Ras al-Khaimah emirate,  one of the investors mentioned, has refuted suggestions by the  Indonesian official that it is to invest billions of dollars in an aluminium smelter in Southeast Asia's largest economy.

African Minerals to ship iron ore from end-October
LONDON, Oct 19 (Reuters) - African Minerals Ltd  will start exporting iron ore cargoes to China and Europe from its Tonkolili mine in Sierra Leone at the end of this month, the London-listed metals explorer and developer said on Wednesday.
The company commenced mining iron ore in Sierra Leone in December 2010 and has since stockpiled material. Iron ore exports will start this month, and African Minerals expects to export about 1.2 million tonnes of iron ore during the current fourth quarter.

Iron Ore’s Worst Rout in 15 Months Seen Deepening as China’s Growth Slows
Iron ore’s biggest decline in 15 months may worsen as the economy slows in China, the largest importer, the European debt crisis persists and BHP Billiton Ltd. (BHP) and Rio Tinto Group increase production, analysts said. Ore for immediate delivery may drop to $140 a metric ton by year-end, according to Macquarie Group Ltd. analyst Bonnie Liu in Shanghai. That’s down 5.2 percent from $147.70 yesterday, data from The Steel Index Ltd. show. The price may fall to the mid to low $140s, said Australia & New Zealand Banking Group Ltd. China, the world’s biggest steelmaker, grew at the slowest pace since 2009 in the third quarter on weaker export demand and monetary tightening as steel prices dropped to a 10-month low and port ore inventories held near a record. Cheaper ore -- also sold through quarterly contracts -- may limit profit growth at Vale SA (VALE5), Rio Tinto and BHP Billiton, the largest producers.

Japan Sept crude steel output down 3.8 pct yr/yr
TOKYO, Oct 19 (Reuters) - Japan's crude steel output fell 3.8 percent in September from a year ago, after recording its first rise in six months the previous month, as the yen's strength hurt exports at the country's top two steelmakers, an industry body said on Wednesday.  
September output, which is not seasonally adjusted, came to 8.88 million tonnes, the Japan Iron and Steel Federation said.

Shanghai copper drops by 6-pct limit on economic worries
SHANGHAI, Oct 20 (Reuters) - Shanghai copper hit its 6-percent limit drop while in London prices fell for a fourth straight session on mounting fears that an economic slowdown in the euro zone and United States would erode demand for industrial metals.
"Concerns over macroeconomic continue to override those of fundamentals for copper investors, with the euro zone crisis being the chief worry," said Eric Liu, a trader at CITIC Newedge in Shanghai.

Japan Sept copper cable shipments down 1.6 pct yr/yr
TOKYO, Oct 20 (Reuters) - Japanese copper wire and cable shipments fell 1.6 percent from a year earlier to an estimated 59,500 tonnes in September, an industry body said on Thursday.
Japanese appetite for copper, often seen as a gauge of economic activity and already weak in the wake of the global financial crisis, took a fresh beating after the March earthquake prompted user industries to reduce domestic production.

Japan Sept copper cable shipments down 1.6 pct yr/yr
TOKYO, Oct 20 (Reuters) - Japanese copper wire and cable shipments fell 1.6 percent from a year earlier to an estimated 59,500 tonnes in September, an industry body said on Thursday.  
Japanese appetite for copper, often seen as a gauge of economic activity and already weak in the wake of the global financial crisis, took a fresh beating after the March earthquake prompted user industries to reduce domestic production.

METALS-Shanghai copper drops by 6-pct limit on economic worries
SHANGHAI, Oct 20 (Reuters) - Shanghai copper hit its 6-percent limit drop while in London prices fell for a fourth straight session on mounting fears that an economic slowdown in the euro zone and United States would erode demand for industrial metals.
Market optimism from earlier this week crumbled after French President Nicolas Sarkozy said on Wednesday that Paris and Berlin were at odds over how to increase the firepower of the region's bailout fund.

PRECIOUS-Gold tumbles as euro zone debt worries mount
SINGAPORE, Oct 20 (Reuters) - Gold prices fell about 2 percent, on course for a fourth consecutive session of losses, as investors were spooked by worries whether Europe will achieve a cure for its debt crisis.
Other precious metals also sold heavily, with platinum leading the decline with its biggest daily fall in more than three weeks.

Gold drops 1 pct as euro zone debt worries mount
SINGAPORE, Oct 20 (Reuters) - Gold prices fell 1 percent, on course for a fourth consecutive session of losses, as worries about whether Europe will achieve a cure for its debt crisis spooked investors.
"Every commodity is falling as market participants turn pessimistic over what is happening in Europe," said Hou Xinqiang, an analyst at Jinrui Futures in China.

20111020 1047 Global Market & Commodities Related News.

GLOBAL MARKETS-Stocks, euro decline as EU summit hopes slip
NEW YORK, Oct 19 (Reuters) - U.S. stocks fell and the euro edged lower on Wednesday after optimism faded that European leaders will make substantial progress on resolving the euro zone debt crisis at their summit meeting this weekend.
"At the end of the day, the market is nervous, waiting to see anything substantial coming out of the summit," said Tom Fitzpatrick, chief technical strategist at CitiFX in New York. "We are getting to a point that there have been so many false promises so they really need to deliver something big."

Asia Stocks Headed for Lowest in a Week on Europe Debt Wrangling (Bloomberg)
Asian stocks slid, with the benchmark regional index headed to its lowest close in more than a week, amid uncertainty about European bailout-fund talks and as U.S. companies grew more pessimistic about the outlook for the world’s largest economy. Sony Corp. (6758), Japan’s No. 1 exporter of consumer electronics that gets 21 percent of its sales in Europe, fell 1.2 percent. BHP Billion Ltd., the world’s biggest mining company, dropped 2.1 percent as commodity prices dropped. Newcrest Mining Ltd. (NCM), Australia’s largest gold mining company, sank 5.7 percent after saying gold output fell 13 percent from a year earlier in the three months to Sept. 30. The MSCI Asia Pacific Index sank 1.2 percent to 115.98 as of 10:54 a.m. in Tokyo, with more than two stocks falling for each that gained.

COMMODITIES-Copper dives on Europe; oil, soybeans follow
NEW YORK, Oct 19 (Reuters) - Copper slid on Wednesday, closing with its biggest loss in three weeks, and crude oil prices tumbled too on worries that European leaders might fail to contain a worsening debt crisis.
"We are seesawing with global sentiment... the market is completely preoccupied by the whole euro zone story," said Andrey Kryuchenkov, commodities analyst with Moscow-based VTB Capital. "We will have this uncertainty until the Oct 23 crisis summit, when we expect they will announce some kind of coherent plan."

Crude sinks as Europe woes outweigh US stock draw
NEW YORK, Oct 19 (Reuters) - Crude oil futures slumped more than 2 percent on Wednesday, with an afternoon sell-off driven by concern that European leaders could fail to contain a worsening euro zone debt crisis.
"The (oil) market is still totally dominated by Europe (and) talks that plans for the bailout package have stalled again kicked us right off the cliff," said Mark Anderle, trader at TAC Energy in Dallas, Texas.

Natural gas ends up, short cover, weather back gains
NEW YORK, Oct 19 (Reuters) - U.S. natural gas futures ended higher on Wednesday, driven by short-covering after two straight losing sessions and defying concerns about steadily growing supplies ahead of Thursday's inventory report.
"I think this (move up) was just a little short-covering, but (excess) supply is still the problem, and we need to get some (cold winter) weather early," a Texas trader said, adding prices could sink below $3 if winter does not show up early.

Euro Coal-Prices fall in thin trading
LONDON, Oct 19 (Reuters) - Prompt physical coal prices on Wednesday continued the week's downward trend on a day of minimal activity.
"On the economic front, things aren't going to improve much even if we can avoid a double-dip recession, so that implies a sideways or downward movement as physical demand continues to drop or remains flat, while the supply side of coal looks good as a repeat of last year's floods in Australia is unlikely," one coal trader said.

20111020 1029 Local & Global Economic Related News.

The government will review the household income limit eligibility for the  My First Home Scheme, Deputy Finance Minister Datuk Donald Lim Siang  Chai said. The review is in line with the announcement in the 2012 Budget,  which raised the loan limit under the scheme to RM400,000 from RM220,000.  "The eligibility limit is now RM3,500 and we are looking at around  RM6,000 to RM7,000," he said.  The discussions on the matter are still ongoing and the ministry is  waiting for feedback from banks regarding the proposal, he added.  (Bernama)

The government is looking at raising the income limit eligibility for the  My  First Home Scheme with the details of the review expected to be announced  next week. Deputy Finance Minister Datuk Donald Lim said the ministry was  awaiting feedback from designated banks. "The eligibility limit is now  RM3,5000 and we are looking at around the region of RM6,000 to RM7,000,"  he said. Lim said the review was in line with the announcement by PM Datuk  Seri Najib Razak in the 2012 Budget, which raised the loan limit under the  scheme from RM200,000 to RM400,000." (NST)

Malaysia has secured  infrastructure projects worth a whopping RM10bn  in Bangladesh to be implemented beginning early next year over a period of  between two and five years, said Malaysia's Special Envoy, Datuk Seri S.Samy  Vellu. Kuala Lumpur and Bangladesh inked a Memorandum of Understanding  (MOU) to facilitate the implementation of the projects on 18 Oct.  The first project involving the construction of 161 blocks of 16-storey  apartments, worth almost RM3bn, in Uttara near Dhaka would  commence early next year.  Another project that would take off next year would be the 10.8km  four-lane Poltan-Mawa Road flyover project worth RM1bn.  Samy Vellu said other projects include the construction of affordable  housing for squatters and a new satellite township on a 400 hectare  land at Kamrangichar and another similar development in  Mohammadpur. (Bernama)

Malaysia is on track to achieve the target of 4.7% growth in  labour  productivity this year, said International Trade and Industry Deputy Minister  Datuk Mukhriz Mahathir. The productivity level or output per employee last  year at US$13,577 (RM42,089) was 3.3 times higher than China's and 4.7 times  higher than Indonesia's. (Bernama)

