Tuesday, August 28, 2012

20120828 1828 FCPO EOD Daily Chart Study.

FCPO closed : 3029, changed : -62 points, volume : lower.
Bollinger band reading : pullback correction upside biased.
MACD Histogram : turned downward, buyer lock in profit.
Support : 3020, 2970, 2950, 2920 level.
Resistance : 3050, 3070, 3100, 3150 level.
Comment :
FCPO closed recorded more than 1.5% loss with reducing volume traded. Soy oil currently trading weaker after overnight closed lower while crude oil price also pullback lower after recent rallies.
The recent more than 250 points rally face profit taking activities today pressured price to fall lower after Japan lowered economy growth for this year amid global slowdown will weaken demand.
Daily chart reading wise, market continue to have pullback correction within an upside biased market development.
When to buy : buy at support or weakness with quick cut loss and profit target.
When to sell : sell at resistant or strength with quick cut loss and profit target.

20120828 1751 FKLI EOD Daily Chart Study.

FKLI closed : 1647.5 changed : -2 points, volume : higher.
Bollinger band reading : pullback correction upside biased.
MACD Histogram : falling lower, buyer seller battling.
Support : 1640, 1630, 1623, 1615 level.
Resistance : 1650, 1660, 1670, 1680 level.
Comment :
FKLI closed recorded small loss with rising volume changed hand on par with FBMKLCI30 index that closed little weaker. Overnight U.S. markets closed sligthly lower and today Asia markets ended mostly recorded small for the 2nd day while European markets currently trading little lower.
Most regional market traded lower after Japan lower its economy growth assessment while investors await if there is still any possible stimulus measure announce from U.S. Federal Reserve.
Still, FKLI daily chart reading suggesting a pullback correction upside biased market development with increasing rollover activities.
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.

20120828 1709 Regional Markets EOD Daily Chart Study.

 DJIA chart reading : correction range bound little upside biased.
 Hang Seng chart reading : side way range bound.
KLCI chart reading :  pullback correction little upside biased.

20120828 1636 Global Markets & Commodities Related News.

GLOBAL MARKETS: Asian stocks fell on investor caution ahead of a gathering of central bankers and economists in Wyoming later in the week which could shed some light on further stimulus plans. MSCI's broadest index of Asia-Pacific shares outside Japan dropped 0.4 percent to a three-week low, dragged down by the materials sector. European stock index futures pointed to a lower open as mounting worries over global growth overshadowed expectations of further stimulus measures from the U.S. Federal Reserve and the European Central Bank. Shares of Apple climbed to another record on Monday, keeping the Nasdaq index afloat in the lowest trading volume of the year, with investors looking ahead to a key speech by Federal Reserve Chairman Ben Bernanke on Friday. (Reuters)

FOREX: The euro sagged against the dollar while the yen gained broadly as market players trimmed their long positions in risk currencies ahead of a central bankers' meeting later in the week. (Reuters)

FOREX- Euro sags, yen gains as market trims risky FX positions
The euro sagged against the dollar while the yen gained broadly as market players trimmed their long positions in risk currencies ahead of a central bankers' meeting later in the week
"The euro had been bought on hopes after the ECB comments.  But unless the market sees action to back up its words soon, the rally will fizzle," said Minori Uchida, chief FX strategist at the Bank of Tokyo-Mitsubishi UFJ.

Mixed endorsements of more Fed easing (Reuters)
Two top Federal Reserve officials offered widely different endorsements of more U.S. policy easing on Monday, with one weighing the benefits and risks of more action and the other stressing the need to act now.

GRAINS:U.S. soybeans inched higher as concerns about tight supplies from the drought-striken Midwest lingered, while corn firmed amid concerns over potential damage from Tropical Storm Isaac. (Reuters)

U.S. corn harvest slows with rains; farmers maintain record pace (Reuters)
The U.S. corn harvest inched forward during the past week,  government data showed on Monday, as farmers gave crops more time to dry down to save them the cost of machine drying.

OIL: Brent oil futures were slightly lower, but steadied above $112 a barrel, supported by supply concerns after U.S. companies slashed crude production in the Gulf of Mexico as Tropical Storm Isaac threatened to strengthen into a hurricane.  (Reuters)

Oil companies, refiners brace for Louisiana-bound Isaac (Reuters)
Energy companies evacuated offshore oil rigs and shut down U.S. Gulf Coast refineries on Monday as Tropical Storm Isaac threatened to reach hurricane strength and batter the country's oil refining belt this week.

Venezuela refinery could restart Friday (Reuters)
Venezuela's biggest refinery could restart operations on Friday and fires still burning in three storage tanks will be extinguished within two days, the country's energy minister told Reuters, following the country's worst oil industry accident.
BASE METALS: London copper fell, with many investors closing long positions as they waited for a meeting of central bankers later this week for fresh clues on possible monetary stimulus from the U.S. Federal Reserve.

PRECIOUS METALS: Gold edged lower after rising to its highest in over four months in the previous session, as caution prevailed ahead of a central bankers' meeting this week. (Reuters)

Labour strife returns in S.Africa's platinum belt (Reuters)
Labour strife returned to South Africa's platinum sector on Monday, derailing London-based Lonmin's efforts to restart mining and fanning fears of a resurgence of the violence that has killed 44 people this month.

COLUMN-China iron, coal defaults not all they seem
--Clyde Russell is a Reuters market analyst. The views expressed are his own.--
LAUNCESTON, Australia, Aug 27 (Reuters) - One of the most bearish signals regarding China's commodity demand has been several reports of iron ore and coal cargoes being deferred or cancelled.
The reasoning is sound enough; if the Chinese are defaulting on imports of commodities it must be because demand is down and there is little need for volumes that had been bought when the outlook was stronger.

S.Africa's gold sector also hit with wage hike demands
JOHANNESBURG, Aug 27 (Reuters) - South Africa's gold mining companies have been hit by union demands for wage hikes but the industry has little room to budge as current collective agreements do not expire until the middle of next year, the country's chamber of mines said on Monday.
The country's platinum sector currently faces a wave of labour strife and violence that killed 44 people this month and shut ore output at mines run by Lonmin  , the world's third largest producer of the precious metal.

China's Baosteel sees steel prices staying under pressure
SHANGHAI, Aug 27 (Reuters) - Baoshan Iron & Steel , China's biggest listed steelmaker, expects steel prices to remain under pressure for the rest of this year as the industry shows no sign of curbing output and steps to stimulate the economy take time to kick in.
"Steel prices will unlikely increase much in the second half of this year due to the oversupply. Prices are expected to stay at low levels," the company said on Monday, as it posted a 53-percent drop in first-half profit, excluding one-off items.

China's daily steel output dips in mid-August -CISA data
SHANGHAI, Aug 27 (Reuters) - China's average daily crude steel output fell 2 percent to 1.93 million tonnes between August 11-20 compared with the first 10 days of the month, data from the China Iron & Steel Association showed on Monday, as sharply falling steel prices pushed mills to curb production.
Shanghai rebar futures  tumbled to as low as 3,492 yuan ($550) per tonne on Monday, their weakest since the contract was launched in 2009, dragging prices of steelmaking raw material iron ore down by 33 percent from this year's peak.

METALS-Copper drops as investors eye c.banks, close long positions
SHANGHAI, Aug 28 (Reuters) - London copper fell, with many investors closing long positions as they waited for a meeting of central bankers later this week for fresh clues on possible monetary stimulus from the U.S. Federal Reserve.
"LME prices are down as investors are playing it safe after coming back from a long weekend while waiting for clearer trading cues to emerge," said a Shanghai-based trader with an international firm.

• PRECIOUS-Gold inches down as investors await central banks meeting
SINGAPORE, Aug 28 (Reuters) - Gold edged lower after rising to its highest in over four months in the previous session, as caution prevailed ahead of a central bankers' meeting this week.
"If we get QE3, gold could rise to $1,680 or $1,700," said Peter Fung, head of dealing at Wing Fung Precious Metals in Hong Kong. "But for now, it is still unclear what is going to happen.

20120828 1140 Global Markets & Commodities Related News.

