Quick Overview

• U.S. Consumer spending rose 0.4% in July

• U.S. Personal income rose 0.2%.

• The Semiconductor Industry Association said worldwide semiconductor sales totaled $25.2 billion in July, up 1.2% MoM and up 37% YoY

• The Bank of Japan, under strong political pressure to stem the yen's surge, extended an emergency-loan to domestic financial institutions of Y10 trillion of six-month loans, but markets were unimpressed by the monetary easing.

• U.S. June crude oil use up 2.5%. The highest level in any month since October 2008.

• Chinese data Friday showed the country's early-season rice output, which accounts for about a fifth of total rice production, slipped by 6.1% compared with last year to 31.32 million metric tons.

• "We have now had almost constant rain for the last four weeks, and people are getting seriously concerned that the wheat harvest has suffered quality damage," a German trader said.

• Indonesia, which is the world's No. 2 robusta producer after Vietnam, may produce 500,000 tonnes of coffee beans this year, down from an estimated 550,000 tonnes in 2009, said Rachim Kartabrata, secretary general of the Indonesian Coffee Exporters Association.

• Poland's Q2 GDP rose 3.5% from the same quarter last year.

Quick Overview

• (Bloomberg) -- Federal Reserve Chairman Ben S. Bernanke said the U.S. central bank “will do all that it can” to ensure a continuation of the economic recovery and that more securities purchases may be warranted if growth slows.

• U.S. GDP growth was revised downward to an annual rate of 1.6% in Q2, compared to an initial estimate of 2.4%, the Commerce Department reported Friday.

• Britain's economy expanded at a faster pace than initially thought, with growth of 1.2% in Q2

• Japanese Prime Minister Naoto Kan said on Friday the government would approve fresh stimulus measures.

• USDA's attaché in Moscow pegs 2010-11 Russian wheat production at 41 million tons, 9% below USDA's latest estimate. Traders expect R

• Russia will need to increase imports to make up for the shortfall.

• Sudden death syndrome disease is spreading in Iowa and Illinois.

• The USDA said rough rice combined stocks total 36.69 million hundredweight. That is "moderately greater" than USDA's 2009-10 ending stocks estimate of 33.9 million hundredweight in its Aug. 12 supply-and-demand report.

• Czarnikow: Our latest analysis indicates that the increase in global production will now not be enough to build a surplus across markets in the coming year. This means that the 10/11 balance sheet is more likely to be in equilibrium than surplus and that stock levels will remain fragile.

• Sugar prices gained on concern that dry weather will lower production in Brazil

• A new study from researchers in Canada and Sweden has shown that biosynthetic corneas can help regenerate and repair damaged eye tissue and improve vision in humans.

• (WGC) Over the longer-term, demand for gold in China is expected to grow considerably. A report recently published by The People’s Bank of China and five other organizations to foster the development of the domestic gold market will add impetus to the growth in gold ownership among Chinese consumers.

• (Bloomberg) -- Gold demand in Vietnam, which consumes more of the precious metal per head than India and China, is set to surge as the third devaluation in the past year and a stock-market slump combine to spur sales.

Quick Overview

• Initial claims for U.S. unemployment benefits fell 31,000 to 473,000 last week, below market expectations for a drop to 490,000. But the four-week average of new claims -- considered a better measure of underlying labor market trends -- rose 3,250 to 486,750, the highest since late November.

• The International Grains Council Thursday slashed its forecast for world wheat production and warned of a widening deficit as Russia's livestock industry boosts consumption to record levels. Global wheat production in 2010-11 is expected to hit 644 million metric tons, the IGC said, down 7 million tons from its July estimate and 4.9% lower than last year. World wheat consumption is expected to rise by 2 million tons compared with its previous forecast to a record 657 million tons due to surging consumption in Russia, leaving the market with a deficit of 13 million tons.