The shared services and outsourcing (SSO) sector is expected to grow at  about 25% p.a. until 2020, Human Resources Minister Datuk Seri Dr. S.  Subramaniam said. Last year, the size of the sector was RM3.8bn and currently  almost 140 foreign and 60 local companies perform various SSO activities in  Malaysia, ranging from information technology (IT), business process and  knowledge process outsourcing.  The availability of skilled workers, competitive cost and an ideal  business environment were some of the attractive ingredients for the  foreign companies to pick Malaysia as their SSO location, he said.  (Bernama)

The last leg of the multi-billion ringgit double-tracking and electrification  rail project from Gemas to Johor Baharu is expected to be completed in 2016,  said Transport Minister Datuk Seri Kong Cho Ha. Work on the Gemas-JB  portion was expected to take off next year with tenders to be called soon as the  design of the project was almost completed.  "The completion of the final package will also complete the link with  Thailand in the north and Singapore in the south," he noted.  On the other hand, the route between Ipoh-Padang Besar would be  completed by end-2013 and the Seremban-Gemas line by next year.  (Bernama)

Malaysia will embark on a digital transformation programme,  Digital  Malaysia, which will rank as one of the key components in the country’s  transformation policy. PM Datuk Seri Najib Tun Razak said with the target set  for Digital Malaysia to contribute RM75bn to the GNI by 2020, together with  the RM93bn to be generated from information, communication and technology  initiatives as well as the estimated RM126bn to be extracted from ICT projects  under the GTP and ETP.  The contribution by ICT initiatives to the country’s GNI is targeted to  reach RM294bn by 2020. The government hoped to increase its ICT  contribution to the GNI, which is at 9.8%, to 17% by 2020. (NST)

Malaysia moved up five notches in the annual global ranking to become one of  the top five economies in Asia on the ease of doing business, according to  World Bank Doing Business Report for 2012. The report ranked  Malaysia as fifth in Asia after Singapore (1st) and Hong Kong (2nd). Overall, Malaysia was at the 18th position, ahead of Germany (19th), Japan (20th), Taiwan (25th), Switzerland (26th) and France (29th). (NST)

US mortgage applications decreased 14.9% from one week earlier, according  to data from the Mortgage Bankers Association’s (MBA) survey for the week  ended 14 Oct. The refinance index decreased 16.6% from the previous week. The  seasonally adjusted purchase index decreased 8.8% from one week earlier and is  at the lowest level in the survey since Dec 96. (MBA)

The US consumer price index increased 0.3% mom in Sep (+0.4% in Aug)  on a seasonally adjusted basis, the Bureau of Labor Statistics reported. On a yoy  basis, the all items index increased 3.9% (3.8% in Aug) before seasonal  adjustment. The readings matched economists’ expectations. (Bloomberg)

US housing starts climbed 15% to  an annual rate of 658,000 houses in Sep  (572,000 in Aug), the most since Apr 10, Commerce Department figures showed.  Economists called for a 590,000 pace.  (Bloomberg)

US privately-owned housing units authorized by  building permits fell 5.0%  mom to a seasonally adjusted rate of 594,000 in Sep (625,000 in Aug).  Economists expected the reading to fall by 3.9%. (Bloomberg)

US: Fed reports modest growth as firms voice doubt on recovery
The Federal Reserve said consumer spending rose slightly last month and the economy maintained its expansion, even as companies reported more doubt about the strength of the recovery. (Bloomberg)

US: Home starts jump, consumer prices stabilize
Builders began work on more US homes than forecast in September and consumer prices climbed at the slowest pace in three months, supporting Federal Reserve forecasts for a pickup in growth and a moderation in inflation. Housing starts jumped 15% to a 658,000 annual rate, the most since April 2010 while the cost of living climbed 0.3% from August. (Bloomberg)

The eurozone’s current-account deficit narrowed to €5bn (US$6.88bn) in  Aug from €6.8bn in Jul. (WSJ) Eurozone construction grew 0.2% mom in Aug (+1.8% in Jul), the Eurostat  said. On a yoy basis, output increased 2.5%. (Bloomberg)

South Korea and  Japan announced they will increase a  currency-swap accord to US$70bn (from $13bn) amid uncertainty over Europe’s fiscal woes  and the global economy. The measures include a one-year, US$30bn dollar  swap line and a won-yen agreement of the same amount, according to a  statement released by the Bank of Korea and Finance Ministry. (Bloomberg)

Bank of Thailand kept interest rates unchanged at 3.5% for the first time  this year, ending its longest series of increases since 2006, amid a weakening  global growth outlook and worsening floods. The decision came in line with  market expectations. (Bloomberg)

Foreign direct investment  (FDI) in  China gained 7.9% yoy in Sep to  US$9bn (+11.1% in Aug), the Ministry of Commerce said. FDI in 9M11 rose  16.6% yoy to US$86.7bn (+17.7% in 8M11). (Bloomberg)

Conference Board said that China’s leading index increased 0.5% mom to  159.5 in Aug, slower than a 0.6% rise in Jul. The coincident index gained 0.5%  mom in Aug to 207.1, following a 0.4% increase in Jul. (Conference Board)

About 600,000 workers are temporarily jobless after  floods swamped their  factories, Somkiat Chayasiwong, permanent secretary for the Labor Ministry,  said. It will take about 40 days for the 12bn cubic meters of water to drain into  the Gulf of  Thailand, Irrigation Department spokesman Boonsanong  Suchatpong said. (Bloomberg)

New vehicle sales in  Thailand rose 27.5% yoy in Sep to 87,012 units  (+20.3% in Aug). In 9M11, sales rose 20.6% yoy to 670,969 units. (Dow Jones)

The Philippines’ balance of payments (BOP) surplus in Sep fell 73.6%  mom to US$719m from US$2.72bn in Aug. The BOP was US$9.72bn in 9M11,  more than the Bangko Sentral ng Pilipinas' full-year surplus estimate of  US$6.7bn, and was supported by inflows from portfolio investments, exports  and remittances. Last year, the Philippines posted a record BOP surplus of  US$14.3bn. (Reuters)

Money supply in India grew 16.2% yoy in Oct. M3, which mainly comprises  currency in public circulation bank deposits and money invested in other saving  plans, stood at INR69.6tr (US$1.41tr) as on 7 Oct. India’s reserve money  outstanding rose 12.8% yoy, or INR1.6tr to INR13.8tr. (Bloomberg)

Finance Minister Pranab Mukherjee warned that  India’s economic growth for the year ending in March may undershoot the government’s earlier  projection of 9%. He also warned that it will be a “challenge” to meet the  government’s budget deficit target of 4.6% of GDP. India’s debt to GDP  ratio may reach 44.2% for the year ending in March, R. Gopalan, secretary in  the Department of Economic Affairs in the finance ministry, said. (Bloomberg)

China Banking Regulatory Commission Chairman Liu Mingkang said recent  stress test shows that  banks can take as much as 40% decline in property  prices. (Bloomberg)

Spain: Rating cut by Moody’s for third time since 2010
Spain’s credit rating was cut for the third time in 13 months by Moody’s as Europe’s debt crisis threatens to engulf the nation. Moody’s yesterday reduced its ranking to its fifth-highest investment grade, cutting it by two levels from Aa2 to A1, with the outlook remaining negative. (Bloomberg)

UK: Economy will fail to pick up in fourth quarter according to BoE
Bank of England (BoE) policymakers agree that Britain's stalled economy will fail to pick up in the current fourth quarter, according to minutes of their last meeting published on Wednesday. The forecast comes as the BoE minutes showed that members of the Monetary Policy Committee voted unanimously at the October meeting to pump GBP175bn into the British economy. The committee warned that "available indicators suggested that the underlying rate of growth... would be close to zero in the fourth quarter". (AFP)

Greece: Papandreou faces austerity vote as Athens braces for clashes
Greek Prime Minister George Papandreou is set to risk further social unrest over a new round of austerity measures that he needs to convince euro-area leaders that Greece will hold to its bailout program. The package comprises tax rises, cuts to pensions and wages and plans to dismiss 30,000 state workers, plus provisions to break the collective pay-bargaining power of Greek unions. (Bloomberg)

Brazil: Cuts rate to 11.5% on Europe crisis, slowing growth
Brazil’s central bank cut borrowing costs by half a point for a second straight meeting, as growth in Latin America’s biggest economy slows amid Europe’s sovereign debt crisis. The bank’s board voted unanimously to reduce the benchmark Selic rate to 11.5% from 12%. (Bloomberg)

20111020 1028 Malaysia Corporate Related News.