GLOBAL MARKETS-Asian shares steady, seen rangebound
TOKYO, Aug 28 (Reuters) - Markets from stocks to currencies were caught in ranges on Tuesday as investors waited for a gathering of central bankers and economists at Jackson Hole, Wyoming, later in the week for clues over the Federal Reserve's potential easing options.
"The Asian data calendar is second tier today, leaving the focus firmly on regional equities, particularly Shanghai," Westpac Institutional Bank said in a note, noting Monday's fall.

OIL-Oil falls ahead of Isaac, seen hitting refinery demand
NEW YORK, Aug 27 (Reuters) - Brent crude oil futures fell toward $112 a barrel on Monday, reversing early gains as Tropical Storm Isaac shuttered refineries on the U.S. Gulf Coast, cutting demand for crude.
"Traders realize that there is more refining capacity at risk from this storm, and that the risk is also to oil consumption," said analyst Tim Evans at Citi Futures Perspective in New York.

NATURAL GAS - US natgas futures end down, front breaks support
NEW YORK, Aug 27 (Reuters) - U.S. natural gas futures ended lower on Monday, with fading summer demand and record high supplies driving the front-month contract below key support despite early worries about Tropical Storm Isaac churning in the Gulf of Mexico.
"This storm is huge, but it's not that strong. I think the likelihood of infrastructure damage is weighted toward the demand-side and not the supply-side," said Kyle Cooper, managing partner at IAF Advisors in Houston.

20120828 0941 Malaysia Corporate Related News.

Felda Global Ventures Holdings Bhd (FGV) is in talks to buy an initial 30,000 ha of land in Myanmar to grow sugarcane, for a start. The Myanmar expansion marks FGV's maiden venture abroad. FGV president and group chief executive officer  Datuk Sabri Ahmad said for starters, the entity plans to grow sugarcane and plant oil palm as it buys more land in Myanmar. "We are in talks with a local partner and we plan to set up a  joint venture. Talks are ongoing and we are conducting feasibility and technical studies," he said. FGV and its associated companies are already trading palm olein, condensed milk, instant noodles and margarine with the country, via its cooking oil maker and distributor Delima Oil Products. (BT)

The recently terminated CEO of Group Lotus,  Dany Taner Bahar, is suing DRB-Hicom and Lotus for GBP6.7m (RM33.1m) on the grounds of wrongful dismissal. DRB-Hicom said that the exact cost arising from the claim had yet to be determined, but the group did not expect it to have a major impact on its operations and financials. The group also said it had acted properly at all times, having dismissed Bahar after conducting an investigation into his stewardship at Lotus. (Financial Daily)

Malaysia's auto industry has given qualified support for cheaper cars by gradually reducing excise duties. The Malaysian Automotive Association(MAA) support comes after the federal opposition said it wanted to lessen car prices. "If prices are reduced on a gradual basis and not cause a disruption, then it is good," said MAA president Datuk Aishah Ahmad. (BT)

The  Employees Provident Fund's wholly-owned Kwasa Land Sdn Bhd yesterday announced that it has finalised the purchase price of RM2.28bn for the Rubber Research Institute (RRI) land from the government. The 2,330acre site in Sungai Buloh, Selangor, acquired at average RM22.50/psf, will be developed into a township called Kwasa Damansara with an expected population of 150,000. The land will be divided into parcels, developed in phases, and sold to developers according to plot ratios, development components and in conformance with the urban design guidelines by Kwasa Land. "We will soon be calling for the pre-qualification of developers to participate in the creation and building of an iconic township that will be the toast of the town in the coming years," Kwasa Land chairman Tan Sri Samsudin Osman said. Among the key features in the design and layout plan is a development hub comprising modern residential, commercial, recreational and educational facilities.It will also incorporate an integrated transportation system that links the township via MRT (mass rapid transit) to the rest of Klang Valley. A 7.5km green park of 64ha will also be among the highlights of the development. (BT)

Packet One Networks (P1) appointed a unit of Ingenuity Solutions as the distributor for its newly launched P1  fiber broadband for businesses. According to P1's CEO Michael Lai, “...This area has immense growth opportunity because the  high-speed broadband (HSBB) coverage for businesses in Malaysia is between 300,000 and 350,000, while only about 46,000 are fiber broadband users. This vast difference between coverage and users represents a huge untapped market  segment and a golden business opportunity. P1 expects to sell 50,000 subscriptions over a period of two years.” (P1)

Celcom  eyes 1m total data subscribers by year-end, driven by its unique package offerings, namely, wifi, mobile Internet, mobile broadband as well as its high-speed broadband (HSBB), which is due for launching next month. CEO Datuk Seri Shazalli Ramly said its current data subscribers is close to the target, but declined to elaborate. "Our offerings will be made available for fixed, nomadic and mobile usage. This will give us more competitive advantage compared with our competitors," he told. (Bernama)

IHH Healthcare Bhd (IHH) aims to achieve about 30% of market share in Malaysia. Its Managing Director Dr Lim Cheok Peng said the company hopes to increase its market share in Malaysia from the current 15% to between 25-30%. He said the group also hopes to achieve about 75%t market share in Singapore from the current 68%. "There is no specific time frame to achieve our target but our expansion plan will certainly help us in achieving it," he told. He said the company is looking forward to 3-4 new hospitals opening for business next year. "In Malaysia, we are looking at the completion of a new hospital in Manjung, Perak and expansion of the Pantai Hospital in Bangsar next year," he said. He added that the expansion of Gleneagles Hospital in Penang, which will have 250 beds, is expected to complete by year-end while construction of 2 new hospitals, 1 each in Kota Kinabalu and Medini, Johor, is expected to start early next year. "The hospital in Kota Kinabalu is expected to be ready by 2014 while the one in Medini will be ready by 2015," he said, adding that the former will have 250 beds while the latter will have 300 to 350 beds. (Bernama)

Parkson Holdings Bhd plans to sell some of its assets to its subsidiary for RM205.8m. The deal involve East Crest International Ltd, a wholly-owned unit of Parkson Holdings, selling Victor Crest Ltd to Grand Parkson Retail Group Ltd. Grand Parkson is a wholly-owned unit of Hong Kong listed Parkson Retail Group Ltd, which in turn is a 51.5%-owned unit of Parkson Holdings. The disposal includes a 95.9% stake in Qingdao Parkson and a 100% stake in Shenyang Parkson. (BT)

Retail sales, which include items ranging from groceries to clothing, grew by 6.9% in the first quarter of fiscal 2012 as several government initiatives introduced last year spilled over into the new year. This compares to the 5.1% retail sales growth in the first quarter of 2011. While sales remained robust owing to attractive offers and discounts, retailers, however, continue to feel the pinch from lower profit margin as a result of absorbing the rising cost of goods. The segments that fared well in the second quarter were department store-cum-supermarkets, which grew by 9%, and fashion and fashion accessories, which grew by 9.8% Sales growth for the specialty stores sub-sector, which includes sportswear and fitness equipment retailers, was up 9.4%. Full-year projection has been maintained at 6%, which will translate to RM88.2bn, up from RM83.2bn in 2011. The data compiled by the Retail Group Malaysia on behalf of the Malaysia Retailers Association does not take into account purchases of big ticket items such as houses and cars. "The performance of the retail industry in Malaysia will remain healthy for the rest of the year despite a poor outlook on major Western economies," RGM said on its report. (BT)

Oldtown Bhd's new RM61m manufacturing plant in Ipoh, Perak is expected to be completed by year-end, slightly behind its original third-quarter 2012 target date, and will start commercial production of instant white coffee mix and instant milk tea mix by early next year, its group managing director Lee Siew Heng said. "In the long run, we plan to relocate our food processing operations, instant coffee mix and instant milk tea mix manufacturing plants, and roasted coffee powder facilities scattered in various locations of Ipoh to one single location at Tasek Industrial Estate. The new factory will enable us to operate more efficiently by centralising all the manufacturing facilities under one roof," Lee said. With the additional production capacity, Lee said the company also plans to penetrate various markets in Asia in line with its international market development plans. (Sun)

