Monday, August 29, 2011
20110829 1003 Global Commodities Related News.
Corn (Source: CME)
US corn futures soar on supply worries, fresh export demand and outside market support. Prices pushed past recent technical resistance at $7.50/bushel as a stream of troubling reports of this year's crop continue to emerge. Traders say gains came in part amid anticipation of Pro Farmer crop tour yield projection, released after the close, at 147.9 bushels/acre. "It's confirmation of everybody's suspicions," RJ O'Brien analyst Rich Feltes says. Surprising sales of more than 360k metric tons of corn to unknown destinations added to the bullish tone. CBOT Sept corn up 2.8% to $7.55; Dec corn up 22 1/2c to $7.68. Dec corn up 5.9% for the week.
Wheat (Source: CME)
U.S. wheat futures end higher, following a sharp rally in corn and soybeans. The market was boosted by equities, traders said, and dragged higher as corn and soybeans jumped 2% to 3% in the session. Wheat subdued by comparison, as scattered crop concerns are balanced by ample Black Sea supplies. Still, wheat will continue to climb if corn gains, traders say. Both are used as animal feed. Sep CBOT wheat ends up 5c, or 0.7%, to $7.62 1/4. MGEX wheat, supported by worries about the spring wheat harvest, climbed 2.3%, or 21 1/2c, to $9.56 1/4, and KCBT wheat ended up 2.2%, or 18 1/4c, to $8.66.
Rice (Source: CME)
U.S. rice futures end higher on tightening supplies and outside market support. Market climbed along with corn and soybeans, which surged on supply worries. Traders say U.S. rice crop troubles priced in, but Doane analyst Bill Nelson notes that a USDA report on domestic rice stockpiles shows supplies are smaller than previously thought. CBOT Sep rice up 24c, or 1.4%, to $16.99.
Glencore sees opportunities in volatility as H1 rises
LONDON, Aug 25 (Reuters) - Commodities trader Glencore International Plc warned of volatility ahead in its key markets but saw opportunities in the turbulence as demand remains strong, with resilient prices helping to boost its first-half profit by 50 percent.
A robust outlook and a more modest than expected quarter-on-quarter drop in its closely watched marketing business -- which trades commodities from grains to oil -- comforted investors, who sent the stock up as much as 6 percent.
Orders for LNG-powered ships to surge
LONDON, Aug 25 (Reuters) - Orders for ships powered by liquefied natural gas (LNG) could triple in the next year as stricter emissions targets drive a switch to cleaner-burning fuels, said a risk management firm DNV.
"By 2014 we should have at least 100 ships delivered," according to Lars Petter Blikom, director of LNG business development at DNV.
Pro Farmer Pegs 2011 US Corn Crop At 12.484 Billion Bushels (Source: CME)
Professional Farmers of America forecast the U.S. corn crop at 12.484 billion bushels, well below federal expectations, raising concerns the coming harvest won't replenish already tight inventories. The group, known as Pro Farmer, projected the U.S. soybean harvest above federal expectations, pegging it at 3.083 billion bushels. Pro Farmer estimated an average corn yield of 147.9 bushels an acre, while putting the average soybean yield at 41.8 bushels an acre. Pro Farmer's estimates came at the end of its annual tour through the U.S. corn belt to inspect the crop ahead of the fall harvest. Tour findings are only one part of how Pro Farmer arrives at its forecast. The forecast for the corn crop fell well below a closely watched federal estimate released earlier this month. Participants on the crop tour said a combination of stress from summer heat and dryness coupled with storm damage hampered corn yields.
The U.S. Department of Agriculture earlier this month estimated corn production at 12.914 billion bushels, with an average yield of 153 bushels an acre. Last year, the U.S. corn crop came in at 12.447 billion bushels with an average yield of 152.8 bushels an acre. The average yield for the U.S. crop hasn't been below 150 bushels an acre since 2006. Corn for December delivery closed up 23 1/2 cents, or 3.2%, at $7.67 a bushel at the Chicago Board of Trade. Prices climbed 5.9% this week as reports from the tour filtered back. The final Pro Farmer estimates were released after the market closed. As expected, the tour found the eastern U.S. corn belt on track for lower yields from a year ago. More surprising was the western corn belt where the tour found yields weren't strong enough to make up for the expected losses in the east, said Terry Johnston, a consultant for the Pro Farmer crop tour.
Tim Gregerson, a farmer from Nebraska who traveled on the tour's western leg, said the tour reaffirmed concerns that corn supplies will remain tight in 2012. Going into the harvest, the USDA estimates corn inventories at a 15-year low, while demand for the grain remains strong. As for soybeans, the crop has "good potential with no disease or insect problems, but will need some moisture in the next few weeks for the crop to finish the growing season well," said Chip Flory, editor of the Pro Farmer Newsletter. Federal forecasters earlier this month estimated the U.S. soybean crop at 3.056 billion bushels, with an average yield of 41.4 bushels an acre.
China Raises Capital Requirements For Seed Producers -Ministry (Source: CME)
China's Ministry of Agriculture published new measures, governing the nation's fragmented seed market, requiring increased registered capital and assets. The new measures aim to increase competitiveness and innovation in the domestic seed sector and to encourage mergers and acquisitions, the ministry said in a statement on its website. Effective as of September 25 this year, hybrid rice and hybrid corn seed producers must have minimum registered capital of CNY30 million, compared with CNY5 million now, it said. Companies producing other crop seeds must have minimum registered capital of CNY5 million. The measures don't apply to genetically modified seeds. Seed importers and exporters must have minimum registered capital of CNY30 million, up from CNY10 million now, the statement said.
China has more than 8,700 licensed seed companies, two-thirds of them small- and medium-sized firms with registered capital between CNY1-5 million. More than 90% of China's seed firms don't have research and development capacity, it said.
Canadian Wheat Board Facing Uncertain Future, Chairman Says (Source: CME)
The current crop year could be the last for the Canadian Wheat Board, if changes proposed by the federal government are put in place to end its marketing powers in time for the 2012-13 crop year, Chairman Allen Oberg said. "Whatever the future holds, one thing is certain, if the single desk is eliminated, the landscape of Prairie wheat marketing will change drastically," Oberg said at a news conference. "The CWB will end. If a new organization is created, it will bear no resemblance to the CWB that exists today." Canada's majority Conservative government intends to introduce legislation this fall to end the CWB's current single desk marketing powers for western Canadian wheat and barley. The government also intends to change the CWB Act in order to remove the need for a farmer plebiscite.
The CWB recently conducted its own survey of farmers and will release the results Sept. 9. Oberg said the CWB's farmer-controlled board of directors is calling on the federal government to respect the results and abide by the wishes of Prairie farmers. "We as Prairie farmers are facing an uncertain future," Oberg said. "The government intends to take our marketing power away. "We have not been consulted, nor has there been any government analysis of the impact on farm families and the grain industry from dismantling an economic model that adds an extra half billion dollars a year for Prairie farmers," he said. "The future is far from clear at this point, but whatever happens we must all work to ensure that farmers' interests are not put last."
Ukraine Mulls Scrapping New Grain Duty After July Exports Plummet (Source: CME)
The Ukrainian agriculture ministry has drafted amendments to the current legislation aimed at abolishing the present grain export taxes, deputy head of the ministry's agricultural markets department said. Anatoly Razgon said: "The government is not satisfied with the current pace of grain export," the ministry's press service reported. As a result of the imposition of export duties, Ukraine's grain export fell in July to 300,000 metric tons from 1.5 million tons in June. Ukrainian exporters cannot compete with their Russian counterparts, whose grain is at least $30 per ton cheaper, Razgon said in Kiev. "We have submitted our proposals to the Economy Ministry. I think the draft will be approved shortly," he said. The government imposed export duties on grain on July 1 as a result of last year's drought. Wheat export duty is 9% of the contract price but not less than EUR17 per metric ton. The corn export duty is 12% but not less than EUR20 per ton. The barley export duty is 14% but not less than EUR23 per ton.
Wall Street Goes Down On Farm For Real Dirt (Source: CME)
Jake Rothman, an analyst at Boston hedge-fund firm Mayo Capital Partners, slogged through a muddy cornfield near Remington, Ind, looking for clues about the size of this year's U.S. crop. Wearing an oversized raincoat borrowed from a farmer, the 35-year-old Mr. Rothman worked his way down one row until he was hidden in the tightly packed cornstalks. "There's more uncertainty this year," he said while riding in a van to the next field. The coming harvest will affect grain processor Archer-Daniels-Midland Co., fertilizer maker CF Industries Holdings Inc. and other agriculture companies followed by Mr. Rothman. Across the Midwest, dozens of analysts and investors are tramping corn and soybean fields this week in an annual ritual aimed at giving them an edge on their Wall Street rivals.
The four-day, seven-state marathon costs $80, not including travel costs, and is organized by Pro Farmer, an agriculture advisory firm. Participants walk dozens of fields and get details from farmers about the number of bushels likely to be harvested from each acre. Instead of relying on the spreadsheets left behind on their office computers, analysts and investors on the "corn tour" become "scouts" who disappear into each field with a 30-foot-long yellow rope. They run the rope along a row of stalks and count the number of ears. Along the 30-foot section, the scouts pull off the fifth, eighth and 11th ears -- and then rip off the husks to count the number of kernels along the circumference of each ear. The scouts put their arms up in front of their faces to protect themselves from sharply edged corn leaves.
Pro Farmer plans to release a forecast for the average U.S. corn yield, or the projected harvest by acre. The annual measurement often moves commodity and stock prices, and it will be watched closely as traders debate by how much the U.S. Department of Agriculture will reduce its forecast next month. On Thursday, corn for delivery in September rose 0.1% to a two-month high of $7.3225 a bushel on the Chicago Board of Trade. Corn futures are up 16% so far this year. The crop tour gives analysts and investors some down-to-earth numbers, gut instinct and dirty hands to go with the government's official data. Expectations are for a large corn crop, but no longer the record haul predicted earlier this year. Exact figures won't be known until farm combines have harvested tens of millions of acres, which will take months. The crop's size will ripple through the economy and financial markets.
Even though the U.S. continues to produce crops that are massive by historical standards, farmers can't keep up with world demand. U.S. forecasters predict that the nation's crop will fall short of demand by 246 million bushels in the next year. That will shrink inventories used to help prevent supply shortages. Also worrisome this year is the vast difference in the quality of corn growing in key corn-producing states. Because of all the unanswered questions, demand for the crop tour was so high this year that organizers turned people away for the first time in its 19-year history. Among those who got in were employees of Credit Suisse Group AG, mutual-fund manager OppenheimerFunds Inc. and private-equity firm Bain Capital Partners LLC. Securities firm Morgan Stanley brought along its own bus, with 17 people on board. Crop-tour participants without a seat on the bus joked that Morgan Stanley was on the "Gucci tour."
Morgan Stanley noted that it was a past participant in the tour and that it organized a bus in 2010. Hussein Allidina, head of commodities research at Morgan Stanley, says traveling to the farm belt can unlock important details like whether farmers will abandon rotating crops in favor of trying to plant as much corn as possible. "The key thing is meeting the farmers and appreciating the psychology," he says. Mr. Allidina had gone on the tour in the past but didn't attend this year.