Tenaga Nasional Bhd may report next year a full-year loss for the first time  in more than a decade because of rising costs.  The company this month will  post a second, straight quarterly loss as its rising fuel bill is hurting margins,  CEO Che Khalib Mohamad Noh said.  Tenaga may have to borrow to fund operational expenses for the first  time as its cash holdings are dwindling, Che Khalib said. “We have to  incur an additional cost of RM400m every month to use the alternative  fuel. We are crying for help. If the situation isn’t resolved, Tenaga will  report a loss in 2012.”  The utility is set to market its 4.85bn Islamic bonds on Oct. 24 to  finance the expansion of a coal-fired power plant in Perak, north of  Kuala Lumpur, he added. (Bloomberg)

Prime Minister Datuk Seri Najib Razak and Indonesian President Susilo  Bambang Yudhoyono are expected to discuss the waiver of  crude palm oil  (CPO) taxes in both countries.  If both leaders were to agree to this proposal  during  their bilateral meeting in Lombok, Bali today, oil palm planters in  Malaysia and Indonesia, and some six million smallholders, will benefit from  higher palm oil prices.  Current high CPO taxes in Malaysia and Indonesia have caused refiners  to slash prices in order to compete, and this, in turn, has lowered the  CPO prices.  "The leaders will deliberate on the proposal to lift the high  CPO taxes on both sides. It is on the agenda," a reliable source said.  (BT)

Proton  has offered the storage facility at its  Tanjung Malim plant to  automakers in Thailand affected by the flooding there. “We are open for  negotiations anytime,” its group manag­ing director, Datuk Seri Syed Zainal  Abidin Syed Mohamed Tahir said. On Proton’s operations in Thailand, Syed  Zainal Abi-din said the company’s 34 sales outlets in the country were not badly  affected. (Bernama)

UMW Lubricant International, a wholly-owned unit of UMW Holdings,  expects its newly-unveiled Repsol range of lubricants to capture 3% market  share by end-2012. "With Repsol, we can now penetrate into the high-end and  specialised vehicles segments. This will complement our existing brands, which  are more focused on the medium- and entry- level segments," said Datuk Syed  Hisham Syed Wazir president and group CEO of UMW Holdings. The company  plans to produce Repsol lubricants in Malaysia by as early as first-half next year.  (BT)

Nasim, the exclusive distributor of the  Peugeot brand in Malaysia, has  launched the Peugeot 508, marking a new chapter for both Nasim and the  Peugeot brand in the premium executive segment. The 508, with an on-the-road  price of RM169,888 has been billed as one of the most highly-anticipated  launches of the year and has already received over 100 bookings prior to its  launching. (Malaysian Reserve)

Tightening rice supply in top exporter Thailand due to floods and defaults by  Vietnam as prices jump could prompt Indonesia, Africa and the Middle East to  delay imports until the market steadies, or seek cheaper options from India and  Pakistan. International traders and government officials meeting in Vietnam  this week will also assess the full impact of flooding on output in the top two  exporters, whether prices will escalate further, and the demand outlook for  typhoon-hit Philippines. Thai and Vietnamese rice rose after the Thai government began buying  paddy from farmers on October 7 at 15,000 baht (RM1,520) a tonne,  nearly double local prices in June, and export rates climbed further as  Thailand’s worst floods in 50 years inundated farms and mills. Thai  benchmark 100 per cent B grade white rice hit US$680 (RM2,120) a tonne, while Vietnam’s 5 per cent broken rice rose to US$590 a tonne,  the highest in more than three years.
“Vietnamese rice prices will be stable at the current level till the  year-end as stocks are low,” said Nguyen Trung Kien, deputy chairman  of the Vietnam Food Association.
Thai benchmark prices could be pushed to around US$850,  exporters said, but traders and analysts did not expect levels to soar  above US$800 immediately, as some exporters would offer rice from  their stocks at lower levels. (Reuters)

Malaysia is looking to buy up to 3m tonnes of  raw sugar over a three-year  period starting in 2012 to replenish stocks, dealers said. Up to nine trading  houses were invited to offer prices last week, but no deals were struck, said the  dealers. They added that Malaysia wanted to buy the sweetener at below market  price. The country consumes about 1.3m tonnes of sugar a year. (Reuters)

Newcomer  Nilamas Corp has secured all the requisite licenses from the  government to offer digital cable TV in the country and it is targeting the launch  of its offering in 2Q12. Nilamas will compete in the pay-TV space, which has  Astro and several IPTV providers including Telekom. Nilamas planned to offer entertainment and education programmes  with an interactive focus. The company was also in talks with numerous  content providers but added that it might find it difficult to secure  content already sold to competitors. As for its network, Nilamas would use fibre for its back-haul which will  be leased from fibre operators such as TM, Time dotcom, Tenaga,  Fiberail and Fibercom. (Star Biz)

Felda Holdings has shortlisted 15 investment banks to undertake the listing  exercise of Felda Global Ventures Holdings (FGVH). The final decision will  be made this week. It is believed that four investment banks, comprising two  local and two international banks would be required to handle the IPO, to be  launched around mid next year. (Bernama)

Kurnia Asia is still in talks with interest parties regarding a possible M&A  following news in the last few months that the company was looking at selling  its insurance arm. Chairman,  Datuk Dr Sharifuddin Wahab said whether  the parties are local or foreign, Kurnia is alright (for negotiations) as long as it  gets an attractive deal at the end. (Financial Daily)

The Asia retail arm of  Parkson Holdings is planning to raise up to S$200m  (RM492m) in a Singapore IPO. Parkson Retail Asia, a department-store  operator with operations in Malaysia, Vietnam and Indonesia is looking to sell  shares at an indicative price of S$0.935 to S$1.07 each.  HSBC has been appointed the sole global coordinator and issue  manager for the offering.  CIMB and HSBC are the joint bookrunners  and underwriters, while CLSA is the co-lead manager. (Reuters)

The government needs to consider implementing a "temporary termination" on  the development of  new shopping malls in high-growth areas, said the  Malaysian Association for Shopping and Highrise Complex Management (PPK).  Its president HC Chan said there is an oversupply of shopping malls in the country, particularly in Kuala Lumpur, Selangor, Penang, as about 75% of the  malls in Malaysia are located in these areas. (Bernama, Financial Daily)

YTL Corp spent RM26.75m on a share buyback exercise yesterday. The  diversified flagship of the YTL group acquired 18.04m shares at RM1.48 a share.  (Malaysian Reserve)

Sinaria Corporation has proposed to seek approval from its shareholders to  purchase up to 10% of its own paid-up share capital. (BMSB)

AT Systematization announced that its wholly-owned subsidiary,  Automation Technology Systematization Industries Limited (ATSI) located at  Pathumthani, Thailand, has temporarily shut down the operations of its  manufacturing facilities from Oct 13 due to the unexpected severe flood  condition in Thailand.  Presently, the premises of ATSI are not affected by flood but have been  forced to shut down as its workers were unable to turn up for work due  to the crippled transportation system. (BMSB)

Sozo Global Ltd is investing RM15m to set up a halal processing plant in  Malaysia, says CEO Shen HengBao. The company hopes to conclude land  acquisition by year-end and the plant construction will start in early 2012. Sozo  is still looking to identify a location that has access to ports and workforce, as  well as the assistance of the authorities, he told reporters at a media briefing  yesterday. It is likely that the plant would be located in Penang. Sozo has signed a  MOU with the Malaysian Halal Development Council. Shen said the  company is currently setting up its third plant in China, specifically for  halal products.(Bernama)

Wijaya Baru Global (WBG), which has clinched a deal to log and clear  80,000 hectare of land in Indonesia to make way for an oil palm plantation, will  seek partners for the cultivation venture. CEO Datuk Faizal Abdullah said the  company is in talk with Malaysian entities for a possible joint venture. (BT)

Hai-O Enterprise Bhd expects a better performance for the financial year  ending April 30, 2012, with the anticipation of better sales for its core products  in the health, beauty and fashion range. Managing Director Tan Kai Hee said  Hai-O was confident earnings would improve despite the multi-level-marketing  (MLM) industry being highly regulated by the government. The company would  focus on products that would give the company recurring sales over the  long-term and revamp its marketing programmes.  Tan also said the implementation of stricter new membership  guidelines in the MLM industry had resulted in less new members and  lower revenue and earnings. "We have also been revamping our  marketing programmes to emphasize on product knowledge," Tan said.  (Bernama)

Bonia unit buys Cheras properties for RM44.29m
Bonia Corporation is acquiring properties in Cheras for a total of RM44.29m to facilitate its future expansion plans and to reduce rental expenses. It said on Wednesday, 19 Oct that its wholly owned subsidiary Luxury Parade SB had entered into 15 sale and purchase agreements with Platinum Starhill SB to acquire freehold units in two blocks in Cheras. (Financial Daily)

Lynas in the dark over licence decision
Lynas Corp said yesterday it was not aware of any decision by the Malaysian authorities not to grant the company pre-operating and import licences of rare earth into the country. It told the Australian Securities Exchange that as far as it was concerned, the decision on the licences was not expected in some weeks. "As far as Lynas is aware, no decision has been made by the Malaysian authorities concerning the pre-operating licence and the importation of rare earth ores into Malaysia," it said in the filing. The International Trade and Industry Ministry and the Science, Technology and Innovation Ministry, in a joint statement on Monday, said Lynas had not been issued a licence nor given permission to ship rare earth ores into Malaysia. (BT)

Lynas is already producing rare earths concentrate at Mount Weld in Western  Australia but  the group’s refinery on the east coast of Malaysia “is  running a bit late”. Crucial to Lynas entering production is for the Malaysian  government to issue the Australian group with an operating licence. That  process has been bogged down by political opposition to the plant and local  community protests worried about possible radiation leaks. Lynas on  Wednesday said a decision had not been reached on the application. Shares in  the company fell 9.9 per cent to A$1.09 in Sydney.  The International Atomic Energy Agency this year conducted an  independent review into the plant. “They came out and said it was a safe  process and made some recommendations that Lynas has agreed to  comply with,” according to the executive chairman, Nick Curtis.  Assuming approval is granted in the coming months, Lynas could ship  first product in the second quarter of next year. (Financial Times)

Kencana expands Lumut yard
Kencana Petroleum is in talks to acquire more than 130 acres beside its fabrication yard, in Lumut Perak, sources said. It is understood that Kencana is close to sealing the deal, which could see the company substantially increase its yard space to enable it to take on larger jobs. It is still not clear which parties Kencana is in negotiations with, but among its neighbours is Lumut Maritime Terminal SB (LMT), whch is 50% plus one share controlled by the Perak government. (Financial Daily)

Harvest Court MD to buy Affin stake
Harvest Court Industries Bhd managing director Ng Swee Kiat has submitted a proposal to buy Affin Bank Bhd’s stake in the group at 20 sen per share. In a filing to Bursa Malaysia, the group said Ng, its second-largest shareholder, has proposed to buy Affin’s 31.4 million shares and 7.9 million warrants through a put option agreement. Currently, Affin is Harvest Court’s biggest shareholder with a 18.27% stake in the group. (StarBiz)

20111020 0959 Renewable Energy Related News.

TEXAS SETS WIND POWER RECORD AS COASTAL WIND GROWS
HOUSTON, Oct 18 (Reuters) - Texas set a new record for wind-power output earlier this month as coastal wind farms start to play a bigger role in supplying electricity to the state, the grid operator said in a report.
The amount of electricity produced from wind on the afternoon of Oct. 7 set a record at 7,400 megawatts, more than 78 percent of the 9,400 MW of installed wind capacity in the Electric Reliability Council of Texas (ERCOT).