Bonia Corp Bhd, whose founder Chiang Sang Sem is in talks with certain groups to strengthen his family holdings in the leatherwear firm, is likely buying from friendly parties, given the lower-than-expected price he has indicated he may pay for additional shares. Bonia had said late last Friday that Chiang is in discussion with several parties to acquire "certain stakes" in the company at an indicative price of between RM1.80-RM2.00/share. The indicative price range was much lower than Bonia's closing share price of RM2.59 on Friday, resulting in the stock succumbing to selling pressure yesterday. (BT)

IGB Real Estate Investment Trust (REIT) is offering 670m new units under its initial offer price (IPO) at an indicative retail price of RM1.25 a unit. According to its prospectus which was released on Bursa Malaysia, at the indicative price of RM1.25, it would be raising RM837.50m. Of the 670m shares, it said that 469m units would be offered to Malaysian and foreign institutional investors and selected investors. Another 201m units would be offered to the public, eligible directors and employees of the group. It would also be subject to the clawback and reallocation provision in connection with the listing and quotation for 3.4bn new units on the Main Market of Bursa Malaysia Securities. (Starbiz)

Ingenuity Solutions is expected to be taken private by  Ninetology Marketing according to sources. The details of the takeover was still sparse apart from an invitation by Ninetology to announce the takeover to the press on Thursday. (Star Biz)

Eversendai: Targets CIS nations with Azerbaijan as entry point. Eversendai plans to expand its operations to the Commonwealth of Independent States in anticipation of the regions expected growth, singling out Azerbaijan as an entry point. We are currently negotiating a project in Azerbaijan, (which is) in the advanced stage, and were hoping well get an order soon, Eversendai Executive Chairman Datuk AK Nathan. The project is a high-rise building. (Source: Malaysian Reserve)

Masteel proposes placement for working capital
Masteel has proposed a private placement of up to 31.59m shares or 10% of its issued and paid-up capital to raise money for working capital purposes. The steel bars and billet maker has yet to decide the price of the placement shares and the buyers. (Malaysian Reserve)

20120828 0941 Local & Global Economy Related News.

Malaysia on Monday signed an agreement and institutional cooperation contract with  Norway on  'Regulatory Framework for Aquaculture in Malaysia', to contribute to sustainable development of aquaculture in Malaysia. With the agreement, Norway will not only help Malaysia develop a regulatory framework for aquaculture farming, but will also provide experts and training for Department of Fisheries (DOF) staff in the field. The total funding for the project is on a cost-sharing basis, where Norway will provide RM3.253m in funding while Malaysia will contribute RM3.275m, starting 2012-15. (Bernama)

The  US Federal Reserve  began releasing quarterly financial results on Monday, in an effort to increase transparency at a time many Republicans are demanding more accountability from the central bank. (Reuters)

China’s industrial profits  fell 2.7% yoy in the year-to-Jul (-2.2% in Jun). (Bloomberg)

China is likely to unveil long-awaited income distribution reform in Oct and is now seeking opinions from ministers and top leaders. The reform would cover 10 aspects, including minimum wages, the sharing of state firms' dividends, taxes of high-income earners, and the salaries of management team at state financial institutions. (Reuters)

South Korea said resuming negotiations with second-biggest trading partner Japan over a  free trade agreement will be difficult given a maritime territorial spat. (Bloomberg)

Moody's Investors Service raised  South Korea's sovereign credit rating by one notch to Aa3, on par with that of China and Japan, citing the country's strong fiscal fundamentals and resilience to external shocks amid growing concerns about Europe's financial crisis and a global slowdown. (WSJ)

The European Central Bank will stay within its mandate and intervene on the secondary debt markets only in conjunction with European Union rescue funds, board member Joerg Asmussen said. (AFP)

Germany and France agreed to drive ahead measures on closer European integration in a renewed show of unity by the region’s two biggest economies to fix the crisis in the euro zone. (Bloomberg)

Spain expects to use about €60bn, or US$75bn, of the €100bn of bank rescue financing  offered by European finance ministers in Jun, according to the Spanish economy minister, Luis de Guindos. Spain could also make stronger fiscal commitments if the ECB eased its borrowing costs by buying its government bonds (NY Times)

According to the latest  MasterCard Worldwide Index for Consumer Confidence. consumers in the Asia Pacific region remain most optimistic as concerns about slow growth lessen in the markets of India (82.1 Index points), mainland China (77.4), Viet Nam (77.2) and Thailand (75.8), while the least optimistic markets are Japan (23.6), Taiwan (25.7) and Australia (39.2).(Vietnam News)

Southeast Asian nations must redouble efforts to  bridge development gaps which threaten the region's efforts to create an EU-style single market, Cambodia's prime minister  Hun Sen  said, adding that building an ASEAN economic community by 2015 is the “top priority.” (AFP)

India on Monday  invited China to invest in its  new flagship manufacturing zones as part of a push to broaden commercial links and cut a ballooning trade deficit with its Asian neighbour. (AFP)

Thailand’s Treasury Department is interested in buying land and other property  in the  troubled eurozone due to the attractive prices currently available there. (The Nation)

Thailand’s unemployment has been rising in the wake of the 2011 flood crisis and the sharp hike in the minimum daily wage this year, and joblessness could go higher too, according to National Economic and Social Development Board (NESDB) secretary-general Arkhom Termpittayapaisith. (The Nation)

Indonesia is targeting the  absorption of the 2013  state budget to reach 40-50% in 1H13. (IFT)

Bank Indonesia has warned that accelerating lending growth may cause the economy to overheat. The bank will aim to curb high  credit growth, which reached 25.8%, in the first half of 2012. (Antara News, Jakarta Globe)

The RBI said investment in new infrastructure projects fell 46% in the year through Mar, dropping from 3.9tr rupees (US$70bn) to 2.1tr rupees. (WSJ)

Vietnam’s  exports rose 17.8% yoy in Aug (19% in Jul), while  imports increased 6.7% yoy (7.3% in Jul). The  trade balance sank to a deficit of US$150m after posting a surplus of US$579m in Jul. The market had been expecting the trade balance to be in equilibrium in Aug. (Bloomberg)

Vietnam’s agricultural, forestry and seafood exports in 8M12 rose 9.7% yoy to hit US$18.1bn, with the two largest markets being the US and Germany, the trade with whom rose by 12.5% and 12.4% respectively. (Vietnam News)

Vietnam’s retail sales in the year-to-date grew 17.9% yoy in Aug, down from 18.7% in Jul. (Bloomberg)

Vietnam's index of industrial production rose 4.4% yoy in Aug, slowing from an annual rise of 6.1% in Jul. (Reuters)

20120828 0914 Global Markets Related News.

Asia FX By Cornelius Luca - Mon 27 Aug 2012 16:54:12 CT (Source:CME/www.lucafxta.com)
The financial were adverse to risk on Monday, as the summer vacations are petering out, but losses were timid. Meanwhile, the markets continue to be looking for further bond buying from both the Fed and the ECB. All of the foreign currencies but the Canadian dollar ended lower. The US stock markets slipped and the gold/oil spread closed higher. The short-term outlook for most foreign currencies is sideways. The medium-term outlook for most of the foreign currencies is sideways. The LGR short-term model is long across the board.  Good luck!

Today's economic calendar
Australia: HIA new home sales for July

Most Asian Stocks Rise Before U.S. Data, Federal Reserve (Bloomberg)
Most Asian stocks rose as investors await a report on U.S. gross domestic product that’s expected to show growth in the world’s biggest economy is improving and indications of policy direction from the Federal Reserve. Toyota Motor Corp. (7203), the world’s largest carmaker by market value, added 0.8 percent in Tokyo. Sharp Corp. climbed 3.6 percent as the company held talks with Foxconn Technology Group, which is seeking to renegotiate its proposed investment in the loss-making Japanese television maker. BHP Billiton Ltd., the world’s biggest mining company, slipped 0.7 percent in Sydney as copper futures fell.
The MSCI Asia Pacific Index (MXAP) was little changed at 119.83 as of 9:34 a.m. in Tokyo, with about three shares rising for every two that fell on the gauge. The measure climbed 10 percent from a June low through yesterday on bets the U.S., Europe and China will take action to propel economic expansion. Investors are awaiting Federal Reserve Chairman Ben S. Bernanke’s speech on Aug. 31 at the Kansas City Fed’s annual economic symposium in Jackson Hole, Wyoming. “The market’s primary focus is on Wednesday’s U.S. GDP report and Friday’s Jackson Hole talk by Bernanke, who might provide some guidance on upcoming Fed monetary policy,” said Matthew Sherwood, Sydney-based head of investment markets research at Perpetual Investments, which manages about $25 billion.