• The Spanish economy expanded by 0.2 % in Q2, although it contracted by 0.1 % YoY

• Russia's inflation in the first half of 2010 was the third highest in Europe at 4.8%. This is behind Romania and Malta, where it was 5.4 and 5.5 percent, respectively.

• YoY the Philippine economy grew 7.9% in Q2

• India overtook Japan in demand for oil among Asian nations in the second quarter of 2010.

• The International Grains Council said higher rice production will improve supply and rice ending stocks will rise by a significant 6 million metric tons to 97 million tons in 2010-11.

• According to the international Cocoa organization the cocoa market faces a growing deficit as rising demand for the beans outpaces world production. World grindings are expected to increase by 143,000 to 3.632 million tons in the 2009-10 crop year. This is a 3,000 ton increase on its previous quarterly forecast.

• Unica said in its second crop estimate for the season that the sugar crush volume is 4.3% below its previous estimate in April of 595.9 million tons.The estimate, however, is 5.2% above the 542 million tons crushed in the last crop season.
  
  
  
  

Quick Overview

• Truck tonnage continued its string of YoY gains, rising 7.4% in July from last year, the eighth straight increase, American Trucking Associations said.

• (Reuters) - U.S. food prices are forecast to rise at their lowest rate since 1992, the Agriculture Department said.

• The U.S. DOE said:
• Inventories of crude rose 4.11 million barrels in the week to Aug. 20, dwarfing a forecast for a build of 200,000 barrels.
• However, crude oil inventories at the key Cushing, Oklahoma, delivery hub fell 779,000 barrels to 36.3 million barrels, about the only bullish feature in the weekly report.
• Inventories of Gasoline rose 2.27 million barrels, at odds with forecasts of a small drawdown.
•  Inventories of Distillate stocks increased by 1.76 million barrels.

• (CNBC) Changes to the US bankruptcy code, enacted in 2005, are coming back to haunt banks, according to Yra Harris, a veteran trader at Praxis Trading. Harris told CNBC that banks lobbied hard for changes to the bankruptcy code, but the legislation is now having the effect of encouraging consumers to do all they can to pay down their credit cards, while leaving their mortgage payments on the backburner.

• U.S. Durable goods orders overall for July gained 0.3%, but stripping out transportation the number actually fell 3.8%. Forecasts called for a 2.8 percent increase.

• (Bloomberg) -- Germany, the European Union’s second-biggest wheat grower after France, may report a 12 percent drop in grain harvests this year after crops were hit with both drought and flooding, a farmers group said.
  

Quick Overview

• The National Association of Realtors said U.S. sales of previously owned homes dropped a record 27.2 % from June to an annual rate of 3.83 million units, the lowest level since May 1995. June's sales pace was revised down to a 5.26 million-unit pace. Analysts expected existing home sales to fall 12%.

• Germany's GDP expanded at 2.2% in Q2

• South Africa's GDP rose 3.2% QoQ

• Germany's deficit rose to 3.5% of economic output in the first half of 2010.

Quick Overview

• A composite index of euro-area purchasing managers fell to 56.1 from 56.7 in July

• Buckwheat disappeared from all food stores across Moscow city, the Interfax news agency reported on Monday. Prices for buckwheat jumped from 20 to 76 rubles (from 0.65 to 2.5 U.S. dollars) per kilogram during the last weekend. The report said buckwheat also disappeared from the supermarkets in Ukraine.

• Russia has harvested 40.3 million tonnes of grain by Aug 19, or 38 % less than in 2010, Deputy Agriculture Minister Alexander Petrikov said

• Fears are resurfacing about dry conditions for US autumn wheat sowings, following a lack of rain in south eastern parts.