Rice May Rally 22% on Thai Buying (Source: Bloomberg)
Rice may rally 22 percent by yearend as Thailand, the world’s largest exporter, buys the grain from farmers at above-market rates, pushing up costs for importers and fanning global inflation even as economic growth slows. The price of 100 percent grade-B Thai rice, the regional benchmark, may rally to $750 per metric ton by Dec. 31, according to the median estimate in a Bloomberg News survey of seven exporters, traders and millers conducted last week. That target is $50 higher than the median estimate in a separate Bloomberg survey undertaken in the first half of this month. The surge may complicate matters for central bankers and policy makers around Asia who are already struggling to cool rising prices. Rice was the only grain separating the world from a food crisis, Abdolreza Abbassian, senior economist at the United Nations Food & Agriculture Organization, or FAO, said in February when worldwide food costs rallied to a record.
Sugar up, crop concerns in China, Brazil support
LONDON, Aug 26 (Reuters) - Soft commodities rose , boosted by the weaker dollar, as agricultural markets continued to show resilience in the face of the global economic slowdown.
Raw sugar futures were higher in early trading, boosted by further reductions to top producer Brazil's crop prospects and concerns of dry weather reducing China's output.
Drought continues in China's top sugar region
BEIJING, Aug 26 (Reuters) - Showers earlier this week failed to end a lingering drought in China's top sugar region of Guangxi, which produces about 60 percent of the country's total sugar output, local agriculture officials said on Friday.
"We have some rains, but only in parts of the region. Some areas do not have enough and canes have already withered," an official with the Guangxi agriculture bureau told Reuters.
Asia Cocoa-Bloom period in Sulawesi; powder prices up
SINGAPORE, Aug 26 (Reuters) - Cocoa trees have started to bloom ahead of the mid-crop in Indonesia's main growing island of Sulawesi, but dry weather may limit overall production this year, dealers said on Friday.
Output in the world's third-largest producer after Ivory Coast and Ghana could fall about 33 percent to 400,000 tonnes in 2011 due to extreme wet weather earlier this year, which caused the spread of a deadly fungal disease "Flowering has started but it's extremely hot here. I don't think the crop will yield much because the weather is not supportive," said a dealer in Makassar, the provincial capital of South Sulawesi.
Tight coffee supply to embolden Brazil producers
BRASILIA, Aug 26 (Reuters) - Coffee producers in Brazil, the world's top grower, will have the upper hand in trading their stocks in the long inter-harvest from October to May with a smaller 'off year' crop to sell and growing demand.
Global demand for the popular caffeine drink has continued to grow despite the economic storms of the past few years while supply growth lagged, as Brazil's trees take time to respond to improved use of inputs and husbandry.
Brazil sugar output down 11 pct so far on year
BRASILIA, Aug 25 (Reuters) - Sugar and ethanol output remained at a slower pace in the first half of August, as expected, cane industry association Unica said on Thursday, as analysts' forecasts for the crop only grew gloomier.
Sugar production in Brazil's center-south reached 17.4 million tonnes from the start of the season to Aug. 16, down 11 percent from the same date a year earlier, cane industry association Unica said on Thursday.
Orders for LNG-powered ships to surge
LONDON, Aug 25 (Reuters) - Orders for ships powered by liquefied natural gas (LNG) could triple in the next year as stricter emissions targets drive a switch to cleaner-burning fuels, said a risk management firm DNV.
"By 2014 we should have at least 100 ships delivered," according to Lars Petter Blikom, director of LNG business development at DNV.
Oil Trades Near Three-Day High; Refineries Normal as Irene Heads to Canada (Source: Bloomberg)
Oil traded near a three-day high in New York as investors speculated that growth will recover in the U.S., spurring demand in the biggest crude consumer. Refineries resumed output as Tropical Storm Irene headed toward Canada. Futures fluctuated after climbing as much as 0.4 percent. Federal Reserve Chairman Ben S. Bernanke said on Aug. 26 that U.S. growth is safe in the long run and the Fed still can aid the recovery. Oil refiners along the East Coast were operating plants at or near normal levels after Irene weakened from a hurricane. Rebels in Libya claimed full control of the country’s oil fields.
“Bernanke is suggesting that there are some good, some negative economic indicators and there is a chance of a double- dip, but overall he feels that the base has been laid for long- term growth,” said Jonathan Barratt, a managing director of Commodity Broking Services Pty in Sydney, who predicts crude in New York will average $100 a barrel this year. “You’ll find over the next three to six months there’ll be a marked improvement in terms of Libyan production.”
Oil slips, Bernanke's speech eyed
LONDON, Aug 26 (Reuters) - Oil prices inched down on Friday as investors looked ahead to a speech by the U.S. Federal Reserve chairman on the health of the world's largest economy and top oil consumer.
"The key question is whether Bernanke will announce a further round of quantitative easing of US monetary policy, as he did last year," Commerzbank analysts said.
Thai govt says to temporarily remove levy on some fuel
BANGKOK, Aug 26 (Reuters) - Thailand's Energy Ministry will temporarily remove a levy on certain fuel to bring down retail prices, the energy minister said on Friday.
The removal will cut the retail price of 91-octane by 7.17 baht per litre, 95-octane petrol by 8.02 baht and diesel by 3 baht from Saturday, Pichai Naripthaphan told reporters after a meeting of the National Energy Policy Council (NEPC).
India's July refinery output rises 3.9 pct y/y-govt
NEW DELHI, Aug 26 (Reuters) - Indian refiners processed 3.9 percent more crude in July from a year ago, the eighth consecutive monthly rise, with the pace of growth slowing slightly from June due to maintenance work at some refineries.
Domestic refiners processed 3.423 million barrels per day (bpd) of crude oil in July, while combined crude throughput of private refineries was down four percent, government data showed on Friday.
Iraq Q4 oil product imports near 1 mln tonnes
NEW YORK/LONDON, Aug 25 (Reuters) - Iraq, a major buyer of oil products, is set to import around 950,000 tonnes of gasoline and gas oil in the fourth quarter, the country's deputy oil minister told Reuters on Thursday.
Speaking by telephone from Iraq, Dr. Ahmed al-Shamma said rapidly growing demand meant the country would need to import 681,000 tonnes of gasoline and 270,000 tonnes of gas oil in the last three months of 2011.
Glencore sees opportunities in volatility as H1 rises
LONDON, Aug 25 (Reuters) - Commodities trader Glencore International Plc warned of volatility ahead in its key markets but saw opportunities in the turbulence as demand remains strong, with resilient prices helping to boost its first-half profit by 50 percent.
A robust outlook and a more modest than expected quarter-on-quarter drop in its closely watched marketing business -- which trades commodities from grains to oil -- comforted investors, who sent the stock up as much as 6 percent.
Glencore CEO eyes iron ore opportunities
LONDON, Aug 25 (Reuters) - Commodities trader Glencore aims to grow its presence in iron ore through additional marketing deals and could consider acquisitions, its Chief Executive Ivan Glasenberg told reporters on Thursday.
Glencore's iron ore marketing business has soared since it was launched in 2008 and it has carved out a growing share of the market for the steelmaking ingredient.
Indonesian Timah's refined H1 tin output down 5 pct
JAKARTA, Aug 25 (Reuters) - Refined tin production at Indonesia's Timah , the world's largest integrated tin miner, fell 5 percent in the first half of this year compared with a year ago, the state-owned company said on Thursday.
First-half refined tin production was 18,455 tonnes versus 19,501 tonnes last year, the company said in a statement.
Libya's uranium, chemical stocks secure - U.S.
WASHINGTON, Aug 25 (Reuters) - The U.S. State Department said on Thursday that it believes Libya's stockpiles of low-enriched uranium and mustard gas, built up by deposed leader Muammar Gaddafi, are secure.
Department spokeswoman Victoria Nuland said the United States was monitoring sites where the stockpiles are held through its "national technical means" -- a euphemism for spy satellites and other intelligence assets -- and was confident of their security.
Japan July rolled copper output down 4.1 pct yr/yr
TOKYO, Aug 26 (Reuters) - Japan's output of rolled copper product dropped 4.1 percent in July from a year earlier, its second consecutive year-on-year fall, due to sluggish demand from auto and chip makers, an industry association said on Friday.
The preliminary data from the Japan Copper and Brass Association showed that rolled copper output totaled 71,978 tonnes in July on a seasonally adjusted basis. That marked an increase of 2.8 percent from June.
METALS-LME copper slips, Bernanke's speech eyed
SHANGHAI, Aug 26 (Reuters) - LME copper fell on Friday, after surging to its highest in almost three weeks in the previous session, as investors remained cautious ahead of a speech by Federal Reserve Chairman later in the day.
The base metals market is expected to be volatile during the day with many investors betting against the Fed unveiling new quantitative easing (QE) measures, while some looked forward to it offering positive signals about the faltering U.S. economy.
PRECIOUS-Gold edges lower before Bernanke speech
SINGAPORE, Aug 26 (Reuters) - Spot gold lost 0.4 percent on Friday, on course for its first weekly drop after seven straight weeks of gains, as investors awaited a speech by U.S. Federal Reserve Chairman Ben Bernanke later in the day.
All eyes are on Bernanke's speech in Jackson Hole scheduled for 1400 GMT, with markets eager to hear what the Fed's plan is to help a struggling U.S. economy, although the growing consensus is that the Fed's options to stimulate the economy are limited.
Gold Reverses Gain to Decline by 0.8%, Falling for the First Day in Three (Source: Bloomberg)
Gold for immediate delivery fell as much as 0.8 percent to $1,814.20 an ounce, and last traded at $1,816.55 by 8:11 a.m. Singapore time.
Gold Advances on Demand for Haven as Bernanke Offers No Fed Stimulus Plan (Source: Bloomberg)
Gold climbed for a third day after Federal Reserve Chairman Ben S. Bernanke refrained from offering more stimulus to shore up the economy, boosting the appeal of haven investments. Immediate-delivery gold advanced as much as 0.6 percent to $1,839.15 an ounce before trading at $1,834.74 at 6:20 a.m. Singapore time. The metal, which touched a record $1,913.50 on Aug. 23, slumped as much as 11 percent from its all-time high, as equities rebounded on optimism the Fed would act to bolster the economy at an annual forum last week. December delivery bullion in New York rose as much as 2.5 percent to $1,841.50. “The underlying reason for gold’s surge -- diminishing faith in government balance sheets -- remains intact,” JPMorgan Chase & Co. analysts led by chief market strategist Jan Loeys, wrote in a report dated Aug. 26.
Baltic index falls, rally loses steam
LONDON, Aug 25 (Reuters) - The Baltic Exchange's main sea freight index, which tracks rates to ship dry commodities, fell on Thursday for the first time in over two weeks on Thursday as slower cargo bookings and rising fleet growth dented earnings.
The overall index fell 1.25 percent or 20 points to 1,582 points, after rising for 11 straight sessions previously and hitting a near-seven-month high this week. The index, which gauges the cost of shipping commodities including iron ore, coal and grain, had risen over 25 percent since first moving higher on Aug. 10.
20110829 1001 Soy Oil & Palm Oil Related News.
Soybeans (Source: CME)
US soy futures jump sharply on growing concerns about the crop, which continues to get less rain than it needs. Theme is "higher and drier," says US Commodities President Don Roose, who says lack of rain across a wide swath of the Midwest is stressing the crop and driving prices higher. Technical buying accelerated soybeans' climb, and strength in equities also supported prices. Sep soybeans climb 2.1% to $14.16 3/4 a bushel.
Soybean Meal/Oil (Source: CME)
Sep soyoil ends up 1.8% to 56.60c/lb, while Sep soymeal ends up 2.2% to $376 per short ton.