CHINA SEPT POWER OUTPUT SUSTAINS DOUBLE-DIGIT GROWTH
BEIJING, Oct 18 (Reuters) - China's power generation increased 11.5 percent from a year earlier to 386.1 billion kilowatt-hours in September, the National Bureau of Statistics said on Tuesday.
It is the eighth consecutive month that electricity output has expanded at a double-digit pace after sinking into single digits late last year when Beijing launched a campaign to cap energy use.

SUNTECH SEES STRONGER U.S. SOLAR GROWTH
DALLAS, Oct 17 (Reuters) - Suntech Power Holdings Co Ltd  expects U.S. solar installations to reach a record 2 gigawatts this year, even as demand from the German market stumbles, a Suntech executive said on Monday.
Solar companies have been betting that the United States could become the world's largest market in the next few years, replacing Germany in the top spot as Berlin trims subsidies there.

RAM POWER EXPECTS NICARAGUA PLANT'S COMMERCIAL OPS IN DEC
Oct 17 (Reuters) - Canada's Ram Power Corp  said commissioning for Phase I expansion of its geothermal power plant at San Jacinto-Tizate, Nicaragua, has begun, and the unit is expected to start commercial operation in December.
The San Jacinto-Tizate project had earlier encountered construction delays and was also facing higher material and labor costs.

CHINA OFFICIALS PROPOSE SEASONAL SURCHARGE TO EASE POWER SHORTAGE
BEIJING, Oct 17 (Reuters) - China should impose seasonal power price surcharges on big industrial users and subsidise power generating firms to ease power shortages, government officials said in remarks published in China Energy News on Monday.
Speeding up reform and unleashing market forces in price-setting is the fundamental cure for power shortages, the officials told the industry newspaper run by the People's Daily.

RENEWABLE ENERGY GEN SAYS WIND CAPACITY TO RISE
LONDON, Oct 17 (Reuters) - Renewable Energy Generation (REG)  is looking to grow its operational wind capacity by more than 35 percent in 2012 on the back of continued government support, the wind farm developer's chief executive said.
"At the very least, our operational wind capacity will rise from 41.15 megawatts (MW) to about 56-57 MW next year," Andrew Whalley told Reuters on Monday.

CHINA SEPT HYDROPOWER AND WATER STOCKS SLUMP -NDRC
BEIJING, Oct 15 (Reuters) - China's hydropower output slumped in September as water stocks dwindled, government data showed, suggesting regions relying on it may have to struggle for supplies as winter approaches.
National hydropower output in September fell 24.5 percent from a year earlier to 56.87 billion kilowatt hours, while water stocks used by key hydro stations declined 18.5 percent to 104.9 billion cubic metres at the end of last month, the National Development and Reform Commission said.

BLAME THE WEATHER FOR YOUR ENERGY BILL
LONDON, Oct 14 (Reuters) - Greater reliance on solar, wind and hydro power means that utilities can now blame extreme weather for high electricity and gas bills, a meteorologist at global forecaster WSI told Reuters.
Drought, freezing weather and heavy clouds can all hit household budgets as they restrict output from renewable energy plants.

WINTER TO SEE LOW WIND, HYDRO POWER IN N.EUROPE
LONDON, Oct 14 (Reuters) - Europe faces a colder, dry winter in the north with milder, windy and wet weather in the south thanks to the effects of the dominant weather pattern, a leading energy weather forecaster told Reuters.
A negative North Atlantic Oscillation (NAO) will continue to dominate the continent's winter weather patterns, World Climate Service's senior meteorologist Richard James said in an interview.

GENERAL ELECTRIC PICKS COLO. FOR SOLAR PANEL PLANT
Oct 13 (Reuters) - General Electric Co  on Thursday said it has selected Colorado as the location for a solar panel factory that will create 355 jobs in that state.
The 400-megawatt plant is part of a $600 million investment GE said it would make in its solar business earlier this year.

NTT UNIT TO OFFER REPAIRS FOR BIG SOLAR PLANTS- NIKKEI
Oct 14 (Reuters) - NTT Facilities Inc, a unit of Nippon Telegraph and Telephone Corp , plans to start service offering to monitor and maintain mega solar plants, the Nikkei business daily reported.  
The service, scheduled for next spring, will prevent the deterioration in performance that can reduce power output of a solar plant by about 15 percent over about a 17-year life, the paper said.

DEEPWATER TO BUILD FIRST U.S. OFFSHORE WIND FARM
Oct 12 (Reuters) - Deepwater Wind is racing to build the first U.S. offshore wind farm off Rhode Island and hopes to parlay that into a string of East Coast farms that could partially replace embattled nuclear power plants.
The privately held U.S. wind power developer plans to begin construction of the $205 million, 30-megawatt Block Island project in 2013 or 2014, ahead of a farm proposed by Cape Wind which had been expected to be the nation's first offshore facility, according to Deepwater's CEO.

JEFFERIES STARTS GT ADVANCED WITH UNDERPERFORM
Oct 12 (Reuters) - A weakness in demand for solar energy products and competition from low-cost Asian competitors will weigh on GT Advanced Technologies , Jefferies said, and initiated coverage on the solar equipment maker with an "underperform" rating.  
Shares of the company fell 8 percent in early trading to $7.11 on Wednesday on Nasdaq.

DEEPWATER PICKS SIEMENS WIND TURBINES FOR BLOCK ISLAND
NEW YORK, Oct 12 (Reuters) - Privately held U.S. offshore wind power developer Deepwater Wind agreed to buy 6-megawatt wind turbines from German multinational Siemens  for its Block Island wind farm off Rhode Island.
The 30-MW Block Island wind farm remains on track to be the nation's first offshore wind farm, the Providence, Rhode Island Deepwater said.

20111020 0958 Biofuels Related News.

ARGENTINA TO HIKE BIODIESEL OUTPUT BY 2015-EXECUTIVE
AVELLANEDA, Argentina, Oct 18 (Reuters) - Argentine biodiesel production will nearly triple by 2015 to 7 million tonnes per year, an executive at one of the country's leading agro-industrial companies told Reuters on Tuesday.
Argentina is one of the world's biggest exporters of biodiesel, producing the fuel from ample supplies of soybean oil, and production has skyrocketed in recent years.

MCCAIN MEASURE WOULD STOP AID FOR US ETHANOL PUMPS
WASHINGTON, Oct 18 (Reuters) - U.S. Senator John McCain offered an amendment on Tuesday to an agriculture bill that would prevent the government from subsidizing new service station pumps that would boost the sale of ethanol for motor vehicles.
McCain's amendment would prevent the federal government from funding so-called "blenders' pumps" in the 2012 agriculture appropriations bill, which could be voted on as soon as later on Tuesday.

BIOFUELS GROWTH STIFLED BY EU POLICY DELAYS -BP
LONDON, Oct 18 (Reuters) - Biofuels for use in transport are becoming more competitive compared with oil but the pace of growth has slowed due to a lack of regulation and sustainability standards in Europe, the chief executive of BP's  biofuels division said.
"In the UK, biofuels get no tax breaks whatsoever. The biggest obstacle (to biofuel growth) is uncertainty around the future of mandates and clear (European Union) sustainability standards," Philip New of BP Biofuels told Reuters in an interview on Tuesday.

BOOMING ETHANOL BIZ ALTERS CORN USE PATTERNS-USDA
CHICAGO, Oct 17 (Reuters) - U.S. Agriculture Department officials faced a day of criticism over recent forecasts that have roiled the grains market, saying that the explosive growth of the ethanol sector had upended traditional patterns.
The robust growth of the ethanol sector in the last few years has altered the structure of the U.S. corn market and is complicating the government's efforts to gauge feed use, the U.S. Agriculture Department said.

BRAZIL'S BIG NEW POLICY RISK: IMPROVISATION
BRASILIA, Oct 14 (Reuters) - Creativity and improvisation have long been the most celebrated trademarks of Brazilian soccer teams.
For governments, though, those traits are less desirable. President Dilma Rousseff's willingness to make sudden, unexpected changes to economic policy is becoming one of the biggest risks of doing business in Brazil, a trend that officials tell Reuters is likely to continue in coming months.

ORIGINOIL TO ISSUE LICENCES FOR ALGAE KNOW-HOW
AMSTERDAM, Oct 14 (Reuters) - U.S.-based OriginOil , which has developed ways to harvest algae as biomass, sees potential for the tiny plants to be used to cut carbon emissions in the production of biofuels, plastics and fertilisers, the chief executive said on Friday.
The development of algae as a form of biofuel has been held in check by the high cost and technical difficulty of extracting the oil ingredients.

COLUMN-EU MUST TAKE LONG LOOK AT BIO-ENERGY CO2 EMISSIONS-GERARD WYNN
(Gerard Wynn is a Reuters market analyst. The views expressed are his own.)
LONDON, Oct 12 (Reuters) - The European Union's efforts to establish the full carbon emissions from burning bio-energy is an all but impossible task which illustrates the difficulty of trying to cut humankind's environmental impact, which first has to be measured.
The complexity of trying to link energy crops including corn for ethanol on one side of the planet with carbon emissions on the other is a tangled web of cause and effects which might recall an equation in atmospheric physics.

20111020 0957 Global Market Related News.

Global Recession Likely If Euro Crisis Stays, Nobel Winner Mortensen Says (Source: Bloomberg)
A global recession is likely if the European debt crisis isn’t resolved within a year, the Nobel Prize-winning economist Dale Mortensen said. “If the Europeans can’t solve the problem within a year, we are likely to have another worldwide recession,” Mortensen said at a press briefing in Taipei today. “So it’s very important for all of us to resolve that problem in the short term.” Spain’s credit rating was yesterday cut for the third time in 13 months by Moody’s Investors Service as Europe’s sovereign debt crisis threatens to engulf the nation. German Chancellor Angela Merkel said yesterday that an Oct. 23 European Union summit will mark an “important step,” though not the final one in solving the debt crisis.