• Malaysia's unemployment rate rose to 3.7 %

• YoY Thailand’s GDP during the first half (Jan-June), 2010, grew 10.6%

• Floods in Pakistan have destroyed or extensively damaged crops over 4.25 million acres (1.72 million hectares) of land, Food Minister Nazar Muhammad Gondal said on Monday. The total areas under cultivation are about 23 million hectares.
• Flood surges triggered by unprecedented monsoon rains have washed away 15% to 20% of the summer rice crop, which was in the process of being sown, the president of the Pakistan Agricultural Farms Association said

• (Bloomberg) -- The amount of money flowing into bond funds is poised to exceed the cash that went into stock funds during the Internet bubble, stoking concern fixed-income markets are headed for a fall. Investors poured $480.2 billion into mutual funds that focus on debt in the two years ending June, compared with the $496.9 billion received by equity funds from 1999 to 2000, according to data compiled by Bloomberg and the Washington-based Investment Company Institute

• Vietnam has raised export floor prices for its top quality 5-percent broken grain (Rice)to $430 a tonne from $400 a tonne

• Sugar production in South Africa, the biggest producer on the continent, may fall to the lowest in 15 years because of a drought this season, Trix Trikam, executive director of the South African Sugar Association, said.

Quick Overview

• MoM U.S. home foreclosures rose nearly 4% in July to a total of 325,229, marking the 17th consecutive month with a foreclosure activity total exceeding 300,000, according to RealtyTrac.

• Pro Farmer Midwest Crop Tour said it pegged the 2010-11 U.S. crops at 3.5 billion bushels, above USDA's August estimate of 3.4 billion.

• Statistics Canada exceeded expectations by estimating the 2010-11 all-wheat crops at 22.7 million tons.

• Rain is expected in Russia’s northern crop areas during the next 10 days.

• Russia, hit by a record drought that has destroyed a quarter of its crops, has no plans to import grains this year, the agriculture ministry said Friday. On Thursday, the Vedomosti daily, citing a source close to the top of the agriculture ministry, said Russia could import at least five million tons of grain, mainly from Kazakhstan..

• Brokers said 15 ships were chartered to export mainly grains cargoes from the U.S. Gulf in recent days, rising from a four-week average of seven vessels.

• Singapore’s minister for Finance and Transport Lim Hwee Hua said on Friday this is the first time that Asia has led a global recovery, and the turnaround in the region is more entrenched, and has progressed further than that of the advanced economies.

• Thailand's Prime Minister Friday said he is confident the export sector would help lift GDP growth in 2010 to at least 7% YoY.

• (FT)The US Department of Agriculture on Thursday relaxed regulations on sugar import quotas, citing “increased tightness in the US raw sugar market”. The government agency predicts US sugar inventories will next year fall to the lowest in at least 40 years while the International Sugar Organisation expects this year to see the lowest global stocks of the sweetener in 20 years.

• The U.S. federal budget deficit will surpass $1.3 trillion in 2010 and is expected to be the second largest shortfall in the past 65 years, the Congressional Budget Office estimated Thursday.

• (Business News Americas) South American crude steel production totaled 21.3Mt in the first half, an increase of 33.2% year-on-year, according to the latest figures from the World Steel Association. Production in June jumped 34.4% to 3.71Mt from 2.76Mt in the same month of 2009, the association said. Brazil, Latin America's largest crude steel producer, increased output 55% to 16.4Mt in H1, and 46.8% to 2.85Mt in June. North American production - which includes Mexico, Central America, Cuba and Trinidad & Tobago - rose 60.1% to 56.6Mt in the first half, while it showed a 55.2% increase to 9.87Mt in June. Global output soared 27.9% to 706Mt in H1 and 18% to 119Mt in June. China, the world's largest producer, increased output 21.1% to 323Mt in the first half and 9% to 53.8Mt in June. The capacity utilization ratio of the 66 countries reporting to worldsteel declined to 80.6% in June from 82% in May, but registered an increase of 8.3 percentage points compared to June 2009.

• Hangzhou Iron & Steel Co., a major Chinese steelmaker, said Saturday its net profit in the first half of the year surged 596.33 % YoY

• Brokers said that capesize ship chartering activity had been driven by Chinese iron ore imports from Australia and Brazil after Karnataka, India's second-largest ore producing state, banned exports from 10 of its ports last month.