Palm oil futures hit 2-wk lows, key speech eyed
KUALA LUMPUR, Aug 26 (Reuters) - Malaysian palm oil futures hit over two-week lows, tracking a weaker overseas soy complex and crude oil amid grim global economic news as traders awaited a key speech by Federal Reserve Chairman Ben Bernanke.
"Investors tend to be cautious ahead of Ben Bernanke's speech, but the debt crisis in the U.S. will not end overnight," said a trader in Kuala Lumpur.
Minimal August rains to stress U.S. soybeans
CHICAGO, Aug 25 (Reuters) - Minimal rainfall for the rest of August in the U.S. Midwest will add stress to pod-setting soybeans and filling corn, an agricultural meteorologist said Thursday.
"Overall there won't be much rain for the next 10 days but no exceptional heat," said John Dee, meteorologist for Global Weather Monitoring.
Global slowdown may not hurt Malaysian commodity exports
PUTRAJAYA, Malaysia Aug 25 (Reuters) - Malaysian commodities such as palm oil, tin and rubber play such a central role in the global economy that their prices are likely to hold up even in a global slowdown, the Malaysian commodities minister said on Thursday.
Chinese imports of palm oil are set to rise next month as buyers stock up, Bernard Dompok said.
Friday, August 26, 2011
20110826 1804 FCPO EOD Daily Chart Study.
Bollinger band reading : correction range bound downside biased.
MACD Histrogram : weakenning, buyer and seller battling.
Support : 2970, 2930, 2900, 2850 level.
Resistance : 3020, 3050, 3070, 3100 level.
Comment :
FCPO closed recorded small loss with lower volume changed hand while overnight soy oil closed little lower and currently trading weaker while crude oil trading lower.
Changes in Indonesia crude palm oil export tax structure resulted FCPO price to weight lower as cost of importing reduced.
Daily chart formed a down doji bar candle with long lower shadow closed between middle and lower Bollinger band level after market opened 1 tick lower, edge up few ticks and fall lower tested below support level and recovered part of the intraday losses to closed off the low of the day.
Chart study suggesting a correction range bound 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.
20110826 1745 FKLI EOD Daily Chart Study.
Bollinger band reading : downside biased.
MACD Histrogram : falling lower, seller holding on.
Support : 1425, 1405, 1395, 1385 level.
Resistance : 1445, 1458, 1470, 1485 level.
Comment :
FKLI closed recorded huge loses with increasing volume participation doing 3.5 points discount compare to cash market that also closed substantially lower. Overnight U.S. market closed lower and Asia markets ended mixed while European markets currently trading mostly weaker.
Overnight unexpected higher jobless claim in the U.S. lead U.S. market to trade lower while today regional market traded in uncertain sentiment as markets awaits statement from U.S. Federal Reserve Ben Benanke announcement on if there is any further stimulus measure.
Back home, continue selling pressure on heavy weight counters resulted KLCI and FKLI to trade severely lower ahead of long holidays.
Daily chart formed the third wide range down bar candle closed positioned near to lower Bollinger band after market opened lower and free fall all the way before rebounded slightly but still closed near the low of the day.
Chart reading turned to suggesting a downside biased market development testing lower support 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.
20110826 1721 Regional Markets EOD Daily Chart Study.
DJIA chart reading : correction range bound downside biased.
Hang Seng chart reading : correction range bound downside biased.
KLCI chart reading : downside biased.
20110826 1524 Global Market & Commodities Related News.
Asian shares edge up, dollar firm
SINGAPORE, Aug 26 (Reuters) - Asian shares edged up marginally as investors waited for a speech by Federal Reserve Chairman Ben Bernanke later in the day, while nervousness about the U.S. economic outlook sent the dollar higher.
"The market is lacking upside potential as some doubt there will be another round of quantitative easing from the Fed," said Lee Suk-won, a market strategist at E-Trade Securities.
Global slowdown may not hurt Malaysian commodity exports
PUTRAJAYA, Malaysia Aug 25 (Reuters) - Malaysian commodities such as palm oil, tin and rubber play such a central role in the global economy that their prices are likely to hold up even in a global slowdown, the Malaysian commodities minister said on Thursday.
Chinese imports of palm oil are set to rise next month as buyers stock up, Bernard Dompok said.
Wheat dips from 2-month top, corn down ahead of Bernanke speech
SINGAPORE, Aug 26 (Reuters) - U.S. wheat futures fell around half a percent from a two-month top in the last session amid an improved global crop output, while corn and soybeans eased in cautious trade ahead of a key speech by Federal Reserve Chairman Ben Bernanke.
"For wheat, there are a number influences in the market right now which will limit any rally," said Abah Ofon, an analyst with Standard Chartered Bank in Singapore.
Iowa corn limited by storms; late planting hurts Minnesota
AUSTIN, Minn., Aug 25 (Reuters) - Corn yield forecasts in Iowa dropped nearly five percent below average after hail and wind storms in the southwest devastated crop potential in that area of the top corn and soybean producing state, according to the findings of an annual crop tour released on Thursday.
In Minnesota, which was surveyed by crop scouts on Thursday, late planting limited production potential and much of the crop could be damaged by an early frost, dropping yield estimates below 2010 and the three-year average.
Brazil sugar output down 11 pct so far on year
BRASILIA, Aug 25 (Reuters) - Sugar and ethanol output remained at a slower pace in the first half of August, as expected, cane industry association Unica said on Thursday, as analysts' forecasts for the crop only grew gloomier.
Sugar production in Brazil's center-south reached 17.4 million tonnes from the start of the season to Aug. 16, down 11 percent from the same date a year earlier, cane industry association Unica said on Thursday.
Argentine farmers to sow more 11/12 corn--exchange
BUENOS AIRES, Aug 25 (Reuters) - Argentina's 2011/12 corn area is estimated at 3.5 million hectares, up 9 percent from the previous crop season, the Buenos Aires Grains Exchange said on Thursday in its first plantings forecast.
The South American country is the world's No. 2 corn exporter after the United States and farmers produced a bumper crop of 21 million tonnes in the current 2010/11 crop year. Farmers have virtually finished the harvest.
Drought, rain curb malting barley crop in west EU
PARIS, Aug 25 (Reuters) - The amount of European barley fit for making malt, an ingredient in beer, will be curbed by weather-affected harvests in France and Germany this year, but a more promising spring crop in Britain may help limit losses.
A spring drought and summer rain hurt French and German barley plants, notably spring-sown varieties that produce most of the crop used for malt, traders and analysts said.
Czech harvest picks up speed as weather improves
PRAGUE, Aug 25 (Reuters) - Czech grain harvest accelerated last week thanks to improving weather following a spell of rain, the Agrarian Chamber said on Thursday.
It said total grain harvest reached 5.96 million tonnes as of Aug 23, or 79 percent of the total area.
Minimal August rains to stress U.S. soybeans
CHICAGO, Aug 25 (Reuters) - Minimal rainfall for the rest of August in the U.S. Midwest will add stress to pod-setting soybeans and filling corn, an agricultural meteorologist said
Thursday.
"Overall there won't be much rain for the next 10 days but no exceptional heat," said John Dee, meteorologist for Global Weather Monitoring.
Hot, dry weather clips Illinois corn yield 6.5 pct
CORALVILLE, Iowa, Aug 24 (Reuters) - Illinois corn yields fell more than 6 percent from a year ago as excessive heat and prolonged dry weather stressed crops throughout the summer and limited production potential in the second largest U.S. corn state, scouts on an annual U.S. crop tour said Wednesday.
The stressful weather also undermined the soybean crop, which scouts found to have nearly 9 percent fewer pods than in 2010, suggesting yields would decline in the country's No. 2 soybean producing state, they said.
Tight coffee supply to embolden Brazil producers
BRASILIA, Aug 26 (Reuters) - Coffee producers in Brazil, the world's top grower, will have the upper hand in trading their stocks in the long inter-harvest from October to May with a smaller 'off year' crop to sell and growing demand.
Global demand for the popular caffeine drink has continued to grow despite the economic storms of the past few years while supply growth lagged, as Brazil's trees take time to respond to improved use of inputs and husbandry.
Optimum Coal eyes more consolidation
JOHANNESBURG, Aug 25 (Reuters) - Optimum Coal , South Africa's sixth-largest coal producer, sees "huge opportunities" for consolidation in the country's coal sector and is looking for assets to buy, its chief executive said on Thursday.
Optimum recently bought prospecting rights from other players to boost its portfolio and replace mines when their life-span comes to an end. Chief executive Mike Teke said the company would continue to be "acquisitive".
Brent steady above $110, investors await Bernanke's speech
SINGAPORE, Aug 26 (Reuters) - Brent crude was steady, while U.S. futures edged down as investors worried the Federal Reserve chief may not offer measures strong enough to help the U.S. economy, the world's top oil consumer.
"We saw a little bit more bullish data this week on the crude side which gave some support," said Jeremy Friesen, a commodity strategist at Societe Generale in Hong Kong, referring to the EIA data that showed a drop in U.S. crude stockpiles.
LME copper slips, Bernanke's speech eyed
SHANGHAI, Aug 26 (Reuters) - LME copper fell, after surging to its highest in almost three weeks in the previous session, as investors remained cautious ahead of a speech by Federal Reserve Chairman later in the day.
"The tempting conclusion is to suggest a sell-off would ensue (if Bernanke does not unveil extra stimulus) particularly from the equity side," said MF Global senior commodity analyst Edward Meir on copper in a note on Thursday.
Vietnam to test run 1st alumina plant in Sept -paper
HANOI, Aug 26 (Reuters) - Vietnam will test-run its first alumina refinery, being built by a Chinese firm, next month and production is set to start in late 2011, well behind schedule, a state-run newspaper reported on Friday.
The $460 million Tan Rai alumina plant, invested in by Vinacomin, Vietnam's top coal mining group, would run at 20 percent of its designed 600,000-tonne output capacity when it begins production, the official Nhan Dan (People) newspaper said.
Japan July aluminium shipments down 4.8 pct yr/yr
TOKYO, Aug 26 (Reuters) - Japanese shipments of aluminium products fell 4.8 percent in July from a year earlier to 170,916 tonnes, industry data showed on Friday, falling year-on-year for the second month in a row as the impact from the March earthquake was still felt.
The data provided by the Japan Aluminium Association showed that July shipments fell 4.2 percent from 178,452 tonnes in June, falling month-on-month for the first time in three months.
Gold edges lower before Bernanke speech
SINGAPORE, Aug 26 (Reuters) - Spot gold lost 0.4 percent, on course for its first weekly drop after seven straight weeks of gains, as investors awaited a speech by U.S. Federal Reserve Chairman Ben Bernanke later in the day.
"There is not a clear conviction on price direction as everyone is waiting for Jackson Hole," said Chen Xin Yi, an analyst at Barclays Capital, adding that some investors were exiting the market ahead of the central bankers' meeting and upcoming long weekend in London.
20110826 1458 Global Economic Related News.