Japan Stocks Rise Ahead Of U.S. Growth Data, Fed Meeting (Bloomberg)
Japanese stocks gained ahead of the release of U.S. economic data tomorrow and as investors wait for hints of stimulus from the Federal Reserve’s symposium at the end of the week. Toyota Motor Corp., a carmaker that gets 25 percent of its revenue in North America, rose 0.8 percent. Aozora Bank Ltd. (8304) surged the most in more than two years after saying it plans to repay public funds. Osaka Titanium Technologies Co. sank 6.9 percent after the metal producer cut its earnings forecast amid slumping demand in Europe and emerging markets. The Nikkei 225 Stock Average (NKY) gained 0.5 percent to 9,134.66 as of 9:20 a.m. in Tokyo, with volume 11 percent below the 30- day average ahead of the Fed meeting in Jackson Hole, Wyoming. The broader Topix Index added 0.2 percent to 757.19, with about eight shares rising for every five that fell.
“The market’s primary focus is on Wednesday’s U.S. GDP report and Friday’s Jackson Hole’s talk by U.S. Fed Chairman Ben S. Bernanke, who might provide some guidance on upcoming Fed monetary policy,” said Matthew Sherwood, Sydney-based head of investment markets research at Perpetual Investments, which manages about $25 billion.

U.S. Stocks Fall As Investors Await Fed Stimulus Signals (Bloomberg)
U.S. stocks fell, following the first weekly decline in about two months for the Standard & Poor’s 500 Index, as investors awaited indications on whether the Federal Reserve will provide further stimulus measures. Hewlett-Packard Co., Alcoa Inc. and Bank of America Corp. dropped at least 1.1 percent to pace losses in the biggest companies. Apple Inc., (AAPL) the most valuable company, climbed 1.9 percent after a jury found Samsung Electronics Co. infringed six of seven patents for its mobile devices. Google Inc. (GOOG), which offers the Android mobile software, declined 1.4 percent. The S&P 500 slid 0.1 percent to 1,410.44 at 4 p.m. New York time. The Dow Jones Industrial Average fell 33.30 points, or 0.3 percent, to 13,124.67. The Nasdaq-100 Index gained 0.2 percent to 2,782.55, after rising to the highest since 2000 during the day. Volume for exchange-listed stocks in the U.S. was 4.5 billion shares, the lowest level since at least 2008 excluding days surrounding holidays, data compiled by Bloomberg show.
“There’s no great conviction in either direction,” said Richard Sichel, who oversees $1.6 billion as chief investment officer at Philadelphia Trust Co. He spoke in a phone interview. “There are a couple of bright spots, such as Apple. People are looking ahead for Fed signals. I believe Bernanke’s speech will probably be more of the same. It’s more likely that it will be a continuation of what we’ve been hearing and less of an event.” Fed Chairman Ben S. Bernanke probably won’t use his Aug. 31 speech at the Fed’s annual symposium in Jackson Hole, Wyoming, to suggest a third round of bond buying is at hand, according to economists such as Michael Feroli at JPMorgan Chase & Co. and James O’Sullivan at High Frequency Economics.

European Stocks Climb Amid Debt-Crisis Talks (Bloomberg)
European stocks rose as Germany’s Finance Minister Wolfgang Schaeuble said the continent’s two largest economies will create a working group to strengthen the euro area’s fiscal and monetary union. Deutsche Bank AG (DBK) and BNP Paribas SA (BNP) both gained more than 2 percent. Nokia Oyj (NOK1V) jumped 7.7 percent after a jury found rival Samsung Electronics Co. had violated Apple Inc. patents. Q-Cells SE (QCE) surged 12 percent after South Korea’s Hanwha Group signed a deal to acquire the insolvent German company. The Stoxx Europe 600 Index added 0.5 percent to 269.2 at the close, after earlier falling as much as 0.2 percent. The volume of shares changing hands on the equity benchmark was 64 percent lower than the average of the last 30 days, according to data compiled by Bloomberg, because the U.K. market was closed for a public holiday.
“Markets are more driven by political headlines than by fundamental news,” said Lex Van Dam, who manages $500 million at Hampstead Capital LLC in London. “It’s a very quiet market which is no surprise for a U.K. bank holiday. Real investors remain on the side lines.” Schaeuble said today that Germany and France will seek to develop common proposals on a fiscal, banking and monetary union. He also told reporters, after meeting with French Finance Minister Pierre Moscovici in Berlin today, that the two countries will look for measures to boost economic growth. Next month, the European Central Bank will formulate a bond-buying plan and representatives of Greece’s international creditors will issue a progress report. A German court will also announce its decision on the legality of the euro area’s proposed permanent bailout fund.

Emerging Stocks Fall To Three-Week Low As Chinese Profits Slump (Bloomberg)
Emerging-market stocks dropped to a three-week low as Chinese industrial companies in July posted their biggest decline this year, heightening concern that global demand for natural resources will continue to ebb. The MSCI Emerging Markets Index (MXEF) fell 0.5 percent to 960.86 at 5:20 p.m. in New York, the lowest close since Aug. 3. Samsung Electronics Co. (005930) declined the most in almost four years in Seoul after a U.S. jury ruled it infringed Apple Inc.’s patents. Samsung Electronics, the heaviest weighted stock on the MSCI Emerging Markets Index, fell the second most of any stock on the gauge. The Shanghai Composite Index (SHCOMP) retreated 1.7 percent, the most in six weeks, while Brazilian iron-ore producer Vale SA (VALE3), whose top export market is China, declined as the Bovespa (IBOV) index fell for a third session, its longest losing streak in a month.
Chinese industrial companies’ profits fell 5.4 percent last month after slipping 1.7 percent in June, the statistics bureau said on its website. Chinese industrial companies including China Petroleum & Chemical Corp. (600028) reported a decline in profits. China Petroleum, Asia’s biggest oil refiner, recorded its lowest half-year profit since 2008. Commodities, including oil, declined.

FOREX-Euro climbs but euro zone events may cap gains
LONDON, Aug 27 (Reuters) - The euro inched up after an influential German business survey was not as bad as expected, although it may struggle to retain gains in coming weeks, which could be decisive in the long-running euro zone crisis.
"The Ifo numbers do not change the outlook for the euro," said Kasper Kirkegaard, FX strategist at Danske Markets, Copenhagen, adding investors had grown used to soft economic data in recent months.

Dollar Remains Higher Versus Yen Before Confidence Report (Bloomberg)
The dollar remained higher following a two-day advance against the yen ahead of U.S. reports that economists say will point to improvement in consumer sentiment and regional manufacturing. The Dollar Index maintained a gain before Federal Reserve Chairman Ben S. Bernanke delivers a speech on Aug. 31 in Jackson Hole, Wyoming as investors are weighing whether the central bank will embark on another round of bond purchases, or quantitative easing. Demand for the euro was limited ahead of German data forecast to show consumer sentiment will fall for the first time in three months. “The market may be open for disappointment” at Jackson Hole, said Derek Mumford, a director in Sydney at Rochford Capital, a currency risk-management company. “Assuming there won’t be significant quantitative easing, then the U.S. dollar could have quite a strong performance in the next couple of months.”
The dollar traded at 78.75 as of 9:21 a.m. in Tokyo after rising 0.3 percent in the past two sessions to 78.74 yesterday. The euro was at $1.2497 after losing 0.5 percent since Aug. 23 to $1.2499. It bought 98.41 yen from 98.43. The Dollar Index (DXY), which IntercontinentalExchange Inc. uses to track the greenback against the currencies of six U.S. trading partners, was little changed at 81.693 following a two- day advance of 0.4 percent.