• Daily consumption of oil in the U.S. declined 5% to 18.7 million barrels over a 10–year period ending in 2009, according to the U.S. Energy Information Administration. By contrast, China's daily oil consumption increased 73% to 8.2 million barrels over the same period.

• YoY Mexico's GDP rose 7.6% in Q2

Drought drives decade-long decline in plant growth: study
Zhao and Running's analysis showed that since 2000, high- latitude Northern Hemisphere ecosystems have continued to benefit from warmer temperatures and a longer growing season. But that effect was offset by warming-associated drought that limited growth in the Southern Hemisphere, resulting in a one-percent net global loss of land productivity. The team published its findings on Friday in the journal Science.

Updates resume Sunday

Quick Overview

• U.S. Mortgage applications rose 13%. The increase was driven by a 17% surge in applications to refinance home loans, the Mortgage Bankers Association said.

• Ukraine is set to limit wheat and barley exports to 3.5 million tonnes from now until the end of the year due to the impact of a severe drought, the agricultural policy ministry said yesterday. They put the decision off today, saying they needed more time to study how much wheat and barley has already been shipped overseas.
• Russian meteorologists said on Wednesday Moscow's deadly heat wave was ending after two months of searing weather.
• Russia's ban on grain exports is stirring both political and economic anxiety in Egypt, the world's largest wheat importer where half of the 80 million residents rely on subsidized bread to survive.

• BHP Billiton launched a hostile $39 billion bid for Potash Corp to become the world's top fertiliser maker

Quick Overview

• (Arlan Suderman)  Iowa State plant pathologist says "over 50%" of Iowa soybean fields affected by Sudden Death Syndrome this year.

• U.S. wholesale prices rose 0.2% in July -- the first time in four months.

• Britain's CPI increased by 3.1% in July

• Peru's GDP growth reached 11.92% in June, the highest in 21 months.

• YoY Ukraine's gross domestic product (GDP) grew by 6% in Q2

• U.S. housing starts rose 1.7% for July as building permits drop 3.1%.

• Fed hasn't lost confidence in recovery - says the Minneapolis Fed president.

• U.S. household debt dropped in Q2, the seventh quarterly decline in a row. As of the end of June, total consumer indebtedness fell 6.5 % from its peak level in Q3 of 2008, and down 1.5 % QoQ.

Quick Overview

• The New York Fed said it’s "Empire State" general business conditions index increased to 7.10 in August from 5.08 in July. The figure was below the 8.00 expected by economists

• The National Association of Home Builders confidence index fell to 13 in August, down from 14 in July.

• Japan's GDP slowed to an annualized pace of 0.4 % in the three months ended June 30

• (WSJ) A federal judge's decision Friday to undo the government's five-year-old approval of genetically-modified sugar beets, from which roughly half of U.S. sugar is derived, won't disrupt supplies for at least a year, but could pose headaches for food companies after that.

• (Bloomberg) -- Russia’s drought, which spurred the biggest wheat-price rally since 1973, may push world food costs higher as shortages create “panic” among importers, said Lester Brown, the president of the Earth Policy Institute. Sparse precipitation will become more common as global warming creates more volatile weather, Brown said today in a conference call with reporters. Russia’s export ban on wheat, imposed last week, is a harbinger of future governmental actions as food scarcity becomes the worldwide norm, Brown said. “Importers become nervous” when exporters restrict trade, said Brown, who for decades has argued that human food and energy demands are outstripping nature’s capacity to meet them.

• London House prices fell 4.1% wiping out 2010 gains.

• Russia's severe drought may cut its grain output by 40 percent this year.

•  Russia’s Sugar Producers’ Union has cut its beet-crop forecast by 20 %.