Hong Kong’s exports grew by less than economists estimated in Jul as a drop in sales to the U.S. countered higher shipments to Asian markets. Overseas sales increased 9.3% yoy to HK$286bn (US$37bn) in Jul (+9.2% in Jun), the government said. Economists expected a reading of 14.2%. (Bloomberg)
South Korean consumer confidence fell to a five-month low as stock market turmoil dented the outlook and accelerating inflation hurt purchasing power. The sentiment index fell to 99 in Aug from 102 in Jul, the Bank of Korea said. A reading below 100 indicates people are more pessimistic than the average between 1Q99 and 2Q08. (Bloomberg)
Thailand’s export growth accelerated in July to the fastest pace in 13 months, boosted by demand for agricultural products and a recovery in auto shipments as supply disruption caused by the Japan earthquake eased. Overseas sales increased 38.3% from a year earlier, the Ministry of Commerce said yesterday. That compares with a 16.8% rise in June reported earlier. The Bank of Thailand predicts the impact of the 11 March temblor will ease from this quarter as Japan, the nation’s largest trading partner, recovers from the disaster. (Bloomberg)
Philippines: Budget deficit widens as revenue growth eases
The Philippines reported a wider budget deficit in July as revenue climbed at the slowest pace this year. The shortfall was 26.5bn pesos (USD622m), compared with a 7.69bn-peso deficit reported earlier for June, according to an e-mailed statement from the government today. Revenue gained 3.9% from a year earlier, less than the 8.7% pace reported earlier for June, while spending fell 1.6%, the report showed. Philippine President Benigno Aquino has targeted tax evaders to boost revenue and fund spending on roads and airports, part of efforts to spur investment and growth. (Bloomberg)
Euro: IMF may approve next Greek disbursement at end of September
The International Monetary Fund may authorize the next disbursement for Greece under a joint bailout with Europe at the end of next month, a spokesman for the fund said. A review of policies attached to the current EUR110bn (USD159bn) bailout with the European Union is currently taking place in Athens and should conclude around 5 Sept., spokesman David Hawley said. The Greek government has not made any request for another loan and current talks to get the private sector involved in helping reduce the Greek debt load are not part of the current review, he added. (Bloomberg)
US: Jobless claims rise, propelled by Verizon dispute
Claims for U.S. unemployment benefits unexpectedly rose last week, pushed up for a second time by a labor dispute at Verizon Communications Inc. Jobless claims climbed by 5,000 to 417,000 in the week ended 20 Aug, Labor Department figures showed yesterday. At least 8,500 applications were filed by workers at Verizon last week, compared with 12,500 the prior week, the agency said. The report signals that excluding the communications dispute, companies are slowing the pace of firings, which may ease concern that consumers will cut back on spending. At the same time, an unemployment rate at 9.1% is a reminder that a sustained labor-market rebound has yet to develop two years into the economic recovery. (Bloomberg)
US: Bernanke signaling no QE supported by data including prices
Federal Reserve Chairman Ben S. Bernanke tomorrow may disappoint stock investors betting on a commitment to step up stimulus. He has little choice, given rising consumer prices and a U.S. economy that is still growing. Gasoline costs are 33% higher; consumer inflation is twice as fast and inflation expectations are above levels since Bernanke signaled more easing a year ago at the annual Fed symposium in Jackson Hole, Wyoming. (Bloomberg)
US: Consumer comfort index stabilizes close to record low
Consumer confidence stabilized last week at a level that’s within striking distance of an all-time low as Americans remained pessimistic about the economy. The Bloomberg Consumer Comfort Index was minus 47 in the week to 21 Aug compared with minus 48.3 reading the previous period that halted a three-week slide. The gain was within the survey’s 3-point margin of error. The figure is close to minus 54 in January 2009, which matched the worst reading in the history of the series dating back to 1985. Confidence among those earning more than USD100,000 a year fell in the past month to the lowest level since 2009, possibly due to stock market weakness and mounting concern the recovery may falter. (Bloomberg)
Thailand: Export growth accelerates as Japan disruption eases
Thailand’s export growth accelerated in July to the fastest pace in 13 months, boosted by demand for agricultural products and a recovery in auto shipments as supply disruption caused by the Japan earthquake eased. Overseas sales increased 38.3% from a year earlier, the Ministry of Commerce said yesterday. That compares with a 16.8% rise in June reported earlier. The Bank of Thailand predicts the impact of the 11 March temblor will ease from this quarter as Japan, the nation’s largest trading partner, recovers from the disaster. (Bloomberg)
Philippines: Budget deficit widens as revenue growth eases
The Philippines reported a wider budget deficit in July as revenue climbed at the slowest pace this year. The shortfall was 26.5bn pesos (USD622m), compared with a 7.69bn-peso deficit reported earlier for June, according to an e-mailed statement from the government today. Revenue gained 3.9% from a year earlier, less than the 8.7% pace reported earlier for June, while spending fell 1.6%, the report showed. Philippine President Benigno Aquino has targeted tax evaders to boost revenue and fund spending on roads and airports, part of efforts to spur investment and growth. (Bloomberg)
Euro: IMF may approve next Greek disbursement at end of September
The International Monetary Fund may authorize the next disbursement for Greece under a joint bailout with Europe at the end of next month, a spokesman for the fund said. A review of policies attached to the current EUR110bn (USD159bn) bailout with the European Union is currently taking place in Athens and should conclude around 5 Sept., spokesman David Hawley said. The Greek government has not made any request for another loan and current talks to get the private sector involved in helping reduce the Greek debt load are not part of the current review, he added. (Bloomberg)
US: Jobless claims rise, propelled by Verizon dispute
Claims for U.S. unemployment benefits unexpectedly rose last week, pushed up for a second time by a labor dispute at Verizon Communications Inc. Jobless claims climbed by 5,000 to 417,000 in the week ended 20 Aug, Labor Department figures showed yesterday. At least 8,500 applications were filed by workers at Verizon last week, compared with 12,500 the prior week, the agency said. The report signals that excluding the communications dispute, companies are slowing the pace of firings, which may ease concern that consumers will cut back on spending. At the same time, an unemployment rate at 9.1% is a reminder that a sustained labor-market rebound has yet to develop two years into the economic recovery. (Bloomberg)
US: Bernanke signaling no QE supported by data including prices
Federal Reserve Chairman Ben S. Bernanke tomorrow may disappoint stock investors betting on a commitment to step up stimulus. He has little choice, given rising consumer prices and a U.S. economy that is still growing. Gasoline costs are 33% higher; consumer inflation is twice as fast and inflation expectations are above levels since Bernanke signaled more easing a year ago at the annual Fed symposium in Jackson Hole, Wyoming. (Bloomberg)
US: Consumer comfort index stabilizes close to record low
Consumer confidence stabilized last week at a level that’s within striking distance of an all-time low as Americans remained pessimistic about the economy. The Bloomberg Consumer Comfort Index was minus 47 in the week to 21 Aug compared with minus 48.3 reading the previous period that halted a three-week slide. The gain was within the survey’s 3-point margin of error. The figure is close to minus 54 in January 2009, which matched the worst reading in the history of the series dating back to 1985. Confidence among those earning more than USD100,000 a year fell in the past month to the lowest level since 2009, possibly due to stock market weakness and mounting concern the recovery may falter. (Bloomberg)
20110826 1456 Malaysia Corporate Related News.
New managing director for MAS found?
The search for Malaysia Airlines' (MAS) new chief appears to have ended. It is learned that the executive committee decided on the new managing director (MD) after a meeting yesterday. Ahmad Jauhari Yahya, the former CEO of power producer Malakoff Bhd, has been offered the job to lead the embattled national airline. However, it is unclear if he will take on the job since he has other interests to pursue, said sources familiar with the situation. Ahmad Jauhari is no stranger to the airline industry since he also sits on the board of Malaysia Airports Holdings Bhd. (BT)
Megasteel disappointed with Miti decision
Megasteel SB says it is disappointed that the Ministry of International Trade and Industry (Miti) has decided against implementing the 35% safeguard duty on the import of hot-rolled-coil (HRC) the steel giant had petitioned for in June. “Megasteel expresses its disappointment over the Government’s announcement not to implement safeguard measures in the face of rising imports, which have severely affected the company’s operations and performance as submitted to the authorities,” the company said in a press statement released yesterday. (StarBiz)
Hunza raises the bar with Gurney Paragon
Hunza Properties (HBP) is set to raise the bar for retail and food scene in Penang with the staggered opening of Gurney Paragon from December this year. Executive chairman Datuk Khor Teng Tong said in its bid to bring in fresh names in retail and dining to the island, the company had lined up a mixture of tenants who have not operated here before. "Besides signing up with TGV Cinemas, Pacific Coffee and Italiennes Restaurant, we are also in talks with luxury goods retailer Valiram Group about bringing several of its brands to our shopping mall," He said the shopping mall, boasting a net lettable area of 700,000 sq ft, will form the second phase, which fronts both Gurney Drive and Jalan Kelawai. It is expected to be completed by end-2012. (BT)
Wah Seong puts demerger plan on hold
Pipe manufacturer Wah Seong has put on hold the demerger plan of its oil&gas business held under Wasco Energy until further notice. Wah Seong cited uncertain global market conditions for the decision. “The board will revisit the proposed demerger at a more opportune time for the listing of Wasco Energy and make an announcement in due course,” it told Bursa Malaysia. (BT) Please see accompanying report
Berjaya Food buys 50pc stake in Starbucks
Berjaya Food Bhd is acquiring a 50% stake in Berjaya Starbucks Coffee for RM71.698m from Berjaya Group, the company said. The purchase will be financed entirely via cash to be raised from a proposed rights issue and any shortfall will be funded from internally generated funds and borrowings, said Berjaya Food in a filing to Bursa Malaysia. It said the acquisition will be an opportunity for Berjaya Food to acquire the established and well-known “Starbucks Coffee” chain of cafes and retail stores in Malaysia. (BT)
The search for Malaysia Airlines' (MAS) new chief appears to have ended. It is learned that the executive committee decided on the new managing director (MD) after a meeting yesterday. Ahmad Jauhari Yahya, the former CEO of power producer Malakoff Bhd, has been offered the job to lead the embattled national airline. However, it is unclear if he will take on the job since he has other interests to pursue, said sources familiar with the situation. Ahmad Jauhari is no stranger to the airline industry since he also sits on the board of Malaysia Airports Holdings Bhd. (BT)
Megasteel disappointed with Miti decision
Megasteel SB says it is disappointed that the Ministry of International Trade and Industry (Miti) has decided against implementing the 35% safeguard duty on the import of hot-rolled-coil (HRC) the steel giant had petitioned for in June. “Megasteel expresses its disappointment over the Government’s announcement not to implement safeguard measures in the face of rising imports, which have severely affected the company’s operations and performance as submitted to the authorities,” the company said in a press statement released yesterday. (StarBiz)
Hunza raises the bar with Gurney Paragon
Hunza Properties (HBP) is set to raise the bar for retail and food scene in Penang with the staggered opening of Gurney Paragon from December this year. Executive chairman Datuk Khor Teng Tong said in its bid to bring in fresh names in retail and dining to the island, the company had lined up a mixture of tenants who have not operated here before. "Besides signing up with TGV Cinemas, Pacific Coffee and Italiennes Restaurant, we are also in talks with luxury goods retailer Valiram Group about bringing several of its brands to our shopping mall," He said the shopping mall, boasting a net lettable area of 700,000 sq ft, will form the second phase, which fronts both Gurney Drive and Jalan Kelawai. It is expected to be completed by end-2012. (BT)
Wah Seong puts demerger plan on hold
Pipe manufacturer Wah Seong has put on hold the demerger plan of its oil&gas business held under Wasco Energy until further notice. Wah Seong cited uncertain global market conditions for the decision. “The board will revisit the proposed demerger at a more opportune time for the listing of Wasco Energy and make an announcement in due course,” it told Bursa Malaysia. (BT) Please see accompanying report
Berjaya Food buys 50pc stake in Starbucks
Berjaya Food Bhd is acquiring a 50% stake in Berjaya Starbucks Coffee for RM71.698m from Berjaya Group, the company said. The purchase will be financed entirely via cash to be raised from a proposed rights issue and any shortfall will be funded from internally generated funds and borrowings, said Berjaya Food in a filing to Bursa Malaysia. It said the acquisition will be an opportunity for Berjaya Food to acquire the established and well-known “Starbucks Coffee” chain of cafes and retail stores in Malaysia. (BT)
The renewable energy (RE) industry has the potential to generate RM70bn in revenue for the country and provide RM1.75bn in tax receipts for the government by 2020. Minister of Energy, Green Technology and Water, Datuk Seri Peter Chin Fah Kui said the RE sector is also expected to create a host of spin-off benefits, including at least RM19bn in loan values for RE projects and the creation of 52,000 jobs for the economy. (Bernama)
The Sustainable Energy Development Authority (Seda), will be revising downwards the quota for all renewable energy (RE) sources for the remaining of this year. The revision is mainly because the Feed-In Tariff (FiT) system for RE will be launched on Dec 1 and not Sept 1 as originally scheduled. Tentatively, the combined quota for renewable energy for 2011 is 111MW for all RE technology. The original plan is to offer 219 MW this year. (Star Biz)
Selangor Dredging Bhd (SDB) expects revenue contribution from Singapore projects to grow to 50% over the next two years, says MD Teh Lip Kim. Currently, the Singapore projects contribute about 30% to SDB's income. She also said SDB aims to launch several new projects in the Klang Valley and Singapore, worth a combined RM1bn, by end-2012.