U.S. Existing-Home Sales Rise From Eight-Month Low: Economy (Bloomberg)
Sales of existing homes climbed in July from an eight-month low, showing the cheapest mortgage rates on record are underpinning a market struggling to join the U.S. economic recovery that began three years ago. Purchases increased 2.3 percent to a 4.47 million annual rate, figures from the National Association of Realtors showed today in Washington. The data were posted on the group’s website ahead of the usual 10 a.m. release. The median forecast of 73 economists surveyed by Bloomberg called for a rise to a 4.51 million rate. “This is a continuation of good news, but we’ve got to continue to build momentum,” said Brian Jones, a senior U.S. economist at Societe Generale in New York, who forecast sales would rise to 4.46 million. “We’ve still got a long way to go because the level is so low.”
Restrictive lending rules, a lack of inventory and lingering unemployment may be preventing a rebound to the 5 million to 5.5 million sales pace that the real-estate agents’ group said constitutes a “normal” market. Minutes of the Federal Reserve’s most recent meeting showed today that many policy makers said more stimulus would be needed unless the economy exhibited signs of a durable pickup. Stocks erased earlier losses after the Fed minutes, with the Standard & Poor’s 500 Index rising less than 0.1 percent to 1,413.49 at the 4 p.m. close in New York after falling as much as 0.5 percent. The S&P Supercomposite Homebuilding Index jumped 3.1 percent.

Japan Cuts Economic Assessment As BNP Says Contraction Looms (Bloomberg)
Japan’s government downgraded its assessment of the world’s third-biggest economy for the first time in 10 months as some analysts forecast that gross domestic product will shrink this quarter. Risks include a “further slowing down of overseas economies and sharp fluctuations in the financial and capital markets,” the Cabinet Office said in a monthly report released in Tokyo today. The government cut its view on personal consumption, home- building, exports, imports and industrial production, while raising its assessment of the labor market. It lowered its evaluation of the U.S., Europe, China, the rest of Asia except India, and the global economy, saying Japan’s overseas shipments are “growing weaker.” The Nikkei 225 Stock Average gained 0.5 percent as of 9:25 a.m. in Tokyo as investors await U.S. economic data and an Aug. 31 speech by Federal Reserve Chairman Ben S. Bernanke to gauge the outlook for that nation’s monetary policy.
The Japanese government will work with the central bank to counter deflation, today’s report said. JPMorgan Securities Japan Co. forecasts a 0.3 percent annualized decline in gross domestic product in the three months through September, while BNP Paribas SA estimates a 0.9 percent fall. The median estimate in a Bloomerg News survey compiled this month was for 1 percent growth, partly supported by earthquake reconstruction work.

Japanese Home Purchases Rise Before Corolla-Size Tax: Mortgages (Bloomberg)
Record low mortgage rates and the prospect of a consumption tax increase that will add the price of a new Toyota Corolla to the cost of an average home spurred Sumiko Morigaki into action. “Tax hikes have been looming, so that gave me a push to buy,” said Morigaki, 43, a manager at an apparel retailer in Tokyo, who bought a three-bedroom condominium in Kanagawa prefecture, neighboring Tokyo, earlier this year. New housing loans jumped 14.7 percent in the second quarter this year from a year ago, the most since March 2006, buoying a housing market entering its third decade of deflation. About 1.3 trillion yen ($16.5 billion) of extra home purchases are expected by the end of March 2014, in the year when the sales tax increases to 8 percent from 5 percent, according to estimates by NLI Research Institute, a Tokyo-based research and consulting unit of Nippon Life Insurance Co.
“The housing market has been dead for so long it shouldn’t take much to put a flame under it,” said Nicholas Smith, a strategist at CLSA Asia-Pacific Markets Ltd. in Tokyo. “Banks, particularly regional banks, stand to benefit from the rush of home loans ahead of the tax hike.” Housing investments rose 3.8 percent to 13.1 trillion yen in the fiscal year ended March 31, marking the first increase in five years, according to government data. Japan’s banks offered 2.98 trillion yen worth of new loans for home purchases in the three months ended June 30, bringing loans outstanding to 107.1 trillion yen, according to the Bank of Japan. An index of residential land prices has slid by half from its 1991 peak, Japan Real Estate Institute data show.

Japan Contraction Risk Rises On Faltering Global Demand: Economy (Bloomberg)
Aug. 27 (Bloomberg) -- Japan’s risk of an economic contraction this quarter has increased as faltering demand from Europe to China drags down exports, strengthening the case for more government measures to support growth. JPMorgan Securities Japan Co. forecasts a 0.3 percent annualized decline in gross domestic product in the three months through September after previously seeing 1 percent growth. BNP Paribas SA estimates a 0.9 percent fall after earlier predicting no change. China’s failure to secure an economic rebound is adding to austerity measures in Europe and unemployment in the U.S. in limiting prospects for Japanese trade and growth. Pressure may build for an extra government budget and additional stimulus from the Bank of Japan as subsidies for purchases of fuel- efficient cars wind down, damping consumer spending.
“We’ve revised down our forecast because the global economy is looking weaker than we anticipated,” said Ryutaro Kono, chief Japan economist at BNP and a former government nominee for the central bank board. “We expected a gradual rebound for the emerging economies but the recent data aren’t signaling it. Europe continues to slump and exports to the U.S. also are slowing.” Japan will downgrade its assessment of the domestic economy for the first time in 10 months in a report to the cabinet tomorrow, according to the Nikkei newspaper. The nation had a wider-than-estimated trade deficit in July as shipments to the European Union fell 25 percent from a year earlier and those to China slid 12 percent.

Korea’s Rating Raised By Moody’s On Resilience To Shocks (Bloomberg)
South Korea’s sovereign debt rating was raised by Moody’s Investors Service to a par with Japan’s after Asia’s fourth-largest economy strengthened its resilience to crises. “Korea’s strong fiscal fundamentals enable a relatively large degree of policy space to cope with contingent domestic risks and external shocks,” Moody’s said in a statement today. The company elevated South Korea one step to Aa3, the fourth- highest ranking and one also shared with China. The upgrade is a vote of confidence in President Lee Myung Bak’s efforts to strengthen the nation’s ability to cope with financial turbulence even as his popularity wanes ahead of the end of a five-year term. The move also reflects South Korea’s fiscal discipline, with government debt at 33 percent of gross domestic product, against 108 percent for advanced economies as a whole, according to the International Monetary Fund.
“The fiscal situation is the strongest aspect of Korea’s economy,” said Lim Ji Won, an economist at JPMorgan Chase & Co. in Seoul. “A lot depends on how the government deals with the aging problem in the longer term, but in the next few years the fiscal situation will be relatively strong.” Like Japan, South Korea’s population is aging after its birth-rate declined, potentially imposing a higher pension-cost burden on the economy as fewer workers support greater numbers of retirees.

Spain Deficit Pain Bites Consumers As Rajoy Steps Up Cuts (Bloomberg)
Spanish Prime Minister Mariano Rajoy’s austerity drive will intensify this week as a sales-tax increase tightens the squeeze on consumers whose spending is already plummeting. The move to raise the value-added tax on Sept. 1 will follow a flurry of data showing pressure building on household finances in the euro area’s fourth-biggest economy, home to a third of its unemployed. A report today showed mortgages fell 25.2 percent from a year ago in June after a 30.5 percent drop in May. Meanwhile, the Health Ministry today said spending on prescription drugs fell 23.9 percent from a year ago in July, the steepest drop since the series started in 1999, after the government last month increased the share patients pay for pharmaceuticals. A breakdown of second-quarter gross domestic product is due tomorrow and inflation on Aug. 30. Retail and current-account data are due Aug. 31 as well as public finance figures.
The data will illustrate the extent of Rajoy’s challenge as he tries to curb the euro region’s third-largest budget deficit and considers whether to seek further international aid. Consumers have already endured a recession lasting three quarters as a prelude to his tax increase due this week and an annual cut in public wages for the month of December.