Asian Stocks Fall Amid Europe Divisions; Commodity Shares Drop (Source: Bloomberg)
Asian stocks slid, with the benchmark regional index set to erase its weekly gain, as a split emerged between France and Germany over European bailout fund talks, spurring concerns about a slowdown in the global economic recovery. Sony Corp. (6758), Japan’s No. 1 exporter of consumer electronics that gets 21 percent of its sales in Europe, fell 0.9 percent. BHP Billion Ltd., the world’s largest mining company, dropped 1.6 percent as commodity prices dropped. Newcrest Mining Ltd. (NCM), Australia’s largest gold mining company, sank 4.6 percent after saying gold output fell 13 percent from a year earlier in the three months to Sept. 30. The MSCI Asia Pacific Index sank 0.6 percent to 116.67 as of 9:24 a.m. in Tokyo, with more than two stocks falling for each that gained. The measure dropped 15 percent this year through yesterday.

US Concerned About China Internet Restrictions, Food Safety Rules (Source: CME)
The U.S. continued to put pressure on China to address concerns about unfair trade practices, lodging new complaints about Internet restrictions and food-safety rules that hurt access to the Asian giant's market. Trade officials used the World Trade Organization to try to leverage action from Beijing, though the latest efforts don't necessarily represent a move toward a more formal dispute case with the world trade body. U.S. Trade Representative Ron Kirk warned that China's Internet restrictions could be hurting U.S. businesses seeking access. Citing concerns among U.S. companies about periodic disruptions to their sites in China, Kirk said the administration is seeking detailed information through WTO rules on the trade impact of Chinese policies that may block U.S. websites.
"Some companies based outside China have faced challenges offering their services to Chinese customers when their websites are blocked by China's national firewall," Michael Punke, U.S. ambassador to the WTO, wrote in a letter to his Chinese counterpart in Geneva. The U.S. is using WTO transparency requirements to get details on how China's Internet policies affect trade in services. "We hope to follow up bilaterally with China to clear up any questions that remain after we receive their response," Carol Guthrie, spokeswoman for the U.S. Trade Representative's office, told Dow Jones Newswires.
Meanwhile, the U.S. issued a statement in Geneva calling for China to live up to commitments it made when joining the WTO a decade ago to ensure that any sanitary or phytosanitary measures are based on science and don't discriminate against other countries' agriculture and food products. Such rules--ostensibly imposed to ensure the safety of food for consumers and to protect plants and animals from disease--have acted as non-tariff barriers, the U.S. Trade Representative's office said. "While trade in agricultural goods has expanded significantly since China's accession to the WTO, a variety of non-tariff barriers, particularly in the area of SPS measures, have impeded access to China's market over the past 10 years," it said. In addition to ongoing bans on U.S. beef and poultry from several states, the U.S. said "serious concerns continue to arise," like China's new food registration requirements that apply only to imports.
Earlier this month, Kirk requested through the WTO that China disclose details on nearly 200 government subsidies to ensure they comply with global trade rules, and in September took the first step toward filing a case over chicken duties Beijing imposed in retaliation for U.S. tariffs on Chinese tires. The moves come as the Obama administration is under increasing pressure from Congress to take a more aggressive posture against its No. 2 trading partner. The Senate recently passed a bill that would require the Treasury and Commerce departments to take action against an undervalued currency. Despite expressing misgivings about the bill, which faces an uncertain future in the House, President Barack Obama took the rare step of accusing China of manipulating the yuan.

Consumer Prices Rise at Slow Pace (Source: Bloomberg)
The cost of living in the U.S. rose in September at the slowest pace in three months, signaling inflation may moderate as Federal Reserve officials have predicted. The consumer-price index climbed 0.3 percent from the prior month, in line with the median projection of economists surveyed by Bloomberg News, a report from the Labor Department showed today in Washington. Excluding volatile food and fuel costs, the so-called core rose 0.1 percent, less than forecast and the smallest gain since March. Companies like clothing retailer Gap Inc. (GPS) and supermarket chain Safeway Inc. (SWY) have said they are limited in how much they can raise prices to recoup raw materials costs as weak job and income gains squeeze consumers. With inflation less of a concern, Fed policy makers would have the flexibility to take additional steps should the world’s largest economy stumble.

Sept. Housing Starts Up More Than Forecast (Source: Bloomberg)
Builders began work on more U.S. homes than forecast in September and consumer prices climbed at the slowest pace in three months, supporting Federal Reserve forecasts for a pickup in growth and a moderation in inflation. Housing starts jumped 15 percent to a 658,000 annual rate, the most since April 2010, the Commerce Department reported today in Washington. Data from the Labor Department showed the cost of living climbed 0.3 percent from August, in line with the median projection of economists surveyed by Bloomberg News. The increase in building was led by a surge in construction of apartments and other multifamily dwellings that may continue to support the industry as the housing slump turns more Americans into renters. Less inflation gives the central bank the flexibility to take additional steps should the world’s largest economy stumble.

Fed Reports Modest Growth as Firms Doubt (Source: Bloomberg)
The Federal Reserve said consumer spending rose slightly last month and the economy maintained its expansion, even as companies reported more doubt about the strength of the recovery. “Overall economic activity continued to expand in September, although many districts described the pace of growth as ‘modest’ or ‘slight,’” the Fed said in its Beige Book survey released today in Washington. “Contacts generally noted weaker or less certain outlooks for business conditions.” Chairman Ben S. Bernanke early this month told a congressional committee that the two-year-old recovery is “close to faltering,” while repeating his forecast for a pickup in growth. Last month, the Fed announced a plan to spur the economy with lower borrowing costs by replacing $400 billion of short-term Treasury securities in its portfolio with longer- term bonds.

GAO Says Fed Boards Need to Improve Diversity, Conflicts Policy (Source: Bloomberg)
A Government Accountability Office report on Federal Reserve governance released today said that the nine-member boards of reserve banks lacked racial and ethnic diversity in 2006 to 2010, and noted that further work is needed to avoid potential conflicts of interest. The Fed revised its rules for reserve bank directors in 2009 after potential conflicts emerged during the 2008-2009 financial crisis. Even so, the GAO said, the Fed needs to take “additional steps to strengthen controls designed to manage conflicts of interest” and to increase public disclosure of directors’ roles and responsibilities. “More can be done to enhance the transparency of the reserve banks’ governance practices,” the GAO report said. It recommended that all reserve banks “clearly document the roles and responsibilities of the directors, including restrictions on their involvement in supervision and regulation activities, in their bylaws.”

California Raises 10-Year Yields to 3.70% in Sale of Tax-Exempt Securities (Source: Bloomberg)
California sold $1.8 billion in general-obligation bonds, including 10-year securities yielding 3.70 percent, up from 3.51 percent during marketing to individual investors, according to data compiled by Bloomberg. The yield on $118 million in 10-year tax-exempt bonds is 128 basis points above an index of top-rated debt of the same maturity, a Bloomberg Valuation Index shows. That’s up from a gap of 109 basis points when California sold $2.4 billion of general-obligation debt last month. A basis point is 0.01 percentage point. The spread aligns with a forecast last week from Gary Pollack at Deutsche Bank Private Wealth Management. “Given the market we confronted, we’re satisfied with the results,” Tom Dresslar, a spokesman for Treasurer Bill Lockyer, said in a statement. “We’re confident we got the best deal possible for taxpayers.”

Treasuries Fall on Prospect U.S. Economic Expansion Continuing (Source: Bloomberg)
Treasuries declined after the Federal Reserve said in its Beige Book survey that the U.S. economy maintained its expansion last month, adding to signs that the recovery remains on track. Ten-year yields climbed as Federal Reserve Bank of Atlanta President Dennis Lockhart said recent reports suggest the U.S. economy may be accelerating to a modest pace of growth. The central bank will announce today the amount of 2-year, 5-year and 7-year notes it will put up for auction next week. It’s also scheduled to buy $8 billion to $9 billion of Treasuries maturing from August 2012 to March 2013 as part of its plan to keep borrowing costs down.
“We’re optimistic that the period of very poor U.S. economic data is not going to continue all the way to the end of the year,” said Andy Cossor, the Hong Kong-based chief market strategist at DZ Bank AG, Germany’s fifth-largest lender. “We’re looking for some slightly more positive news on that front. That would erode some of the safe-haven bid that’s supported the Treasury market.”

U.S. Stocks Decline on Europe Crisis Concern (Source: Bloomberg)
U.S. stocks fell, following yesterday’s rally for benchmark gauges, amid concern about the strength of the economy and an impasse over European bailout talks, while Apple Inc. (AAPL) tumbled on disappointing results. Apple slumped 5.6 percent, the biggest decline since December 2008, after profit missed estimates for the first time in at least six years. Alcoa Inc. (AA) and DuPont Co. slid more than 2.6 percent, pacing losses in companies most-dependent on economic growth. Bank of America Corp. (BAC) and Wells Fargo & Co. (WFC) dropped at least 2.6 percent, reversing earlier gains. The S&P 500 decreased 1.3 percent to 1,209.88 at 4 p.m. New York time. The benchmark gauge yesterday rose to the highest level since August. The Dow Jones Industrial Average dropped 72.43 points, or 0.6 percent, to 11,504.62 today.

Japanese Stocks Head for Lowest Close in Two Weeks on European Debt Split (Source: Bloomberg)
Japanese stocks fell, with the Nikkei 225 (NKY) Stock Average heading for its lowest close in two weeks, as an impasse over European bailout talks sparked concerns about the global economic recovery. Nippon Sheet Glass Co., the glass maker that counts Europe as its biggest market, slid 1.2 percent. Advantest Corp., a maker of memory chip testers, sank 1.1 percent after a report showed industry orders declined. Showa Denko KK, a chemical manufacturer, led declines among Japanese companies affected by Thailand’s worst floods in 50 years. The Nikkei 225 declined 0.6 percent to 8,716.86 as of 10:09 a.m. in Tokyo, heading for its lowest close since Oct. 7. The broader Topix index fell 0.6 percent to 746.84, with almost three stocks falling for each that rose. The gauge tumbled 16 percent this year through yesterday amid concern the U.S. may fall into another recession and that Europe’s debt crisis will spread to the banking system.