• The firm will kick off the new projects with the Hijauan in Singapore through its unit SDB Asia. The land measuring about 19,806sf there is located in Cavenagh Road, with a gross development value (GDV) of RM238m. SDB is also planning to build 41 units of luxury apartments in District 9, a prime location in the island republic. It then plans to launch high-end apartments in Batu Feringghi in Penang.(BT)
The Minority Shareholder Watchdog Group (MSWG) is optimistic that the recent MASAirAsia tie-up could work favourably for minority shareholders despite concerns raised by several industry observers. (Malaysian Reserve)
Aluminium Company of Malaysia (Alcom) is concerned about the scheduled energy rate hikes proposed by the government every 6 months.
• With the electricity and natural gas tariff increased, Alcom’s cost will go up as 20% of the company’s cost is energy. (Financial Daily)
Trinity Group is on the lookout for more strategic land in the Klang Valley to develop affordable niche boutique projects.
• The company has an undeveloped land-bank of 8ha and a further 7.3ha in the Klang Valley that are under construction. (Star Biz)
The Sustainable Energy Development Authority (Seda), will be revising downwards the quota for all renewable energy (RE) sources for the remaining of this year. The revision is mainly because the Feed-In Tariff (FiT) system for RE will be launched on Dec 1 and not Sept 1 as originally scheduled. Tentatively, the combined quota for renewable energy for 2011 is 111MW for all RE technology. The original plan is to offer 219 MW this year. (Star Biz)
Selangor Dredging Bhd (SDB) expects revenue contribution from Singapore projects to grow to 50% over the next two years, says MD Teh Lip Kim. Currently, the Singapore projects contribute about 30% to SDB's income. She also said SDB aims to launch several new projects in the Klang Valley and Singapore, worth a combined RM1bn, by end-2012.
• The firm will kick off the new projects with the Hijauan in Singapore through its unit SDB Asia. The land measuring about 19,806sf there is located in Cavenagh Road, with a gross development value (GDV) of RM238m. SDB is also planning to build 41 units of luxury apartments in District 9, a prime location in the island republic. It then plans to launch high-end apartments in Batu Feringghi in Penang.(BT)
The Minority Shareholder Watchdog Group (MSWG) is optimistic that the recent MASAirAsia tie-up could work favourably for minority shareholders despite concerns raised by several industry observers. (Malaysian Reserve)
Aluminium Company of Malaysia (Alcom) is concerned about the scheduled energy rate hikes proposed by the government every 6 months.
• With the electricity and natural gas tariff increased, Alcom’s cost will go up as 20% of the company’s cost is energy. (Financial Daily)
Trinity Group is on the lookout for more strategic land in the Klang Valley to develop affordable niche boutique projects.
• The company has an undeveloped land-bank of 8ha and a further 7.3ha in the Klang Valley that are under construction. (Star Biz)
20110826 1120 Global Market & Commodities Related News.
GLOBAL MARKETS-Asian shares edge up, dollar firm
SINGAPORE, Aug 26 (Reuters) - Asian shares edged up marginally on Friday as investors waited for a speech by Federal Reserve Chairman Ben Bernanke later in the day, while nervousness about the U.S. economic outlook sent the dollar higher.
"The market is lacking upside potential as some doubt there will be another round of quantitative easing from the Fed," said Lee Suk-won, a market strategist at E-Trade Securities.
Oil rises as Hurricane Irene, Libya in focus
NEW YORK, Aug 25 (Reuters) - Oil rose on Thursday due to concerns about Hurricane Irene's impact on U.S. East Coast fuel supplies and fighting in Libya.
"Products are leading the way as the East Coast refining center is in the bullseye of Hurricane Irene." said John Kilduff, partner at Again Capital LLC in New York.
Libya rebel official aims for oil export in 2-3 months
TRIPOLI, Aug 25 (Reuters) - The Libyan rebel government hopes to restart oil exports within two to three months and reach full volumes in about a year, Ali Tarhouni, the official in charge of financial and oil matters told Reuters from Libya's oil ministry in Tripoli.
It was the first time an official from the rebel National Transitional Council was seen in the capital taking up the reins of government, after rebel fighters swept into the city four days ago aiming to topple Muammar Gaddafi.
NYMEX-Natgas trims early gains, still ends up after EIAs
NEW YORK, Aug 25 (Reuters) - Front-month U.S. natural gas futures finished higher on Thursday, although down from morning highs, on support from warm forecasts for the Midwest and Northeast late next week.
"The latest six- to 10-day and eight- to 14-day forecast from NOAA is still suggestive of a call for above-normal levels of cooling demand," Energy Management Institute's Dominick Chirichella said in a report.
Euro Coal-Prices soften as demand slackens
LONDON, Aug 25 (Reuters) - Prompt physical coal prices eased on Thursday by around 50 U.S. cents a tonne as buying interest in Europe slackened further and oil saw more losses.
"There's only one serious buyer in Europe and they've not been very evident in the market today or yesterday," one European trader said.
COMMODITIES-Oil, copper up pre-Bernanke; gold drop halts
NEW YORK, Aug 25 (Reuters) - Gold rebounded on Thursday to halt a two-day plunge while oil and copper ended up too as investors awaited a speech by U.S. Federal Reserve Chairman Ben Bernanke they hoped would hint at new stimulus measures.
"The market is building up toward the Jackson Hole speech," said Harry Tchilinguirian, head of commodity markets strategy at BNP Paribas.
20110826 1012 Global Market Related News.
Asia Stocks Swing Between Gains, Losses (Source: Bloomberg)
Asian stocks swung between gains and losses ahead of a speech by U.S. Federal Reserve Chairman Ben S. Bernanke at a meeting of central bankers and before reports expected to show growth is slowing in the world’s largest economy. Honda Motor Co., a carmaker that gets more than 80 percent of its sales abroad, dropped 1 percent in Tokyo. Billabong International Ltd. (BBG), a surfwear maker whose sales come about half from the western hemisphere, slumped 3.9 percent in Sydney after U.S. initial jobless claims unexpectedly rose. Fairfax Media Ltd., a newspaper publisher in Australia and New Zealand, jumped 8.7 percent after saying it’s preparing an initial public offering of one unit.
The MSCI Asia Pacific Index added 0.3 percent to 120.07 as of 10:22 a.m. in Tokyo, after falling as much as 0.2 percent. About four stocks rose for every three that fell on the gauge, which is headed for its first weekly advance in five weeks. Investors are awaiting a speech by Bernanke today in Jackson Hole, Wyoming, for any indications of whether the central bank will signal further economic stimulus amid worsening economic data in the U.S.
World Economy Faces 50% Chance of Renewed Slump, Nobel Winner Spence Says (Source: Bloomberg)
The global economy has a 50 percent chance of slipping into recession as Europe and the U.S. struggle to grow, according to Nobel laureate Michael Spence. “I’m quite worried,” Spence said in a Bloomberg Television interview in Hong Kong yesterday. “A combined downward dip in Europe and America, which is a good chunk of the industrialized economies, I’m quite sure will take down growth in China particularly, and that will then immediately spread to the rest of the emerging economies.” He put the likelihood of such a scenario “at about 50 percent.” Spence’s remarks follow cuts in global growth forecasts by institutions from Citigroup Inc. to UBS AG as central bankers from around the world gather for a Federal Reserve symposium this weekend in Jackson Hole, Wyoming. Unlike the aftermath of the 2008 global financial crisis when China cushioned the blow with a stimulus program, this time it would only be able to buffer its domestic economy, he said.
GLOBAL MARKETS-Stocks rise, gold tumbles as investors await Bernanke
LONDON, Aug 25 (Reuters) - World stocks edged up on Thursday while gold fell sharply as investors were optimistic the Federal Reserve would signal at a gathering this week that it is committed to supporting the U.S. economy if necessary.
"Everyone is waiting to see what comes of the Wyoming meeting. I would be uncomfortable being aggressively short going into the weekend. And corporate results don't look too bad," said Andy Lynch, fund manager at Schroders.
U.S. Stock Futures Rise Amid Stimulus Speculation Ahead of Bernanke Speech (Source: Bloomberg)
U.S. stock futures rose, following the biggest loss in a week for the Standard & Poor’s 500 Index, amid speculation that U.S. Federal Reserve Chairman Ben S. Bernanke’s speech today may signal another program to boost the world’s largest economy. S&P 500 futures expiring in September rose 0.7 percent to 1,165.60 at 10:19 a.m. in Tokyo. The U.S. equity benchmark lost 1.6 percent to 1,159.27 yesterday as selling in German futures sparked a rout in global stocks. Dow Jones Industrial Average futures gained 0.6 percent to 11,199. Investors are awaiting Bernanke’s speech in Jackson Hole, Wyoming, today at 10 a.m. New York time and will be looking for indications of whether the central bank will embark on further stimulus. Data today may show the U.S. economy grew 1.1 percent in the second quarter, from a previous estimate of 1.3 percent, according to the median of 80 forecasts in a separate survey.
U.S. Consumer Confidence Stabilizes Near Record Low, Bloomberg Index Shows (Source: Bloomberg)
Consumer confidence stabilized last week at a level that’s within striking distance of an all-time low as Americans remained pessimistic about the economy. The Bloomberg Consumer Comfort Index was minus 47 in the week to Aug. 21 compared with minus 48.3 reading the previous period that halted a three-week slide. The gain was within the survey’s 3-point margin of error. The figure is close to minus 54 in January 2009, which matched the worst reading in the history of the series dating back to 1985. Confidence among those earning more than $100,000 a year fell in the past month to the lowest level since 2009, possibly due to stock market weakness and mounting concern the recovery may falter. Unemployment above 9 percent has also soured consumers’ moods, posing a risk of further erosion of household spending that accounts for 70 percent of the economy.