Germany, France Reconnect In A Push For Crisis Solutions (Bloomberg)
Germany and France agreed to drive ahead measures on closer European integration in a renewed show of unity by the region’s two biggest economies to fix the crisis in the euro zone. German Finance Minister Wolfgang Schaeuble, speaking after talks in Berlin today with his French counterpart, Pierre Moscovici, said the two countries will create a working group to advance European Union cooperation on banking union, fiscal union and the strengthening of monetary union. “We’re having to deal with a phase of weakening growth in the global economy but also in Europe,” Schaeuble told reporters. “We want to take joint decisions” to counter that. French President Francois Hollande said later in Paris that Franco-German ties are key to Europe’s reorientation.
The common French-German action signals a turnaround in relations after Hollande led a revolt at a June summit against Chancellor Angela Merkel’s austerity-first doctrine for combating the financial crisis. It builds on a visit to Berlin by Hollande last week when he and Merkel agreed to stand behind the Greek government as it strives to overhaul its economy.

Hungary To Refrain From Rate Cut On Inflation, Bailout Concern (Bloomberg)
Hungary’s central bank will probably refrain from cutting the European Union’s highest benchmark interest rate because of accelerating inflation and possible delays in obtaining a bailout. The Magyar Nemzeti Bank will leave the two-week deposit rate at 7 percent for an eighth month, according to 15 of 16 economists in a Bloomberg survey. One expects a cut to 6.75 percent. The central bank will announce the decision at 2 p.m. in Budapest. Policy makers last month voted five to two to keep rates unchanged, rejecting arguments that easing policy would prop up the economy that entered its second recession in four years, minutes of the July 24 meeting show. The majority argued that the central bank should wait for the outcome of bailout talks with the International Monetary Fund and the European Union before lowering borrowing costs.
“We think the National Bank of Hungary will resist pressures and keep its 7 percent base rate on hold, however, this is a close call,” Daniel Hewitt, an economist at Barclays Plc (BARC) in London, said in an e-mailed note. Forward-rate agreements used to wager on interest rates in one month fell 7 basis points to 6.87 percent yesterday, the lowest since November. The FRAs traded 28 basis points below the Budapest Interbank Offered Rate, the biggest spread in more than two years and signaling expectations for a quarter-point rate cut. A basis point is 0.01 percentage point.

German Business Confidence Falls For A Fourth Month (Bloomberg)
German business confidence fell for a fourth straight month in August as the sovereign debt crisis curbed growth in Europe’s largest economy. The Ifo institute in Munich said its business climate index, based on a survey of 7,000 executives, dropped to 102.3 from 103.2 in July. That’s the lowest reading since March 2010. Economists predicted a decline to 102.7, according to the median of 37 forecasts in a Bloomberg News survey. German economic growth slowed to 0.3 percent in the second quarter from 0.5 percent in the first as the debt crisis damped demand for exports and prompted companies to postpone investments. While sales to faster-growing markets outside Europe and domestic spending are helping to insulate Germany from the turmoil, the Bundesbank said last week that the prevailing uncertainty may cause the economy to cool further.
“Recent economic data are not encouraging,” said Jens- Oliver Niklasch, an economist at Landesbank Baden-Wuerttemberg in Stuttgart. “The construction industry as well as the export industry will see a slowdown in the months to come.” Ifo’s gauge of the current situation eased to 111.2 from 111.5 in July, while a measure of executives’ expectations fell to 94.2, the lowest since June 2009, from 95.5. The euro rose after the report before easing to trade little changed at $1.2521 at 11:45 a.m. in Frankfurt, up 0.1 percent today. European stocks were flat, with the Stoxx 600 Index (SXXP) down 0.1 percent at 267.69.

Merkel tries to calm storms over Greece, ECB policy (Reuters)
Angela Merkel tried to calm a growing storm over euro zone crisis strategy on Sunday after the Bundesbank likened ECB bond-buying plans to a dangerous drug and a conservative ally of the German leader said Greece should leave the currency bloc by next year.

20120828 0914 Global Commodities Related News.

Drought-Driven Food Costs May Damp Sentiment: Economy (Bloomberg)
The worst U.S. drought in at least 50 years may restrain consumer confidence and spending as it pushes Americans’ grocery bills higher later this year. Food prices will increase an average 4 percent annual rate in the nine months ending June 2013, up from 1.5 percent currently, said Michael Feroli, chief U.S. economist at JPMorgan Chase & Co. in New York. That may trim real disposable incomes by 0.3 percentage point from the fourth quarter of 2012 through the first half of next year and reduce spending by a similar amount, he estimates. The projected food-price increase will squeeze budgets of households already contending with a 13 percent gain in gasoline prices since early July and unemployment that is stuck above 8 percent three years into the economic recovery. Consumer sentiment has yet to return to pre-recession levels, confidence gauges show.
“Energy is hitting us now, food is going to hit us later,” Feroli said. “It will be a headwind for consumers. It’s going to damp people’s perceptions of the economy.” While the effect on total inflation will be limited and transitory, food and fuel costs have a disproportionate impact on confidence because consumers make frequent stops at grocery stores and filling stations. Food and fuel together account for about 24 percent of the consumer-price index, according to the Labor Department.

DTN Closing Grain Comments 08/27 14:32 Grains Drift Lower Monday (CME)
The grain complex was unable to hold on to overnight gains with the November bean contract collapsing over 40 cents from its new all-time high. Volumes were light as most traders stood on the sideline waiting to see what type of damage is inflicted by Hurricane Isaac.

GRAINS: U.S. soybeans hit new contract highs after a tour of experts concluded the drought damage to the U.S. soybean crop is worse than government forecasts. (Reuters)

Pro Farmer: After the Bell Wheat Recap(CME)
Wheat futures finished slightly lower in most contracts at all three exchanges following a choppy day of price action. With corn not providing support today, wheat futures were vulnerable to selling pressure. Fundamental pressure came from rains, which are expected to move into winter wheat areas this week and provide needed soil moisture ahead of planting.

Wheat Market Recap Report(CME)
December Wheat finished down 7 1/4 at 881 1/4, 18 off the high and 1/4 up from the low. March Wheat closed down 6 1/2 at 892. This was 1/2 up from the low and 17 1/4 off the high. December Chicago wheat traded sharply lower into the close today while the July 2013 contract only saw marginal loses. Kansas City and Minneapolis wheat ended the day lower as well. The wheat market struggled to hold a firm footing today after weather conditions for most US wheat growing areas were seen as a negative force. The fact that Egypt bought another round of Black Sea wheat over the weekend and corn has taken on a slightly negative, short term tone weighted on the wheat market. Export inspections for the week ending August 27th were reported at 18.88 million bushels vs. 23.42 the week prior and 24 million bushels are needed each week to reach the current USDA estimate. The export pace is 19% of the USDA estimate vs. the 5 year average of 23%.
Rainfall in Australia continues to disappoint which offered underlying support to the complex. Private analyst's now suggest that Western Australia winter wheat production could fall near 6 million tonnes from the 11.6 million tonnes seen last year. The next 2-3 weeks will be a critical period of growth for their wheat crop. Outside markets offered limited direction with the US Dollar steady on the day and US stocks slightly higher. December Oats closed down 4 1/2 at 387. This was 7 up from the low and 9 1/4 off the high.