• Spot gold is trading at its highest level in more than six weeks -- breaking through resistance at $1,220

• China's trade surplus rose to $28.7 billion in July from $20 billion in June, the highest level since January 2009

• Shenzhen-EU 2010 first 6 month trade rose 34.9%

• Brazil's year-to-date trade surplus totaled $10.6
  billion, compared with a surplus of $18.43 billion in the same period of 2009.

• (FT)Prices of palm oil, which accounts for 60% of the world’s vegetable oil supply, have risen to their highest levels since May 2009 because of heavy rain and floods in Indonesia, which accounts for nearly a half of global production

I’m on strike this week -- next update Sunday.

Quick Overview

• Germany’s exports rose 3.8% MoM.

• Soil is too dry for Russian wheat growers to sow the winter crop. They have a window to do that between late August and early September.
• SovEcon dropped their estimate of this year's Russian wheat crop to 43-44 MMT
•  Russia's Agricultural Ministry has cut its 2010 grain
  harvest forecast to between 60 million and 65 million tons, the Interfax news agency reports Monday
• Rubber futures may climb to a 25- month high as supply in Thailand, lags behind growing demand because of bad weather, according to Von Bundit Co., the country’s biggest producer.

• Greek industrial production fell 4.5% in June

• Danish exports excluding ships and aircrafts fell 5.3% MoM

Commodity spike queers the pitch for Bernanke's QE2
Do we have any assurance that central banks have learnt their lesson? Clearly not the ECB, judging from Mr Trichet's ill-judged article for the Financial Times two weeks ago: "Now it is Time for all to Tighten". Much of what he wrote is correct in as far as it goes. Public debt is out of control. Budget stimulus may start to backfire. We are at risk of a "non-linear" rupture should confidence suddenly snap in sovereign states.

Quick Overview

• The U.S. jobless rate held steady at 9.5%. Non-farm payrolls fell 131,000, while private employment rose 71,000 after increasing 31,000 in June.

• Greek CPI rose 5.5% YoY in July

• MoM Japan's coincident composite index rose 0.1 point

• MoM the French budget deficit narrowed to EUR 61.7 billion in June from EUR 67.9.

• U.K. manufacturing output rose 1.6% QoQ

• Italia’s GDP grew 0.4% QoQ

• Spain's GDP grew 0.2%

• Canada's unemployment rate rose to 8% in July from 7.9% in June.

• Brazil's GDP will grow 7.1 % YoY, said the IMF

• Gulf ports are expecting 61 ocean-going vessels to be loaded with grain during the next 10 days. Up 25% YoY

• (Dow Jones)--Egypt will be able to take delivery of at least 470,000 metric tons of Russian-origin wheat marked for September delivery despite a ban on exports following comments Friday by Russia's first deputy prime minister.

Quick Overview

• Wheat prices go limit up in Chicago after  Vladimir Putin announces a ban on grain exports from drought-stricken Russia. Ukraine cancels contracts.(Where are all the "burdensome stocks" now?)  
• 589 separate blazes were burning throughout Russia
• WILL THE FSU NEED TO IMPORT GRAIN?
• (Bloomberg) A 45,000-metric-ton wheat shipment to the Philippines from Russia or Ukraine was canceled, according to two grain traders who track inbound cargoes.

• Philippines' inflation for July at of 3.9 %

• Americans applying for initial unemployment benefits climbed by 19,000 to 479,000 in the latest week.

• ECB and BoE leave rates unchanged

• Germany’s Industrial orders rose 3.2% in June

• Mohamed El-Erian, the head the world's largest bond fund, has said the United States faces a one in four chance of suffering deflation and a double-dip recession.

Quick Overview

• The Institute for Supply Management said its services index rose to 54.3 from 53.8 in June. The report's employment component rose to 50.9 from 49.7.

• Russia's services purchasing managers index eased to 54.2 in Russia's hottest July on record, down from a reading of 55.4 the previous month.