Fed Pledge Inflates Hong Kong’s Misery With Currency Peg: Chart of the Day (Source: Bloomberg)
A U.S. pledge to keep interest rates at record lows through mid-2013 is no boon for Hong Kong, where a “misery index” has climbed the most in the world because of inflation fueled by cheap funding. The gauge, which sums the jobless rate and the annual increase in consumer prices, jumped 570 basis points in the 12 months through July to the highest level in more than 15 years. It was the biggest gain of 56 countries tracked by Bloomberg. The CHART OF THE DAY shows the misery index alongside Federal Reserve cuts to borrowing costs, as investors focus on whether Chairman Ben S. Bernanke will today signal more stimulus in a speech at Jackson Hole, Wyoming. The bottom panel shows the dollar’s weakness against the currencies of six U.S. trading partners. An exchange-rate peg means Hong Kong’s interest rates track those of the Fed and the city’s currency falls with the dollar, boosting import costs.
U.S. Fed’s Monetary Policy May Spur Inflation, India’s Central Bank Says (Source: Bloomberg)
The Federal Reserve’s decision to keep record-low interest rates and the possibility of further steps to spur the U.S. economy may stoke commodity prices and fan inflation in India, the Asian nation’s central bank said. “Given the fiscal limitations and growing signs of weakness in the U.S., the Fed has already indicated that it will pursue its near-zero rate policy at least till mid-2013,” the Reserve Bank of India said in a report in Mumbai yesterday. “It has also hinted at another dose of quantitative easing. This policy stance may keep the commodity prices elevated.” The Reserve Bank has struggled to contain the fastest inflation among major economies even after raising rates 11 times since mid-March 2010. Emerging-market officials are waiting to see whether Fed Chairman Ben S. Bernanke will signal a third-round of asset purchases, known as quantitative easing, at a speech in Jackson Hole, Wyoming, today.
U.S. Stocks Snap Three-Day Rally Amid German Selloff, Jobs Data (Source: Bloomberg)
U.S. stocks fell, snapping a three- day rally, after jobless claims unexpectedly increased and selling in German futures sparked a rout in global equities. The S&P 500 fell 1.6 percent to 1,159.27 at 4 p.m. in New York, according to preliminary closing data. The benchmark gauge rallied 4.8 percent during the previous three days. The Dow Jones Industrial Average declined 170.89 points, or 1.5 percent, to 11,149.82 today.
Bernanke Signaling No Bond Purchases Backed by Data From Prices to Freight (Source: Bloomberg)
Federal Reserve Chairman Ben S. Bernanke tomorrow may disappoint stock investors betting on a commitment to step up stimulus. He has little choice, given rising consumer prices and a U.S. economy that is still growing. Gasoline costs are 33 percent higher, consumer inflation is twice as fast and inflation expectations are above levels since Bernanke signaled more easing a year ago at the annual Fed symposium in Jackson Hole, Wyoming. While the U.S. expansion has slowed, the Chicago Fed’s index of 85 economic indicators improved in July for a third month on gains in production.
Policy makers, who said Aug. 9 they’ll use additional tools “as appropriate,” probably don’t expect a recession or rapid disinflation, making a signal of bond buying premature, said Roberto Perli, managing director at International Strategy & Investment Group in Washington. Instead, Bernanke will probably detail options for further stimulus and clarify how much the Fed’s reduction in its outlook this month stems from long-term obstacles to growth, said Keith Hembre, a former Fed researcher.
Fed caution supports stocks; gold tumbles
LONDON, Aug 25 (Reuters) - World stocks edged up from this month's 11-month low while gold fell sharply as investors took an optimistic view of how strongly the Federal Reserve will commit to supporting the economy at a gathering this week.
"Judging by the recent behaviour of markets, they are expecting either a stimulus package to be announced or Bernanke to elaborate on what weapons remain in his arsenal," Ben Potter, strategist at IG Markets, said.
First-Time Jobless Claims in U.S. Increase, Propelled by Verizon Dispute (Source: Bloomberg)
Claims for U.S. unemployment benefits unexpectedly rose last week, pushed up for a second time by a labor dispute at Verizon Communications Inc. (VZ) Jobless claims climbed by 5,000 to 417,000 in the week ended Aug. 20, Labor Department figures showed today in Washington. Economists surveyed by Bloomberg News projected a drop in claims to 405,000, according to the median forecast. At least 8,500 applications were filed by workers at Verizon last week, compared with 12,500 the prior week, the agency said. The report signals that excluding the communications dispute, companies are slowing the pace of firings, which may ease concern that consumers will cut back on spending. At the same time, an unemployment rate at 9.1 percent is a reminder that a sustained labor-market rebound has yet to develop two years into the economic recovery.
Treasury 10-Year Notes Head for Weekly Loss Before Bernanke Speech Today (Source: Bloomberg)
Treasuries headed for their steepest weekly loss in almost two months on speculation the economy is growing enough to keep Federal Reserve Chairman Ben S. Bernanke from announcing a third round of quantitative easing in a speech today. Yields indicate traders added to inflation bets for the first week this month, damping expectations that the central bank is preparing so-called QE3. Bernanke will speak at the annual Fed symposium in Jackson Hole, Wyoming. He used the platform last year to announce the central bank would “do all that it can” to spur growth and then went on to implement a $600 billion debt-purchase plan in November. “He may not announce QE3, but he will say they have other options to stimulate the economy,” said Hiromasa Nakamura, a senior investor at Mizuho Asset Management Co. in Tokyo, which oversees the equivalent of $38.7 billion and is a unit of Japan’s second-largest bank. “Yields have already declined sharply. We will consider selling” if they fall further, he said.
S&P Prompts $1 Trillion Stockholder Losses With Downgrade Belied by Bonds (Source: Bloomberg)
Shareholders in U.S.-listed companies can thank Standard & Poor’s for making them $1 trillion poorer after the rating firm earlier this month lowered the grade on Treasury securities for the first time to AA+ from AAA. Now, some of the most experienced investors say the stock market losses make no sense. While the benchmark index for U.S. equities dropped as much as 6.7 percent, or $1.03 trillion, since the Aug. 5 downgrade, 10-year Treasuries rallied the most in 28 months and the government was able to finance its quarterly debt obligations at the lowest interest rates ever. The S&P 500 fell to 12.2 times earnings the first day after the downgrade, the lowest since March 2009, while Treasuries have returned 2 percent since.
“One of the most perverse things I’ve seen in 25 years of doing this is that S&P downgrades the United States government, and investors’ reaction is to run towards the securities that they downgrade, selling businesses without asking at what price,” Kevin Rendino, a money manager at BlackRock Inc., which oversees $3.65 trillion in New York, said in an Aug. 23 telephone interview. “Equity prices have swung well too far.”
Dollar Trades Near Week High as Easing Bets Fade Before Bernanke Speech (Source: Bloomberg)
The dollar traded 0.3 percent from a one-week high amid speculation that Federal Reserve Chairman Ben S. Bernanke may today disappoint investors betting he will signal a third round of quantitative easing to spur the economy. The euro dropped against a majority of its major peers as European regulators extended bans on short-selling in equity markets in an effort to prevent the region’s sovereign-debt crisis from worsening. The Australian dollar is set to advance this week against 13 of its 16 major peers as traders pared bets on interest-rate cuts before central bank Governor Glenn Stevens testifies at a parliamentary committee today. “The market has gone from very early in the week expecting quite a large QE3 to now still expecting some measures from Mr. Bernanke, but the expectation has moderated,” said Emma Lawson, a Sydney-based currency strategist at National Australia Bank Ltd. “You can probably still expect a dollar bounce if he does not provide any new measures.”
China’s Stocks Rise Most in 10 Months on Bank Earnings, Fiscal Spending (Source: Bloomberg)
China’s stocks rose the most in more than 10 months after Bank of China Ltd. (601988) reported record profit and investors speculated the Chinese government is increasing fiscal spending to bolster the world’s second-biggest economy. Bank of China, the nation’s third-largest bank, led a gauge of lenders to the second-biggest gain among industry groups after profit surged 28 percent. China Railway Group Ltd. (601390) jumped 2.5 percent and Tianjin Capital Environmental Protection Group Co. surged 10 percent after Shanghai Securities News reported China plans to spend over 2.3 trillion yuan for new subway lines and sewage treatment. PetroChina Co. and Jiangxi Copper Co. paced an advance for commodity producers on speculation the Federal Reserve will announce a third round of asset purchases.
“First-half earnings growth has been part of the reason for the market’s gains,” said Zhang Han, a strategist at Guotai Junan Securities Co. in Shanghai. “The U.S. is likely to use QE3 to pour liquidity into global capital markets.”
Japanese Stocks Swing Between Gains, Losses Ahead of Bernanke Speech (Source: Bloomberg)
Japanese stocks swung between gains and losses after a drop in the yen boosted the earnings outlook for exporters and as investors awaited a speech by Federal Reserve Chairman Ben S. Bernanke today. Honda Motor Co., a carmaker that gets more than 80 percent of its sales abroad, fell 0.5 percent. Canon Inc., which counts Europe as its biggest market, dropped 0.6 percent. Sony Corp. (6758), the country’s No. 1 exporter of consumer electronics, rose 0.6 percent after the yen weakened against the dollar and euro. The Nikkei 225 (NKY) Stock Average was little changed at 8,767.76 as of 9:38 a.m. in Tokyo after dropping as much as 0.3 percent. The broader Topix index rose 0.1 percent to 752.66. For the week, the Nikkei has risen 0.5 percent, while the Topix edged up 0.1 percent.
“Recent U.S. economic reports have shown mixed results, failing to boost confidence,” said Yutaka Yoshii, a strategist at Mito Securities Co. in Tokyo. “As the foreign exchange market shifts toward a weaker yen somewhat, sell pressure is weak for export-related stocks.”
RBA’s Stevens Says Decline in Confidence May Lower Australia’s Inflation (Source: Bloomberg)
Reserve Bank of Australia Governor Glenn Stevens said a decline in consumer confidence driven by the rout in global financial markets will help ease inflation pressures. “Inflation bears careful watching, but we can keep it under control,” Stevens said today in his opening statement to a parliamentary committee in Melbourne. “It would be reasonable to anticipate that a decline in confidence arising from the recent events internationally may well dampen demand somewhat compared with the outlook set out in the Statement on Monetary Policy published in early August.” Since Stevens kept the overnight cash rate target unchanged at 4.75 percent for an eighth straight meeting on Aug. 2, investor confidence has slumped after Standard & Poor’s cut the U.S.’s credit rating and as Europe’s debt crisis deepened. That prompted traders to bet the RBA’s next move will be to reduce the benchmark rate.
Australia Dollar Rises as Stevens’ Inflation Comments Reduce Rate-Cut Bets (Source: Bloomberg)
The Australian dollar rose to a two- week high against the yen after Reserve Bank Governor Glenn Stevens said inflation data is “still concerning,” easing speculation the central bank will cut interest rates. The so-called Aussie appreciated against all of its 16 major counterparts as traders cut bets that the RBA will reduce borrowing costs. The New Zealand dollar snapped a two-day decline against the greenback after TD Securities Inc. said the nation will continue to benefit from China’s growth through dairy exports. “Stevens’ comments suggest the central bank hasn’t abandoned its tightening bias, spurring buying of the Aussie because it’s been sold as the market priced in rate cuts,” said Teppei Ino, an analyst in Tokyo at Bank of Tokyo-Mitsubishi UFJ Ltd. “The strength of New Zealand’s exports is that demand for their dairy products doesn’t fall even when there is concern about a global economic slowdown.”