European Stocks Gain on Rescue-Fund Reports; Commerzbank Climbs (Source: Bloomberg)
European stocks advanced for the first time in three days amid conflicting reports that France and Germany have reached a deal on expanding the euro area’s rescue fund. Natixis and Commerzbank AG (CBK) jumped more than 2.5 percent as a gauge of banks rebounded from four days of declines. Software AG (SOW), Tele2 AB (TEL2B) and British Sky Broadcasting Group Plc (BSY) rallied after reporting results. Hochtief AG (HOT) gained 3.7 percent as Goldman Sachs Group Inc. upgraded the construction company. The benchmark Stoxx Europe 600 Index climbed 0.6 percent to 236.71 at the close in London after falling 1.3 percent in the previous two days. The measure has rallied 10 percent from this year’s low on Sept. 22 amid speculation policy makers will find a solution to Europe’s debt crisis.

France, Germany Split on Crisis Solution (Source: Bloomberg)
A French-German split over Europe’s rescue strategy emerged as finance ministers prepare to meet in Brussels tomorrow under pressure to craft a solution to the region’s debt crisis. With a summit scheduled two days later, a disagreement over the European Central Bank’s role threatens to stymie progress on the banking and economic questions needed to deliver the comprehensive strategy demanded by global policy makers. Luxembourg Prime Minister Jean-Claude Juncker, who chairs the group of euro-area finance ministers, indicated an impromptu meeting of European leaders in Frankfurt last night failed to resolve differences. “We are still meeting,” he said as he departed.
French President Nicolas Sarkozy, whose wife was reportedly giving birth to his first daughter, jetted into Frankfurt to meet with officials as they attended an event to honor outgoing ECB President Jean-Claude Trichet. Sarkozy, German Chancellor Angela Merkel and International Monetary Fund Managing Director Christine Lagarde left the event at the Frankfurt Opera House without commenting.

Papandreou Faces Austerity Vote Amid Unrest (Source: Bloomberg)
Greek Prime Minister George Papandreou is set to risk further social unrest over a new round of austerity measures that he needs to convince euro-area leaders that Greece will hold to its bailout program. Papandreou secured the support of all 154 of his lawmakers in the 300-seat parliament in a preliminary vote in Athens late yesterday, setting up a final vote on the bill today that tests his party’s unity for a second time in 24 hours. The package comprises tax rises, cuts to pensions and wages and plans to dismiss 30,000 state workers, plus provisions to break the collective pay-bargaining power of Greek unions. “The issue is how to avoid default and in my view it is absolutely doable,” Stefanos Manos, a former Greek finance minister, said in an interview with Bloomberg Television. “But it requires some very tough decisions right away.”

Papandreou Wins First Vote on Austerity Bill, Speaker Says (Source: Bloomberg)
Greek Prime Minister George Papandreou won a preliminary vote in parliament on a new austerity bill in Athens today, bolstering his chances of securing further international aid for the country. A total of 154 lawmakers in the 300-seat chamber supported the motion and 141 voted against, Parliament Speaker Grigoris Niotis said in remarks carried live on state-run Vouli TV. A total of 295 deputies voted. The in-principle vote will be followed by a final vote on all articles and in total tomorrow.

70,000 Greeks Protest Cuts, Clash With Police (Source: Bloomberg)
Greek protesters clashed with police in central Athens after Prime Minister George Papandreou vowed to push through a further round of austerity and appealed to Europe to cut Greece’s debt load at an Oct. 23 summit. Riot police in white helmets used tear gas to hold back demonstrators from the parliament building in the Greek capital today as lawmakers debated the extra austerity measures demanded by Greece’s international creditors to keep aid flowing. Police said about 70,000 people gathered in Athens at the start of a 48-hour strike in one of the biggest protests yet against Papandreou’s latest program of cost-cutting and tax rises. “Without the measures, the 2011 budget won’t be met, neither will the budget in 2012,” Finance Minister Evangelos Venizelos told lawmakers in comments broadcast live, as groups of hooded protesters in gas masks lobbed Molotov cocktails at the riot police outside. “We are giving the battle of battles up to Sunday evening.”

BOE Voted Unanimously to Expand Stimulus to $380 Billion on Slow Economy (Source: Bloomberg)
Bank of England officials voted unanimously to expand the size of their asset-purchase program as strains related to Europe’s debt crisis created a “compelling” case to add to stimulus. The nine-member Monetary Policy Committee led by Governor Mervyn King raised the ceiling for so-called quantitative easing to 275 billion pounds ($434 billion) from 200 billion pounds on Oct. 6. All nine also voted to keep the key interest rate at a record low of 0.5 percent, according to the minutes of the decision published in London today. Policy makers debated expanding QE by between 50 billion pounds and 100 billion pounds and said they expect the new round of stimulus to have a similar impact to asset purchases in 2009. They said the program could be “adjusted” if its impact differed from the committee’s expectations.

Brazil Cuts Interest Rate to 11.5% on Slowing Growth, European Debt Crisis (Source: Bloomberg)
Brazil’s central bank cut borrowing costs by half a point for a second straight meeting, as growth in Latin America’s biggest economy slows amid Europe’s sovereign-debt crisis. The bank’s board, led by President Alexandre Tombini, voted unanimously to reduce the benchmark Selic rate to 11.5 percent from 12 percent, as forecast by 61 of 68 analysts surveyed by Bloomberg. Five analysts forecast a 0.75-point reduction, and two expected a full-point cut. The central bank “understands that to mitigate in a timely way effects coming from a more restrictive global environment, a moderate adjustment in the level of the basic rate of interest is consistent with the scenario of the convergence of inflation to the target in 2012,” policy makers said in their statement accompanying their decision.

Thailand Pauses Inflation Fight, Pledges Spending as Floods Hurt Economy (Source: Bloomberg)
The Bank of Thailand put its fight against rising prices on hold and the government pledged to boost spending as the worst floods in 50 years threaten to keep factories closed for months, exacerbating risks from weakening global demand. The central bank kept interest rates unchanged yesterday for the first time this year, ending its longest series of increases since 2006 even as it signaled vigilance against a resurgence in inflation. Finance Minister Thirachai Phuvanatnaranubala said the move failed to “help” the government and said it would use fiscal policy to boost growth. “Pausing is already a very big contribution,” Jun Trinidad, an economist at Citigroup Inc. in Manila, said by phone. “If the government can execute its plans for relief and rehabilitation quickly, a speedy recovery in the first half of next year is certainly a strong possibility.”

Euro Holds Drop Versus Pound as Leaders Disagree on Debt Crisis Solution (Source: Bloomberg)
The euro maintained a drop from yesterday against the pound as divisions emerged over how to tackle Europe’s debt crisis before finance ministers meet in Brussels tomorrow. Demand for the 17-nation currency was limited as a split between France and Germany over Europe’s rescue strategy surfaced and the head of Finland’s parliament finance committee said plans to boost the region’s rescue fund through leverage disguise potential costs. “Positive bounces during this period of expectation that something big will be unveiled will be disappointed quite soon and we want to trade that disappointment,” said Imre Speizer, a strategist in Auckland at Westpac Banking Corp., Australia’s second-largest lender. “We’re using bounces in various risk markets to go short on currencies like the euro.”

20111020 0956 Global Commodities Related News.

Corn (Source: CME)
US corn futures close lower on spillover pressure from a sharp drop in soybeans. The late break in the oilseed market spilled over into the grains after corn and wheat spent much of the day trading higher, traders say. The day was "absent of any news other than general commodity-wide liquidation," says Rich Feltes of RJ O'Brien. Commodity funds sold an estimated 8,000 corn contracts, a moderate amount. Yet, farmers are still hanging on to their crops, reluctant to sell until prices increase. CBOT December corn slides 5 1/2c to $6.38 1/2/bushel.

Wheat (Source: CME)
US wheat futures end mostly lower as broad selling hits the grain markets. Prices decline as pressure spills over from losses in soybeans and crude oil, traders say. Wheat lacks supply concerns to push prices higher, as global inventories are ample. Yet, traders continue to keep an eye on dry weather slowing planting in US Plains. CBOT December wheat loses 5 3/4c to $6.19 1/2/bushel; KCBT December slips 6c to $7.05 1/2. MGEX December jumps 5c to $9.11 1/2 as the market feels support from the lack of selling by farmers waiting for higher prices.

Rice (Source: CME)
US rice futures advance on supply concerns, despite losses in other grain markets. Flooding in Thailand, the world's top rice exporters, remains a concern, with the former head of the Thai Rice Exporters Association warning water may hurt the upcoming harvest. Worries pushed prices higher as corn, wheat and soybean prices sank. CBOT November rice ends up 19c to $16.45/hundredweight.

Soybeans fall on harvest forecast, demand concerns
KUALA LUMPUR, Oct 19 (Reuters) - U.S. soy futures fell for a third day on Wednesday as expectations for a bigger harvest and concerns about reduced demand from the world's top buyer, China, weighed on sentiment.
"China's imports aren't going to plunge but they may slow a little as consumption is expected to come off a bit," said Ker Chung Yang, an analyst at Phillip Futures Pte in Singapore, who forecasts that soybeans may trade near $13 per bushel by the end of the year and the first quarter of 2012.

Ukraine grain stocks at 21.9 mln T as of Oct 1
KIEV, Oct 19 (Reuters) - Ukraine's grain stocks totalled 21.9 million tonnes as of Oct. 1, 23 percent more than at the same date in 2010, the State Statistics Service said on Wednesday.  
The service said stocks of large- and medium-sized agriculture companies included 13.9 million tonnes of wheat, 3.5 million tonnes of barley and 1.3 million tonnes of maize.
   