• Australia’s trade balance showed an increase of 1.714 million to a surplus of A$3.54 billion in June.

• Australia’s house prices rose 3.1% in Q2

• Shanghai’s trade with Taiwan increased 66.6 % YoY
• Singapore's Purchasing Managers' Index (PMI) hit 52.2 points in July, up 0.9% MoM

• YoY Malaysia's exports rose 17.2 %

• Brazil's industrial production fell 1 % MoM, the third consecutive decrease in the year.

• Indonesia’s export rose almost 45 % in the first half this year,

• China's economy would grow by 9.2% in Q3 from the same period last year, the State Information Center said in its economic review quarterly.

Quick Overview

• EU producer price index rose 0.3% in June.

• U.S. factory orders fell 1.2% in June

• The U.S. savings rate rose to 6.4% in June -- the highest level in a year.

• U.S. pending home sales sank 2.6% to 75.7 in June, partly reflecting the end of a federal tax credit for first-time buyers of up to $8,000.

• Moscow says grain stocks will balance drought-ravaged crop – easing wheat prices back.

• (Bloomberg) -- Russia should ban grain exports this season temporarily to allow suppliers to renege on contracts as the worst drought in at least 50 years threatens to leave local demand unmet, Glencore International AG’s Russian unit said.

• Many popular dietary supplements contain ingredients that may cause cancer, heart problems, liver or kidney damage, but U.S. stores sell them anyway and Americans spend millions on them, according to Consumer Reports.

Quick Overview

• S.Korea’s exports up 29.6% YoY

• MSCI Asia ex-Japan index up 1%

• China's PMI index fell to a 17-month low of 51.2 from 52.1 in June.

• Farm production in Pakistan, Asia’s third-largest grower of wheat and the fourth-biggest producer of cotton, may decline 10 percent to 15 percent because of damage caused by the worst flooding in memory, according to an industry official.

• Wheat prices continued to rally over possible wheat export controls in the Black Sea states, which continue to suffer from their worst drought in over a century. Russia produces about 8% of world wheat output.

• The Institute for Supply Management (ISM) index fell to 55.5% in July from 56.2% in June. The decline was not as sharp as expected.

• (Reuters) - The U.S. economy is improving but has yet to recover fully, with high unemployment and a weak housing market weighing on consumers, Federal Reserve Chairman Ben Bernanke said on Monday.

Hot political summer as China throttles rare metal supply and claims South China Sea
The US Magnetic Materials Association said America has drifted into a "silent crisis" and needs to crank up its own supply chain within three to five years."Immediate action must be taken to free the US from complete foreign dominance."

Quick Overview

• China's gross domestic product (GDP) is expected to expand more than 9 percent in 2010, Yi Gang, head of the State Administration of Foreign Exchange (SAFE), said Friday.

• Chinas purchasing managers’ index fell to 51.2 from 52.1 in June

• The Canadian Wheat Board expects this year's crop to fall 17% YoY
• The wheat harvest in western Canada was pegged at 18.45m tonnes, a reduction of 450,000 tonnes on its estimate last month.
• Durum, the type of wheat used in pasta, production estimate was cut by 300,000 tonnes to 2.9m tonnes -- half last year's production.
• Barley harvest was cut by 100,000 tonnes to 7.5m tonnes.

• A survey shows that global chief executives have ranked the increasing complexity of the global economy as the top challenge facing businesses this decade.

• While the Unites States is only in fourth place as a solar energy market, behind Germany, Italy and Japan, its solar energy technology is farther advanced than any other country in the world, Rhone Resch, president and CEO of the U.S. Solar Energy Industries Association, said.

• German grain production will fall as much as 11% to 44 million metric tons from last year, Alfred C. Toepfer International GmbH said.

• (Arlan Suderman) FSU drought persists, cncrns expand to corn.

Quick Overview

• Spanish unemployment rose for a 12th consecutive quarter to 20.09%, its highest level since the end of 1997 and up from 20.05% in Q1.