Biggest Trader-Economist Divergence of ’11 Signals Rate Cut: Brazil Credit (Source: Bloomberg)
Brazilian interest-rate forecasts by economists and traders are diverging by the most this year. Recent history shows traders are more accurate predictors of the country’s monetary policy. The central bank will hold the benchmark Selic rate at 12.5 percent this year, according to the median forecast of about 100 economists in a central bank survey. Yields on interest-rate futures show traders are betting policy makers will lower borrowing costs by 68 basis points, or 0.68 percentage point, this year, according to data compiled by Bloomberg. In Chile, traders also expect a rate cut this year while economists predict the bank will keep it unchanged. Economists and traders are at odds over how much Latin America’s biggest economy will slow as global growth falters. Traders correctly predicted the central bank’s rate increases in April 2011 and July 2010, the last two times that they disagreed with economists, according to data compiled by Bloomberg.
IMF May Authorize Next Greek Payment Under Bailout Plan by End-September (Source: Bloomberg)
The International Monetary Fund may authorize the next disbursement for Greece under a joint bailout with Europe at the end of next month, a spokesman for the fund said. A review of policies attached to the current 110 billion-euro ($159 billion) bailout with the European Union is currently taking place in Athens and should conclude around Sept. 5, spokesman David Hawley told reporters in Washington today. “Assuming agreements are in place, the IMF executive board could be in position to consider approval of the next disbursement towards the end” of September, Hawley said.
Sarkozy Economic-Growth Forecasts Seen as Too High, Pointing to More Cuts (Source: Bloomberg)
French President Nicolas Sarkozy’s budget cuts announced yesterday marked just a first step in meeting deficit targets. That’s because his growth forecasts remain too optimistic even after they were lowered yesterday, said economists including Bruno Cavalier, chief economist at Oddo & Cie. in Paris. Prime Minister Francois Fillon yesterday announced 12 billion euros ($17 billion) of measures in 2011 and 2012 and said the euro region’s second-largest economy will expand by 1.75 percent in each year. The deficit will be 4.5 percent of gross domestic product in 2012, when Sarkozy seeks re-election, beating the target. “I really doubt France will make 1.75 percent next year. My forecast is 1.1 percent and that means the shortfall will then be about 10 billion euros,” said Cavalier. “Once the election is over, it will be much easier to pass extra austerity measures.
Short Sellers May Spend Another Month on European Stock Market Sidelines (Source: Bloomberg)
Investors may face another month of short-selling curbs in Europe after French, Italian and Spanish financial regulators extended temporary bans introduced this month in a bid to stem market volatility. Spain and Italy extended their bans through Sept. 30, regulators in both countries said in a statement. France’s Autorite des Marches Financiers said its ban could last as long as Nov. 11. The regulators all said they might lift the bans on short selling of financial stocks when the market stabilizes. The ban didn’t prevent an 8 percent drop in European bank stocks since it was imposed on Aug. 12 after shares of lenders including Societe Generale SA hit their lowest levels since the credit crisis of 2008.
20110826 1011 Global Commodities Related News.
Corn (Source: CME)
US corn futures end slightly higher on spillover strength from wheat and crop worries. Declining yield expectations, fueled this week by a major crop tour, are underpinning the market. Corn was lower early in the session but rebounded as wheat rallied 1% higher. Still, many traders say the market's upside seems limited in the short-term because prices are already high, which is hurting demand. Traders also wary about another slide in financial markets Friday, depending what the Federal Reserve chairman says in a speech. Sept corn ends up 1/2c to $7.32 1/4. Dec corn, which failed to set a new contract high for the first time in four days, ends up 1/2c to $7.43 1/2.
Wheat (Source: CME)
US wheat futures rally on fund-buying and short-covering. Traders who think the corn market's upside is limited are looking for opportunities in wheat instead, an analyst says. "From a fundamental perspective, it's a strange move," says Shawn McCambridge, senior grains analyst for Jefferies Bache. Notes that weekly export sales were low and that buyers have been choosing Black Sea wheat over US. However, some analysts see strong world demand, even if it's for Russian wheat, as ultimately supportive. CBOT Sept wheat ends up 8 cents, or 1.1% to $7.57 1/4 a bushel. KCBT Sept wheat closes up 1.5% to $8.47 3/4 and MGEX wheat up 0.9% to $9.34 3/4.
Rice (Source: CME)
U.S. rice futures end lower for the third day in a row, as the market retreats from a 2 1/2-year high but remains rangebound. Market had surged this summer on U.S. crop worries, but traders say damage is priced in. Prices remain above last week's low of $16.38 1/2. Sep CBOT rice closes down 10 1/2c to $16.74 1/2.
More Rain Forecast For Germany; Fears For Wheat Quality (Source: CME)
Germany's harvest season will continue amid unsettled weather conditions with more rainfall and cloud forecast for the next five days, raising concerns about the quality of the wheat crop, market participants said. Jim N. R. Dale, senior risk meteorologist at British Weather Services, said that Western Europe needs a weather pattern change that can block high pressure in order to ensure dry weather can last. Excess rain in northeastern and eastern Germany and Poland, as well as abundant precipitation in central Europe, has hampered harvesting this year. Parts of North East Germany have received as much as 200 millimeters of rain in two weeks. Astrid Rewerts, head of plant production at farmers association Deutscher Bauernverband, or DBV, said the wheat harvest isn't yet complete due to bad weather and harvesting conditions in the north and north-east of Germany.
Delays to harvesting in Germany because of heavy rainfall mean only 82% of the country's wheat crop is expected to be of milling quality in 2011-12, analyst Strategie Grains forecasts. Joe Vaclavik, senior grains broker at MF Global said that Germany should be harvesting wheat now, but the conditions are too wet. "Rains helped the crop initially, but are now delaying the harvest and quality is rapidly deteriorating," Vaclavik said. Germany's grain harvest is likely to fall 12% on the year to around 39 million metric tons, driven by extremely unfavorable weather during the entire harvesting season, DBV said Thursday. The association expects the wheat harvest to fall around 12% on the year, to around 21 million tons. U.K. trade house Gleadell said continued rainfall across Germany is resulting in a greater percentage of wheat being used for feed quality--this contrasts with Ukraine, where the proportion of milling wheat in this year's crop has been increased to 70%, from last month's estimate of 60%.
US wheat slides for 2nd day, Canadian f'cast weighs
SINGAPORE, Aug 25 (Reuters) - U.S. wheat futures fell more than 1 percent losing more ground as the market came under pressure from better-than-expected Canadian crop and forecasts of favourable weather in Australia's grain producing areas.
"I guess people are on the sidelines today as everyone is cautious before Bernanke's speech," said Lynette Tan, an analyst with Phillip Futures in Singapore. "It is also higher output forecast for the Canadian crop and some profit-taking after strong gains."
Australia weather bureau sees wetter conditions in grain belt
SYDNEY, Aug 25 (Reuters) - A wetter-than-normal normal spring is expected across the grain growing belt of Western Australia, which could boost the harvest in the country's top wheat exporting state that suffered crop withering drought last year.
There is also a good chance of rain across northern New South Wales and southern Queensland states in eastern Australia where a dry winter has left wheat crops struggling, according to a forecast from the Australian Bureau of Meteorology..
Vietnam 2011 rice exports could hit 7.5-8 mln T-report
HANOI, Aug 25 (Reuters) - Vietnam, the world's second-largest rice exporter after Thailand, could ship between 7.5 million and 8 million tonnes of the grain this year following an expected rise in its annual paddy output, a state-run newspaper reported on Thursday.
A Vietnam Food Association official made the export projection based on an Agriculture Ministry estimate that paddy output could rise to 41.6 million tonnes, the Vietnam Economic Times newspaper said, above a government forecast of a record high of 41.02 million tonnes.
Canada to reap more wheat, record canola
WINNIPEG, Manitoba, Aug 24 (Reuters) - Canada will produce more wheat and reap a record-large canola harvest in 2011 after summer heat helped late-planted crops recover, Statistics Canada said Wednesday in its first forecast of the year based on a farmer survey.
The government statistical agency pegged all-wheat production at 24.076 million tonnes, up nearly 4 percent from a year ago, and the canola harvest at a record-large 13.193 million tonnes, up 11 percent.
SovEcon trims Russia grain crop fcast to 87-88 mln T
MOSCOW, Aug 24 - SovEcon analysts have trimmed Russia's 2011 grain crop forecast to 87-88 million tonnes from 87-90 million tonnes, while keeping its 2011/12 export forecast at 20 million, the firm's chief executive and president said on Wednesday.
"As the harvesting campaign is moving to the Urals and Siberia, the yields are declining and average yields may prove to be close to those in 2009," CEO Andrei Sizov Sr. told a meeting of traders and corporate analysts.
Hurricane may hurt crops in D.Republic, Haiti -UN
MILAN, Aug 24 (Reuters) - Hurricane Irene may have damaged rice and maize crops when it hit northern areas of the Dominican Republic and Haiti on Tuesday, though no strong damage has been reported so far, the United Nations' food agency said.
The storm's heavy rains and strong winds could have hindered harvesting and planting activities in the northern parts of the Dominican Republic, where the main paddy growing areas are located, the Food and Agriculture Organisation (FAO) said on Wednesday.
Global '11-12 Corn Output View 849M Tons (Source: CME)
World corn production is expected to fall by 10 million metric tons to 849 million tons in 2011-12 due to sharp cuts in the U.S. crop forecast, the International Grains Council said Thursday. "But production prospects in the southern hemisphere have improved and the 2011-12 corn crop is still projected to be the largest on record at 849 million tons," the London-based body said. World wheat output is now forecast to hit 677 million tons, up by 3 millions tons on the previous estimate due to improving prospects in Europe, Russia and China. World grain production is expected to hit a record 1.81 billion metric tons in 2011-12, but will still lag increasing global consumption. "The substantial recovery in Black Sea region supplies will result in a major shift back to this origin, especially for wheat, with the downturn in U.S. corn exports also partly offset by expected record Ukraine shipments of this grain," it said.
CHICAGO, Aug 24 (Reuters) - Corn market bulls are bracing for continued price strength in new crop corn prices, judging by the recent surge in call buying in the options arena. Indeed, the amount of potential buying in place at key strike prices up to 25 percent above current corn price levels is greater than the entire U.S. corn inventories being projected to remain at year-end.
Australia New Crop Wheat Sales Hit 500,000 Tons (Source: CME)
Anticipating a bumper crop, Australia has already made advance sales of at least 500,000 metric tons of new crop wheat that will be harvested in the fourth quarter, a senior industry executive said. Exporters have sold several cargoes from the upcoming crop to buyers in Southeast Asia and the Middle East through both private deals and tenders, Tom Puddy, head of marketing with CBH Grain, one of Australia's largest grain co-operatives, said. He said this excludes several positions taken by multinational companies for the next Australian harvest, which are difficult to estimate. Traders had said in June that Australia had started selling new crop wheat when it was still being planted. Puddy said over the last two months, aggressive sales were made for November, December and January shipments. He said Western Australia's wheat output is likely to almost double to 8.0 million-9.0 million tons from 4.5 million tons in 2010-11, when it was hit by a drought.