Canada to downsize Wheat Board, end grain monopoly
WINNIPEG, Manitoba, Oct 18 (Reuters) - The Canadian government put forward long-promised legislation on Tuesday to dismantle Western Canada's grain-marketing monopoly, and gave the Canadian Wheat Board (CWB) five years to implement a business plan to survive in an open market.
In draft legislation presented to Parliament, the Conservative government offered the CWB certain financial guarantees, but said it would not provide seed capital or regulated access to grain handlers after the board loses its grain marketing monopoly.

UK wheat exports below last season, rapeseed up
LONDON, Oct 18 (Reuters) - UK wheat exports rose in August but are still running well below last year's levels, customs data showed on Tuesday.
Shipments in August totalled 163,037 tonnes, up from 116,391 tonnes in July, bringing the cumulative total for the 2011/12 season, which started on July 1, to 279,428 tonnes, versus 468,264 tonnes in the same period a year earlier.

Harvest to bog down in soggy eastern U.S. Midwest
CHICAGO, Oct 18 (Reuters) - Wet weather this week in the eastern half of the U.S. Midwest will slow corn and soybean harvesting, while dry weather boosts the harvest in the west, an agricultural meteorologist said Tuesday.
"Harvest looks good for the west and not so good for the east, at least for the short term. There is more rain now than expected earlier east of a line from St. Louis to Green Bay," said John Dee, meteorologist for Global Weather Monitoring.

Italy 7-month wheat imports down, maize up-Anacer
MILAN, Oct 18 (Reuters) - Imports of wheat into Italy, a major grain buyer in the European Union, fell in the first seven months of this year while maize imports jumped 37 percent, Italian cereals body Anacer said on Tuesday.  
Imports of soft wheat fell to 2,597,502 tonnes in the January-July period from 2,618,082 tonnes in the same period of 2010, while imports of durum wheat used for making pasta fell to 1,114,713 tonnes from 1,237,035 tonnes, Anacer said in a statement.

S.Africa weekly white maize exports jump
JOHANNESBURG, Oct 18 (Reuters) - South Africa exported 86,567 tonnes of white maize last week compared with 40,204 tonnes in the previous week, the South African Grain Information Service (SAGIS) said on Tuesday.
Exports of yellow maize were recorded at 3,562 tonnes, compared with 2,412 tonnes in the week before, SAGIS said on its website www.sagis.org.za.

Poland 2011-12 Grain Output Seen Down 3.5% On Year - USDA (Source: CME)
Poland's 2011-12 grain crop is expected to be smaller and of worse quality than last year after heavy rain disrupted this summer's harvest, the U.S. Department of Agriculture said. Grain production is expected to fall 3.5% from 2010-11 to 26.3 million metric tons, including a 10.1% slump in rapeseed output to 1.9 million tons, the USDA's Warsaw attache said in a report. "Grain quality is reported as poorer due to fungi presence after excessive rainfall prior [and] during the harvest," the report said.

Thai October Rice Exports Likely To Fall On Lower Indian Prices (Source: CME)
Thailand's October rice exports will likely fall 12.5% from September as buyers are postponing shipments amid cheaper Indian offers, and sales may remain subdued for the next few months, former Thai Rice Exporters Association President Chookiat Ophaswongse said. He confirmed that buyers in Africa have deferred exports of around 150,000 metric tons of Thai parboiled rice. Global traders and African buyers are snapping up Indian parboiled rice at $455-$480/ton, free on board compared with Thai offers of about $600/ton. Until August, buyers were aggressively buying Thai rice due to fears that supply may dry up once the government implements its program of procuring paddy at THB15,000/ton, around 40% above market rates. The program kicked off Oct. 7, but the government has hardly purchased any rice due to floods. Last month, India relaxed its ban on exports of ordinary rice, hitting demand for Thai grain--particularly parboiled grades.
Thailand has dominated the parboiled rice market for more than three years due to India's ban. This year, it exported 350,000 tons on average each month until August. September exports fell to around 300,000 tons and may be just above 100,000 tons in October, Chookiat said. Until August, Thailand exported 1 million tons on average every month--all rice grades combined--but volumes slipped to 800,000 tons in September. Floods may affect the next harvest in December and January, but the country has adequate stocks from previous crops, Chookiat said. Thai white rice prices rose more than 20% in the July-August period, while 5%-brokens have been at $590-$620/ton since early September. Prices may rise further once the procurement program gathers momentum, Chookiat said.

SE Asia flood impact on rice supply, prices in focus
HO CHI MINH CITY, Oct 18 (Reuters) - Tightening rice supply in top exporter Thailand due to floods and defaults by Vietnam as prices jump could prompt Indonesia,  Africa and the Middle East to delay imports until the market steadies or seek cheaper options from India and Pakistan.
International traders and government officials meeting in Vietnam this week will also assess the full impact of flooding on output in the top two exporters, whether prices will escalate further and the demand outlook for typhoon-hit Philippines.

Rise in small bounce, weaker dollar supports
LONDON, Oct 19 (Reuters) - ICE cocoa, raw sugar and arabica coffee futures steadied on Wednesday, supported by a weaker dollar, as the markets consolidated following losses earlier in the week on worries over global growth and the eurozone debt crisis.
Cocoa futures on ICE were slightly higher, hovering near their lowest level in more than two years, as ample supplies capped gains.

Malaysia's Q3 cocoa grindings down 2.8 pct y/y
SINGAPORE, Oct 19 (Reuters) - Cocoa grindings in Malaysia, Asia's largest grinder, slipped 2.8 percent to 71,451 tonnes in the third quarter of 2011 from the same period last year, the Malaysian Cocoa Board (MCB) said.  
Cocoa grindings were down 0.9 percent from the second quarter, dropping for a second consecutive quarter, the MCB said in a statement. It gave no further details.
 
Ukraine produces 930,000 T sugar so far
KIEV, Oct 18 (Reuters) - Ukrainian sugar refineries produced 930,000 tonnes of white sugar from sugar beet as of Oct. 17 or 33 percent more than at the same date in 2010, Ukraine's sugar union Ukrtsukor said on Tuesday.
The union said that 75 refineries had received about 9.0 million tonnes of sugar beet and processed more than 7.0 million tonnes.  -

India Renuka Sugar sees global restocking at 22-24 cents/lb
MUMBAI, Oct 18 (Reuters) - Sugar importers with lower-than-normal inventories would replenish stocks at 22 to 24 cents per pound levels, supporting prices in a year supplies are set to surpass demand, India's biggest sugar refiner said on Tuesday.
"There was very strong buying support between 22 to 24 cent (per pound). Many importing countries have very low stocks and they would look to build up stocks at this price," Narendra Murkumbi, managing director of Shree Renuka Sugars  told Reuters in an interview.

Uzbekistan Cotton Heads East As Western Buyers Boycott (Source: CME)
Pressure from western countries is mounting on the Uzbekistan government, one of the world's largest producers and exporters of cotton, to prove it is ending the use of child labor in its trade of the agricultural commodity. During a recent International Cotton and Textile Fair in the Central Asian country's capital Tashkent, not a single western buyer signed a contract for Uzbekistan's cotton, the government cotton marketing agent Uztsentrimpex said. Western buyers were boycotting Uzbekistan cotton because of allegations of child labor used in cotton growing in Uzbekistan. The government's marketer doesn't expect a further significant decline in its cotton exports, as Russian and Asian buyers were replacing western buyers at a considerable rate. Although the shift in cotton trade flows from Uzbekistan to the East won't affect global cotton prices, the western boycott demonstrates the strength of many retailers' drive to stamp out the use of child labor in the cotton industry.
Uzbekistan is the world's seventh-largest cotton producer, harvesting about 4.1 million bales of raw cotton last year and exporting about 65% of that, according to the National Cotton Council of America. Each bale weighs 480 pounds. Cotton orders placed at Uzbekistan's international fair fetched $550 million for this year, or about 600,000 metric tons, but sales fell 50,000 tons shy of those at the same event last year. In 2010, Uzbekistan said it had earned more than $500 million from cotton sales at the fair. Russian buyers bought 40% of the Uzbekistan cotton available during the mid-October fair, with the remaining 60% going to buyers from China, Bangladesh, Vietnam, Japan, United Arab Emirates, Iran, Turkey, Pakistan, South Korea and Singapore. An Uzbekistan government official said the law prohibited children under age 16 from working. He added that even if children did work in the fields, it was not because they were forced to do so but because they wanted to. He declined to offer any further comments.
Sportswear and equipment maker Adidas AG said it has signed a pledge, along with more than 50 of the world's best known apparel companies, to not knowingly source Uzbek cotton harvested using forced child labor. "The Adidas Group fully supports the pledge," said Frank Henke, the company's global director of social and environmental affairs. "We have been enforcing our code of conduct, the so-called 'workplace standards,' for many years, which includes a clear ban of child labor from our entire supply chain. By signing this pledge we are showing our unwavering commitment to the cause." Swedish fashion giant Hennes & Mauritz AB, which also signed the pledge, said it also works to avoid buying from cotton producers that use children workers. "The companies will maintain this pledge until the elimination of this practice is independently verified by the International Labor Organization," H&M press officer Charlotta Nemlin said. "H&M is a major cotton consumer and does not accept child labor."
Still, Keith Flury, senior commodity analyst at London-based Rabobank, warns that tracing the origin of cotton supplies remains a challenge for the industry. "Traceability of fiber is easier than raw cotton, but given the complicated and globalized cotton supply chain it is difficult, and adds costs to account for origins in the final textile products," Flury said. December-delivery cotton on the IntercontinentalExchange ended 0.2% lower at $1.0018 Tuesday, recovering from an intraday low of 99.61 cents.

Asia Coal-Australia thermal coal prices dip on tepid demand
Oct 19 (Reuters) - Australia's thermal coal prices dropped slightly for the week with Chinese buyers on the sidelines, while the level of demand elsewhere in the market was insufficient to push up prices.  
Thermal coal on the global COAL Newcastle index for the week to date closed at $119.75 per tonne on Tuesday, down from $121.63 per tonne a week earlier.