Pro Farmer - Corn, Soybean Crops May Hit 9-Year Lows on Drought(CME)
Crop Tour Reveals "Extreme" Stress Across Midwest
The U.S. corn and soybean crops are expected to shrink to the smallest in nine years after severe drought hit most of the prime Midwest growing areas, advisory firm Pro Farmer said following its annual Crop Tour last week. Farmers will harvest about 10.478 billion bushels of corn this year, Pro Farmer said August 24, citing results from fields surveyed in Illinois, Iowa and five other Midwest states. Based on Pro Farmer’s forecast, the harvest would be down 15% from the 2011 crop and the lowest since the crop totaled 10.09 billion bushels in in 2003. Pro Farmer’s estimated U.S. corn yield, at 120.25 bushels an acre, would be a 17-year low, according to U.S. Department of Agriculture data. The devastating impact of what by some measures is the worst U.S. drought since 1956 were evident as crop scouts found parched fields and stunted plants across the Midwest. Corn in eastern Indiana, for example, showed “extreme drought stress,” Pro Farmer said.
“A lack of ears and grain length pulled yields down.” In South Dakota, Pro Farmer found “absolutely the worst corn crop we’ve sampled since 1998,” when the firm began surveying states in the region. Pro Farmer estimated the U.S. soybean crop at 2.6 billion bushels, down 15% from last year and the smallest since 2.45 billion bushels in 2003. For nationwide yields, Pro Farmer projected the crop at an average of 34.8 bushels an acre, also the lowest since 2003.
The soybean crop from Ohio to Nebraska “needs a drink right now to realize these yield estimates,” Pro Farmer said. Corn and soybean futures traded on Chicago-based CME Group already rallied to all-time highs this summer as the drought stirred concern over tightening global grain supplies. In late trading August 27, December corn futures rose ¼ cent to $8.08 ¾ a bushel. December futures are up almost 60% since mid-June and reached a record high of $8.49 on August 10. November soybean futures fell 10 ¼ cents to $17.21 ¼ a bushel, after notching a record at $17.60 ½ earlier in trading.

Pro Farmer: After the Bell Corn Recap(CME)
Corn futures ended 5 1/4 to 7 3/4 cents lower in the September through July contracts, which was a low-range close. Far-deferred futures ended mixed. Futures were firmer in overnight trade, but softened this morning and extended losses as soybeans drifted lower. Corn needs a dose of fresh positive news to keep bulls energized, but signs of softening demand due to high prices are limiting buying interest.

Corn Market Recap for 8/27/2012(CME)
December Corn finished down 7 3/4 at 800 3/4, 17 1/4 off the high and 1/2 up from the low. March Corn closed down 7 at 801 1/2. This was 1/2 up from the low and 16 off the high. December corn traded sharply lower into the close and settled at it's lowest level since August 16th. Technical selling and profit taking were noted today and sluggish export inspection numbers added to the downside momentum. Export inspections for the week ending August 27th were reported at 14.46 million bushels vs. 21.51 the week prior and 47.26 million bushels are needed each week to reach the current USDA estimate. The slow sales pace reflects a demand shift from major importers to South American and Black Sea grain. Iowa ethanol margins dropped to a 25 cent per bushel loss from a 17 cent per bushel loss the week prior. The higher trend in corn prices mixed with steady ethanol prices continues to tighten margins for ethanol facilities in Iowa.
The corn market received bullish news out of Europe after the European Commission crop monitoring unit cut their corn production estimate to 6.28 tonnes per hectare vs. 6.73 last month and 7.62 last year. Outside markets offered limited direction with the US Dollar steady on the day and US stocks slightly higher. November Rice finished down 0.095 at 15.595, 0.135 off the high and 0.005 up from the low.

Spec net long in CBOT corn surges to 17-month peak-CFTC(Reuters)
Speculators raised their bullish bets on Chicago Board of Trade corn futures and options in the past week to the largest in 17 months on deepening worries about a drought-shortened U.S. crop, regulatory data released on Friday showed.

Speculators double cotton long, raise coffee short-CFTC(Reuters)
Speculators doubled their net long position in cotton on ICE Futures U.S., becoming their most bullish on fibers since February, while they raised their net short in arabica coffee to multiyear highs in the week to Aug. 21, U.S. Commodity Futures Trading Commission data showed on Friday.

Robusta Coffee Beats Arabica As Folgers Cut Prices: Commodities (Bloomberg)
Robusta is beating arabica for the first time in four years as roasters use more of the cheaper grade and farmers reap fewer beans in Vietnam, the top grower. While robusta, used in espresso and instant coffee, typically costs less than the arabica used to make specialty drinks by retailers including Starbucks Corp. (SBUX), its discount has narrowed to 70 cents a pound, from 145 cents at the end of 2011. The spread will contract to 55 cents by the end of the year, the lowest since July 2009, as demand increased to a record, the average of 10 trader estimates compiled by Bloomberg shows. Roasters used more robusta to control prices as arabica surged to a 14-year high in May 2011 after the smallest Colombian harvest since 1976 and reduced output from Brazil, the biggest supplier. Even after falling 26 percent this year, arabica is still more expensive than robusta and is the worst- performing commodity tracked by Bloomberg.
Retailers are reluctant to change the taste of their products again so soon in the $75.5 billion global market. “We have additional demand the market has to cater for and roasters are unlikely to shift back to arabica,” said Kona Haque, an analyst at Macquarie Group Ltd. in London who has followed agricultural markets for 14 years. “A smaller crop in Vietnam is very bullish for robusta prices.” Robusta rose 14 percent to $2,055 a metric ton (93 cents a pound) this year on NYSE Liffe in London as arabica declined to $1.67 a pound ($3,674 a ton) on ICE Futures U.S. in New York after Brazil’s government forecast a record crop for this year. The Standard & Poor’s GSCI gauge of 24 commodities added 3.4 percent and the MSCI All-Country World Index (MXWD) of equities gained 8.4 percent. Treasuries returned 1.9 percent, a Bank of America Corp. index shows.

Isaac To Reach Hurricane Strength On Path To Louisiana (Bloomberg)
Tropical Storm Isaac strengthened to near hurricane intensity as it forced the shutdown of about 78 percent of U.S. Gulf of Mexico oil production and sent gasoline futures to a four-month high. The storm halted 48 percent of natural gas production in the Gulf and forced evacuations from 346 production platform and 41 rigs, the Bureau of Safety and Environmental Enforcement said today. Four refineries in Louisiana are shut, totaling 832,700 barrels per day, or 4.8% of U.S. capacity, and four are running at reduced rates. Isaac’s center was about 255 miles (410 kilometers) southeast of the mouth of the Mississippi River with top winds of 70 miles per hour, 4 below hurricane level, moving northwest at 12 mph, the National Hurricane Center said in an advisory at 5 p.m. East Coast time. It’s on track to go ashore Aug. 29 south of New Orleans, possibly as a Category 2 hurricane. President Obama issued a declaration of emergency for Louisiana, authorizing agencies to coordinate relief efforts.
The storm, which has winds extending 205 miles from its core, or almost the distance between Boston and New York, is expected to become a hurricane overnight.

Energy Department - U.S. Coal Output up 3.3% in Past Week(CME)
Prices Down 22% From Year Ago
U.S. coal production rose to about 20.45 million short tons during the week ended August 18, up 3.3% from the previous week but down 3.7% from a year earlier, the Energy Information Administration said in a report. Production from coal mines west of the Mississippi River rose 51,000 tons to 12.15 million tons, while output east of the river increased 150,000 tons to 8.3 million tons. So far this year, U.S. coal production, at 642.1 million tons, is down 5.4% from the same period in 2011. Central Appalachian coal averaged $63.10 per ton during the week ended August 17, up from $59.90 the previous week but down 22% from $80.70 a year earlier. In NYMEX futures trading, Central Appalachian coal futures for September delivery settled at $57.38 per ton on August 23, down from $57.68 at the end of last week.

Natural Gas Update - Natural Gas Prices Fall Third Straight Week(CME)
Power Sector Consumption Down 11%
Benchmark U.S. natural gas prices fell for the third consecutive week, with lower demand from the electric power sector overshadowing stronger residential and industrial use, the Energy Information Administration said. Henry Hub gas was $2.80 per million British thermal units as of August 22, down 2 cents from a week earlier. In NYMEX futures trading August 23, September gas fell 2.4 cents to $2.802, up 3.1% from the end of last week but down almost 13% since the end of July. During the week ending August 22, U.S. gas consumption fell 5.1% from the previous week, led by a drop of 11% in the power sector. Residential and commercial sector consumption rose 4.5%. Working natural gas in underground storage increased to 3.308 trillion cubic feet as of August 17, an implied net injection of 47 billion cubic feet from the previous week. Storage levels are up almost 15% from a year ago.