Puddy pointed that unlike this year, a major part of the exportable surplus in the next marketing season that begins October, will be from Western Australia because the region's local wheat consumption is under 500,000 tons. He said once the supply situation stabilizes, exporters will work with wheat buyers in Japan and South Korea to revert to earlier blending standards. Due to unusually low wheat production in Western Australia this year, Japan and South Korea relaxed the standards for blending of Australian Noodle Wheat with Australian Prime Wheat. There is, however, some concern about potential future damage to the crop due to frost. "There are no reports of such damage so far but we are now heading into the frost season and few wheat growing areas are susceptible," he said. Puddy said drought conditions prevail in parts of New South Wales but any decline in output may be offset by return to normal production in Western Australia.
Australia may still produce at least 24 million tons wheat in 2011-12, close to the record 26 million tons this year, he said. Due to the record output last year, mostly in Eastern Australia, the country is sitting on a large stockpile most of which had been downgraded to feed grade after heavy rains and flooding earlier in the year damaged some of the crop. Puddy said Australia may still have around 7.0 million tons of wheat stocks by end-September, of which around 60% will be feed-grade.
Paraguay, Uruguay Consider Farm Taxes Amid High Grain Prices (Source: CME)
With grain prices near all-time highs, the governments of two major South American farming nations want to tap into the global commodities boom by taxing the farming sector. Argentina, the world's No. 3 soybean exporter, pioneered the concept of taxing the bonanza in the countryside by imposing a 35% levy on soy exports. The government expects to rake in $8 billion from that tax this year, up from $6.3 billion in 2010. Now Paraguay is looking to tax grain exports, while Uruguay is pushing for a property tax on farmland. Paraguay is the world's fourth-largest exporter of soybeans, which are the small landlocked country's largest source of foreign currency. Soy production hit 8.4 million metric tons this year, up from 3.6 million tons just five years ago as vast swaths of the country have been cleared for modern soybean cultivation using genetically modified seeds.
Paraguayan Senator Ramon Gomez Verlangieri of the government-allied Liberal Party has introduced legislation to impose a 6% tax on soybean, corn and sunflower-seed exports. The bill has the backing of President Fernando Lugo, but is opposed by farmers and business groups. The tax could raise about $160 million dollars a year at current prices, according to Paraguayan accounting association Contabilidad.com.py. In Uruguay, President Jose Mujica is steeling for a fight over legislation that would impose significant property taxes on farmland to increase government revenue and dissuade ownership concentration. Under the bill, landowners with 2,000 to 5,000 hectares (4,940 to 12,350 acres) of productive land would pay $8 per hectare each year, rising to $12 for holdings of between 5,000 and 10,000 hectares and $16 for holdings that exceed 10,000 hectares.
Uruguay's land prices have risen 25% a year on average during the past five years, according to the bill. At the same time more and more land has become concentrated in fewer hands, with 10% of the biggest landholders controlling 64% of the country's farmland, according to the government. But farmers are firmly against the tax. "Anything that limits or blocks [agricultural] investment is bad," Jose Bonica, president of the Uruguay Rural Society, told local television channel Teledoce. Uruguay's agriculture-based economy produced 1.5 million tons of soybeans during the 2010-11 season. Taxes are a sensitive issue in farming circles. Argentina's farmers broke into open revolt when the government tried to impose even higher export duties in 2008.
Wheat Rises as Dry Weather Threatens U.S. Winter Sowing; Corn, Soy Steady (Source: Bloomberg)
Wheat futures rose to a 10-week high on speculation that dry weather in the U.S. Great Plains will limit planting of the winter crop during the next two months. Corn and soybeans were little changed. The southern Plains may have “only a few scattered thundershowers” through Aug. 30, with most of the rain coming in northern areas, according to a Telvent DTN forecast. Much of southern Kansas, Oklahoma and Texas, the three biggest winter- wheat growers last year, are experiencing “exceptional” drought, the most severe rating on the U.S. Drought Monitor maintained by the University of Nebraska in Lincoln. “Wheat is underpinned by the hard, red winter-wheat- planting concerns,” Mike Zuzolo, the president of Global Commodity Analytics & Consulting, said by telephone from Lafayette, Indiana. “The weather is looking very, very dry, and farmers are under crunch time for getting moisture replenished before planting fields in mid-September.”
ICE sugar slips off contract highs, coffee up
LONDON, Aug 25 (Reuters) - ICE sugar eased off contract highs consolidating recent gains, while arabica coffee was higher as chart-based buying continued to support the market. Cocoa prices were slightly lower as ample supplies weighed on the short-term outlook.
Raw sugar futures fell in early trading, with the market still vulnerable to sharp swings based on broader investor sentiment, while also remaining underpinned by Brazil's smaller-than-expected crop.
Brazil's Bahia cocoa mid-crop to beat forecast
SAO PAULO, Aug 24 (Reuters) - Cocoa arrivals in Brazil slowed slightly in the last week with the mid-crop now past the peak of the harvest, data from the Bahia Commercial Association showed, but Bahia output looks set to beat forecasts.
There is little doubt that forecasts months ago of up to 1.05 million bags from the main cocoa state Bahia will now be exceeded with six weeks left to run on the harvest, cocoa analyst Thomas Hartmann said in a weekly crop update.
Irene Prompting U.S. Northeast to Prepare for Biggest Hurricane Since 1985 (Source: Bloomberg)
New York, New Jersey and Delaware officials are preparing for the possibility of mass evacuations as Hurricane Irene threatens to wreak the most havoc in the Northeast since Hurricane Gloria in 1985. More than 65 million people, or one in five Americans, may be affected by the storm, which is forecast to snake from North Carolina to Maine in the coming days, according to data compiled by Bloomberg. Northeasterners may mimic the rituals of their counterparts in the Southeast, who have already begun fleeing coastal areas. New York City officials will decide tomorrow whether to call for the evacuation of low-lying areas, while New Jersey Governor Chris Christie, New York Governor Andrew Cuomo and Governor Martin O’Malley of Maryland declared states of emergency.
Crude Oil Futures Rise on Speculation of More Stimulus, Hurricane Threat (Source: Bloomberg)
Crude oil increased on speculation Federal Reserve Chairman Ben S. Bernanke will announce more stimulus and as Hurricane Irene threatened to shut refineries on the U.S. East Coast. Prices rose on anticipation Bernanke will announce a third round of quantitative easing at Jackson Hole, Wyoming, tomorrow. Irene is the strongest Atlantic storm to threaten the U.S. since 2005. The East Coast has 10 operating refineries that can process 1.21 million barrels of oil a day, accounting for 7.1 percent of the country’s capacity. “There’s a hard-to-defeat feeling that something fresh will be announced at Jackson Hole tomorrow,” said Peter Beutel, president of trading advisory company Cameron Hanover Inc. in New Canaan, Connecticut. “There’s an increasing focus on Irene and all the damage it can do to refineries along the East Coast. Gasoline is up a lot on this and pulling crude higher.”
Oil Falls, Trimming Weekly Gain, on Outlook for Economic Slowdown in U.S. (Source: Bloomberg)
Oil fell from a two-day high in New York, trimming the first weekly gain in five, as investors bet that signs of a slowing economy in the U.S. indicate fuel demand may falter in the biggest crude-consuming nation. Futures slipped as much as 0.6 percent before a report today that may show U.S. economic growth dropped in the second quarter and a speech by Federal Reserve Chairman Ben S. Bernanke. Hurricane Irene is threatening to shut refineries on the U.S. East Coast. Brent crude’s premium to New York futures widened for a second day. “All eyes tonight will be on global central bankers at Jackson Hole and in particular Fed Chairman Bernanke’s speech,” economists at Australia & New Zealand Banking Group Ltd., led by Warren Hogan, said in a note today. The bank estimates oil will average $100 a barrel in the third quarter. “The major question for markets is whether Bernanke will indicate any further prospect of a policy stimulus.”
Brent oil rises above $110 on Fed optimism
LONDON, Aug 25 (Reuters) - Brent crude oil edged above $110 a barrel on Thursday, supported by a drop in U.S. inventories and investor hopes that the Federal Reserve may announce stimulus measures for the U.S. economy on Friday.
"The market is building up toward the Jackson Hole speech, and has found support from the draw in crude inventories this week and the durable goods orders in the U.S.," said Harry Tchilinguirian, head of commodity markets strategy at BNP Paribas.
Cash Gold Declines After Global Equity Slump Prompts Rebound in New York (Source: Bloomberg)
Gold fell after rebounding in New York from its worst two-day drop since 2008. Global equities tumbled in Europe and the U.S., prompting demand for a haven. Bullion for immediate delivery declined 0.6 percent to $1,763.28 an ounce after gaining 0.8 percent yesterday. The metal dropped 7.3 percent in the two days through Aug. 24, the most since October 2008. “The market will probably be in hold mode until we have a listen to what Bernanke says this evening at Jackson Hole,” said David Lennox, a resource analyst at Fat Prophets in Sydney. “I wouldn’t think traders would be too anxious to bet one way or the other at this point because I don’t think anyone really knows what he might say.”
Gold Rebounds as Equity Slump Revives Demand for Precious Metal as a Haven (Source: Bloomberg)
Gold rebounded in New York, halting the biggest decline since 2008, as slumping global equities revived the appeal of the precious metal as a haven asset. Global stock markets fell, sending the MSCI World Index of equities down as much as 1.4 percent, as French, Italian and Spanish regulators extended temporary bans on short selling introduced this month. Gold prices tumbled 7.1 percent in the previous two sessions, after gaining as much as 18 percent this month to an all-time high of $1,917.90 an ounce on Aug. 23. “Gold is making a comeback,” said Adam Klopfenstein, a strategist at MF Global in Chicago. “Flight-to-quality fears still persist, and gold is putting on its risk-aversion hat.”
20110826 1009 Soy Oil & Palm Oil Related News.
Soybeans (Source: CME)
U.S. soy futures settle mixed amid a lack of fresh supportive news and overhead resistance. While traders are worried about the U.S. crop due to a dry August, demand is lackluster and at high prices analysts say the market could struggle to break higher. Analysts note $14 has been long-term resistance. Prices underpinned Thursday by a rally in the wheat market. Sep soybeans closed down 1/2c to $13.86, while 2012 contracts were higher.
Soybean Meal/Oil (Source: CME)
Sep soyoil closes down 0.18c to 55.6 cents a pound while Sep soymeal closes up $1.00 to $368 a short ton.
Palm slips for 2nd day on demand worries
KUALA LUMPUR, Aug 25 (Reuters) - Malaysian palm oil futures fell on worries over slower overseas demand after top producer Indonesia revised its export tax structure that could make its shipments cheaper and on caution over the global economy.
"The Malaysian market fell because Indonesia has made changes that makes its own exports more competitive now," said a trader with a foreign commodities brokerage in Kuala Lumpur.
Contamination could halt India rapeseed meal exports to China
NEW DELHI, Aug 24 (Reuters) - India's rapeseed meal exports to China, which total over 450,000 tonnes per year, could halt if a "very serious" contamination of cargoes is not resolved by Sept. 17, the main trade body for Asia's leading supplier said on Wednesday.
China, which takes about half of India's rapeseed meal imports, said in June it had found traces of malachite green, a hazardous chemical, in shipments from the south Asian nation and from Malaysia.
Indonesia palm tax change won't stop flow distortions
JAKARTA, Aug 25 (Reuters) - Trimming the Indonesian palm oil export tax cap by a maximum of 5 percent, a move widely expected by market players, will do little to stop the current distortion of flow to the global market, an industry association said on Thursday.
In late July, an industry ministry official told Reuters that Indonesia may cap its maximum export tax for the edible oil to 20 percent from 25 percent.
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