Australia Newcastle coal exports up 5 pct in week
Oct 19 (Reuters) - Thermal coal shipments from Australia's Newcastle port rose 5 percent in the week ending Oct. 17 to 2.320 million tonnes, the Newcastle Port Corporation said on its website on Wednesday.    
The vessel queue at the port was unchanged at 13, and the average waiting time for vessels rose by two days to around 12.6 days.

Euro Coal-Prices fall further, outlook seen soft
LONDON, Oct 18 (Reuters) - Prompt physical coal prices fell on Tuesday by $1 to $2 a tonne as slow business and a weaker outlook hurt sentiment.
European demand has been minimal in recent weeks aside from the regular spot buying by one major utility which is always short on physical coal.

Spain 2011 thermal coal imports seen at 10 mln T
MADRID, Oct 18 (Reuters) - Spain is on course to import 10 million tonnes of thermal coal in 2011 due to better margins on burning coal than liquefied natural gas, an executive from Spanish utility Iberdrola  said on Tuesday.
Speaking on the sidelines of the annual Coaltrans conference in Madrid, utility sources said they have renegotiated LNG take-or-pay contracts and resold cargoes, mainly to Japan but also to Europe and elsewhere in Asia.

China 2011 coal imports seen 150-160 mln T - Tader
MADRID, Oct 18 (Reuters) - China's 2011 thermal coal imports are likely to be around 150-160 million tonnes, having recovered in the second half of the year after a slow start, Phil Ren of China's Tader Coal SCM Company and Vice President of Northeast Asia Coal Exchange Center, said on Tuesday.
Speaking at the Coaltrans annual conference in Madrid, Ren said China's thermal coal imports could rise to account for 10 percent of the country's total consumption - 400 million tonnes - in five years' time.

Oil Trades Near One-Week Low on U.S. Fuel Demand, Economic Growth Outlook (Source: Bloomberg)
Oil traded near a one-week low in New York after U.S. fuel use dropped to the lowest in five months and the Federal Reserve said the pace of economic growth in parts of the world’s biggest crude-consumer was “modest.” December futures were little changed after declining 2.5 percent yesterday. The Fed said in its Beige Book survey that companies reported more doubt about the strength of the recovery. U.S. fuel use fell 2.2 percent to 18.3 million barrels a day last week, the least since May, the Energy Department said. Crude oil for December delivery, the most actively traded contract, was at $86.24 a barrel, down 5 cents, in electronic trading on the New York Mercantile Exchange at 9:39 a.m. Sydney time. The contract yesterday fell $2.24 to $86.29, the lowest since Oct. 13. Prices are down 5.8 percent this year. November futures, which expire today, were at $86.11.

Need for more OPEC oil this year, next-IEA official
PARIS, Oct 19 (Reuters) - There is a need for more OPEC oil late this year and next year, an IEA official said on Wednesday, but declined to say directly whether he thought the group should raise its output quotas when it meets on Dec.14.
"We think there's a market in the fourth quarter and 2012 for a little more than what OPEC is producing," said David Fyfe, the head of the oil industry and market division at the International Energy Agency.

Saudi oil output rose to 9.756 mln bpd in Aug-JODI
ABU DHABI, Oct 19 (Reuters) - Leading oil exporter Saudi Arabia produced 9.756 million barrels a day (bpd) of crude in August, 150,000 bpd more than in July, according to the latest official data published by the Joint Data Initiative (JODI).  
Saudi crude production of 9.813 million bpd in June was the highest level since JODI records began in 2002 and came after Saudi Oil Minister Ali al-Naimi said the kingdom would produce all the oil customers wanted after OPEC talks over coordinated production levels collapsed on June 8.

Brent weakens as demand outlook weighs
LONDON, Oct 19 (Reuters) - Brent crude fell below $111 per barrel, dented by worries on the euro zone debt crisis and the demand outlook after Moody's Investors Service cut Spain's sovereign rating.    
"We may avoid a catastrophe, but even if there is a solution, there will be a price to pay, and there will be an economic cost which will hit demand and growth," said Christophe Barret, analyst at Credit Agricole Corporate and Investment Bank.

Iron Ore-Spot prices extend losing streak, swaps slide
SINGAPORE, Oct 19 (Reuters) - Spot iron ore prices slumped to their lowest since November 2010, extending a losing streak that has slashed values by more than 12 percent so far this month, as slower demand from top buyer China raised fears of further price declines.
A steep fall in prices of iron ore forward swaps reflected expectations spot rates have yet to hit a floor, preventing potential buyers from returning to the physical market.

Singapore Exchange iron ore swaps volume hits record
SINGAPORE, Oct 19 (Reuters) - The volume of iron ore swaps cleared by the Singapore Exchange  reached a record 1,526 lots or 763,000 tonnes on Tuesday, as prices fell sharply on fears that slower Chinese demand will drag down spot rates further.
Open interest also rose to a record at 10,298 lots, or 5.15 million tonnes, SGX said on its website on Wednesday. SGX clears the bulk of iron ore swaps  traded globally.

India iron ore exports in Aug fall 43.4 pct - trade body
Oct 18 (Reuters) - Iron ore exports in August from India, the world's third biggest exporter, fell 43.4 percent on year to 2.65 million tonnes, data from a trade body showed, as monsoon dented shipments and there were no exports from a key state even after lifting of a ban.
Exports in the first five months of the fiscal year to August fell 24.38 percent to 28.02 million tonnes, the Federation of Indian Mineral Industries (FIMI) said in a statement.

China Sept steel output lowest since Feb - stats bureau
BEIJING, Oct 18 (Reuters) - Chinese crude steel production in September fell to its lowest point in seven months, shrinking 3.5 percent from August to 56.7 million tonnes, figures from the country's statistics bureau showed on Tuesday.
On a daily basis, the decline was less dramatic, with production at 1.89 million tonnes compared with 1.895 million tonnes in the previous month, according to Reuters calculations.

Silver Bear Market Seen Ending on Extended Europe Debt Crisis: Commodities (Source: Bloomberg)
Silver, the best-performing and most-volatile precious metal of the past year, may rebound from a bear market as investors bet on growth in developing nations and an extended European debt crisis. The metal may average $38 an ounce this quarter and rise to a record $42 by the final three months of 2012, compared with $31.245 at 7:48 a.m. in Singapore today, according to the median in a Bloomberg survey of 11 analysts. The gains will mean record profit for producers Pan American Silver Corp. (PAA) and Fresnillo Plc (FRES), analyst estimates compiled by Bloomberg show.
China, the biggest emerging-market user, is expanding at more than five times the speed of the U.S., driving consumption of the precious metal most used in industry. Demand is also coming from investors looking for an alternative to cash and gold, which costs about 50 times more than silver. The 30-week correlation coefficient between the two metals is now at 0.82, from as low as 0.47 in 2005, data compiled by Bloomberg show, with a figure of 1 meaning the two move in lockstep.

Copper Drops Most in Three Weeks as European Debt, China May Erode Demand (Source: Bloomberg)
Copper futures fell the most in three weeks on concern that demand will ease as Europe’s debt crisis persists and economic growth slows in China, the world’s largest metal buyer. Moody’s Investors Service yesterday cut Spain’s credit rating for a third time since June 2010 as the region’s fiscal woes weigh on the country’s economy. Gross domestic product in China expanded in the third quarter at the slowest pace since 2009. Copper has slumped 30 percent from a record $4.6575 a pound on Feb. 15. “Copper is under pressure because of a theme of slowing economies throughout the world,” Frank Lesh, a trader at FuturePath Trading in Chicago, said in a telephone interview. “Prices will need to go lower to attract Chinese buyers as there’s ample supply” in the country, he said.

Technical Signs Say Gold’s Fall May Continue (Source: Bloomberg)
Gold prices, down 14 percent since touching a record in September, are poised for more losses, according to technical analysis by Steel Vine Investments LLC. Bullion’s advance from the Sept. 26 low of $1,535 an ounce to a high of $1,696.80 on Oct. 17 created a so-called bear flag pattern where price movements resemble an inverted flag, according to Spencer Patton, the Chicago-based chief investment officer for Steel Vine. The metal’s plunge from a record $1,923.70 on Sept. 6 to the low on Sept. 26 created the so-called flag pole. Losses in the past three sessions signal the completion of the pattern, and that prices will resume their decline, Patton said. Gold may drop to $1,550 by the first week of November, he said.

China’s Love of Sleeping U.S. Cherries Fuels Chilled-Cargo Surge: Freight (Source: Bloomberg)
Container lines struggling to make money hauling Chinese-made goods to the U.S. are experiencing a surge in lucrative shipments of meat, fruits and vegetables in the other direction. A.P. Moeller Maersk A/S and Neptune Orient Lines Ltd.’s APL unit have led a 46 percent jump in refrigerated-container shipments to China from the U.S. this year, according to Piers data, as higher wages and quality concerns stoke demand for imported food. The need for specialized containers, known as reefers, means rates are about four times higher than those for carrying a standard box from Shanghai to Los Angeles. “There’s an opportunity in the reefer market,” said Tim Smith, the North Asia head at Maersk Line, the world’s largest container-ship operator. In China, “the level of disposable incomes has increased a lot, so we think they’ll want more high- quality foods and perishable products,” he said.

Asia Dry Bulk-Port congestion to push cape rates to 2011 highs
SINGAPORE, Oct 19 (Reuters) - Rates for capesize dry bulk carriers on key Asian freight routes are expected to reach fresh highs for the year over the next week, supported by rising port congestion in key commodity exporting nations.
For smaller panamax and supramax vessels, rates in the intra-Asia market are seen higher on strong demand for Indonesian coal, shipbrokers said on Wednesday.
Baltic index falls, China economy watched
LONDON, Oct 18 (Reuters) - The Baltic Exchange's main sea freight index, which tracks rates to ship dry commodities, fell for a second day on Tuesday hit by slower iron ore and coal cargo bookings to China.
Brokers said the market was watching to see if weaker-than-expected Chinese economic data issued on Tuesday would signal a pullback in raw materials demand, which would dent the dry freight market already struggling with a glut of vessels.