EU energy market drive sees gas trading growth
--Gerard Wynn is a Reuters market analyst. The views expressed are his own--
LONDON, Aug 24 (Reuters) - Development of European gas hubs and regional markets contrasts with lagging efforts to diversify supplies from Asia, by-passing Russia, and will see a break with oil-indexed contracts.
Gas trading developments reflect a European Union drive to create an internal energy market by 2014 and mirror increased market coupling in electricity.

OIL-Oil rises above $114 on storm threat, stimulus hopes
GENEVA, Aug 27 (Reuters) - Crude oil futures rose above $114 a barrel, lifted by worries that a Tropical Storm could suspend U.S. oil production and hints of another round of monetary stimulus by the U.S. Federal Reserve.
"The storm is probably helping but there's better sentiment generally. Everybody is waiting to see if Jackson Hole will be a turning point for commodities," said Eugen Weinberg, global head of commodities research at Commerzbank.

Oil Trades Near Two-Week Low On Forecasts Isaac Impact Limited (Bloomberg)
Oil traded near the lowest level in almost two weeks on speculation Tropical Storm Isaac’s impact on production in the Gulf of Mexico will be limited. Futures were little changed in New York after dropping for a third day yesterday, the longest losing streak since June. Isaac was near hurricane intensity and may make landfall south of New Orleans tomorrow, according to the National Hurricane Center. The storm has halted about 78 percent of oil production and 48 percent of gas output in the Gulf, the Bureau of Safety and Environmental Enforcement said. “All of the facilities are built to withstand Category 2 storms so it really should be a non-event,” said John Kilduff, a partner at Again Capital LLC, a New York-based hedge fund that focuses on energy. “It’s hard to maintain a rally in the face of a storm of that strength.”
Oil for October delivery was at $95.60 a barrel, up 13 cents, in electronic trading on the New York Mercantile Exchange at 9:25 a.m. Sydney time. The contract yesterday fell 68 cents, or 0.7 percent, to $95.47, the lowest close since Aug. 15. Prices are down 3.3 percent this year. Brent oil for October settlement declined $1.33, or 1.2 percent, to $112.26 a barrel on the London-based ICE Futures Europe exchange yesterday. The European benchmark grade’s premium to West Texas Intermediate closed at $16.79. Isaac’s center was about 255 miles (410 kilometers) southeast of the mouth of the Mississippi River with top winds of 70 miles per hour, 4 mph below hurricane level, and moving northwest at 12 mph, the National Hurricane Center said in an advisory at 5 p.m. East Coast time.

Vale Sees Iron-Ore Rebound As China Producers Cut Supply (Bloomberg)
Vale SA (VALE3), the world’s largest iron- ore producer, expects the steel-making ingredient to rebound this year because current prices aren’t profitable for producers in China and other countries. Iron-ore below $120 a metric ton is a “short-lived” situation, the company’s Investor Relations Director Roberto Castello Branco told reporters at an event in Rio de Janeiro today. Vale is not among the suppliers planning to reduce output because it has low production costs, he said. “The iron-ore price is below the cost for marginal producers not only in China but also in other countries,” Castello Branco said at the sidelines of the Platts SBB Steel Markets in Latin America conference. “If you are a producer with higher costs, you won’t continue producing at a loss; you will stop your operations.”
Iron-ore fell below $100 for the first time since 2009 last week on concern that rising stockpiles and slowing growth in China, the biggest buyer, will cut demand for the raw material. The decline pushed Vale shares to the lowest level in almost three years. BHP Billiton Ltd. (BHP), the world’s biggest mining company, expects “long-term” price declines for its commodities because of a slower Chinese economic expansion, Chief Executive Officer Marius Kloppers told the Inside Business program on the Australian Broadcasting Corp. yesterday.
Vale dropped 1.6 percent to 33.39 reais in Sao Paulo, the lowest level since Sept. 4, 2009. The stock is down 12 percent this year.

Gold Set For Best Year Since 2010 As Stimulus Bets Increase (Bloomberg)
Gold is poised to climb the most in two years as prospects for additional economic stimulus by governments from the U.S. to China stoke demand for the precious metal as a bet against inflation, a survey showed. Bullion for immediate delivery may reach $1,800 an ounce by the year-end, extending gains this year to 15 percent, according to the median forecast in the Bloomberg survey of 15 traders and analysts at a conference in Hyderabad in South India on Aug. 25. That would be the most since a 30 percent surge in 2010, data compiled by Bloomberg show. Gold is set for a 12th year of gains as the European sovereign-debt crisis boosts haven demand amid speculation of further policy easing by central banks, including the U.S. Federal Reserve, which may be considering a third round of so- called quantitative easing, or QE3. Investment holdings have expanded to a record on demand for a hedge against inflation.
“The euro zone has been quiet of late, but that doesn’t mean the problems have disappeared,” said Jeffrey Rhodes, global head of precious metals at INTL FCStone Inc. (INTL), who expects gold to rally to $1,975 by year-end. “The U.S. economy has been sluggish and there is a growing belief that there is going to be QE3 soon. This anticipation is driving the market.” Fed Chairman Ben S. Bernanke said last week there’s “scope for further action” from the U.S. central bank. He is scheduled to speak later this week at the Fed’s annual symposium in Jackson Hole, Wyoming. China’s Premier Wen Jiabao has urged additional steps to support exports and help meet economic targets as evidence mounts the slowdown is deepening.

20120828 0913 Soy Oil & Palm Oil Related News.

SGS CPO export up 3.9% to 768,555 tonnes for the period of 1~20 Aug 2012.
SGS CPO export up 6.6% to 986,829 tonnes for the period of 1~25 Aug 2012.

Pro Farmer: After the Bell Soybean Recap(CME)
Soybeans rose to contract highs this morning, but this was followed by a round of profit-taking. Bears maintained the upper hand into the close and futures ended 2 3/4 to 13 cents lower, with nearbys leading to the downside. Soyoil and soymeal faced spillover pressure. Early support for soybeans stemmed from Pro Farmer's production estimate of 2.6 billion bu., which emphasized the need for supply rationing.

Soybean Complex Market Recap(CME)
November Soybeans finished down 12 3/4 at 1718 3/4, 41 3/4 off the high and 4 3/4 up from the low. January Soybeans closed down 13 at 1711 1/4. This was 5 3/4 up from the low and 41 1/4 off the high. December Soymeal closed down 4.1 at 518.7. This was 3.4 up from the low and 13.2 off the high. December Soybean Oil finished down 0.34 at 56.56, 1.29 off the high and 0.07 up from the low.
November soybeans traded lower into the close after posting a new high for the move overnight. Soybean meal and oil traded lower as well. The soybean market had a positive tone this morning after gapping higher overnight but technical sell pressure and unwinding of calendar spreads took over soon thereafter. Tropical Storm Isaac has entered the Gulf of Mexico and the storm could push as far north as Arkansas, Western Tennessee, Missouri, and Illinois. High winds and heavy rainfall could have a negative impact on maturing row crops but could aid Mississippi water levels in the short term. The 6-10 day forecast calls for a return of above normal temperatures and below normal rainfall for the central US. Spot soybean basis at various Iowa elevators fell today as farmer sales have picked up since last week. This added pressure to calendar spreads. Export inspections for the week ending August 27th were reported at 17.40 million bushels vs. 21.43 the week prior. The current inspection pace for 2011/12 now exceeds the pace needed to reach the USDA estimate. The 5 year average at this time of the crop year is 98%. Outside markets offered limited direction with the US Dollar steady on the day and US stocks slightly higher.

Refiners to pay less for palm in Malaysia's top producing state -paper (Reuters)
Refiners in Malaysia's top oil palm growing state of Sabah will pay millers less for edible oil from next month to preserve margins and better compete with Indonesia, the Business Times reported on Monday, in a move likely to hit planters' revenues.

EDIBLES: Malaysian crude palm oil futures rose to a 6-week high, as traders continued to bet on tight global edible oil supplies with no sign of the drought easing in the soy-producing U.S. Midwest. (Reuters)