• The U.S. Commerce Department said gross domestic product expanded at a 2.4% annual rate, less than the 2.5% analysts expected.

• Japan’s unemployment rate rose to 5.3% in June from 5.2% in May.
• Japan’s household spending rose 0.5% in June on a yearly basis
• Japan’s inflation was flat MoM and down 0.7% YoY•
• Japan’s industrial production fell 1.5%.

• EU CPI rose to 1.7% in July
• EU unemployment at 10% in June.

• Italy’s PPI rose 3.4% YoY.
• Italy’s CPI rose 1.7% YoY

• UK’s consumer confidence index fell to -22 in July

• German import price of iron ore increased by 38.9% YoY and was up 18.1 MoM.

• Germany’s wheat harvest, Europe’s second-largest, may fall as much as 8.7% on dry weather and “extremely high” temperatures, Alfred C. Toepfer International GmbH said

• Canada’s GDP rose 0.1%

• Germany’s unemployment rate was 7.6% up 0.1% MoM. A total of 3.192 million people were registered as unemployed.

• The European Union's top court ruled that Anheuser-Busch InBev (AB-InBev) may not register "Budweiser" as a trademark in the bloc, ending a 14-year legal battle over the name with a Czech brewer.

• German retail sales fell 0.9% MoM but rose 3.1% YoY

• YoY Intermodal rail traffic increased 19.2% last week, the Association of American Railroads said.

Quick Overview

• U.S. initial jobless claims dropped by 11,000 in the week ended July 24 from a revised 468,000

• EU economic sentiment indicator for the 16-nation currency area rose to 101.3 in July, a 28-month high, from an upwardly revised 99.0 in June.

• Profits of China's industrial enterprises climbed 71.8% Yoy to hit 1.61 trillion yuan (237.5 billion U.S. dollars) in the first six months, the National Bureau of Statistics (NBS) said

• Exxon's second-quarter income nearly doubled to $7.56 billion.

• Shell’s second-quarter profit rose 94 per cent to $4.53bn

• Total wheat export sales of 919,900 tons for the week ended July 22 topped estimates of 250,000 to 450,000 tons.

• New Zealand hiked its key lending rate by 25 basis points to 3.00%.

• US economic activity has ‘continued to increase’ over the past seven weeks but there are signs of a slowdown, according to the Federal Reserve’s latest Beige Book survey.

• Swedish consumer confidence rose to a 10-year high of 23.3 up from 22.0 MoM

• (Skilling) Chicago area established the city's longest string of consecutive above 80-degree highs since weather records began 140 years ago.

Research says climate change undeniable
Peter Stott, head of climate monitoring at the UK’s Met Office, said the research based on a total of 11 indicators painted a clear picture of all of the earth’s important climate systems: “The fingerprints are clear... The glaringly obvious explanation for this is warming from greenhouse gases

Quick Overview

• Australian consumer prices rose by less than expected. QoQ Australia’s consumer price index rose 0.6%, and 3.1% YoY.

• U.S. durable goods orders fell 1% in June after a revised 0.8 % fall in May, making the decline the largest since last August. Analysts had forecast orders rising.

• German consumer prices rose 1.1%YoY and 0.2 % MoM. 

• The DOE said:
• Supplies of crude oil rose 7.31 million barrels to 360.8 million in the week ended July 23. More Than expected
• Gasoline inventories rose by 100,000 barrels to 222.2 million barrels
• Demand for gasoline rose 2.1 % YoY
• U.S. refineries ran at 90.6% of total capacity.
• Supplies of distillate fuel, which include diesel and heating oil, rose by 900,000 barrels to 167.5 million barrels.

• YoY Chile's industrial output rose 2.9%

• White House budget chief Peter Orszag said it would be "foolish" to cut the U.S. deficit while economic growth was still frail, but it would be equally foolish not to significantly curb the deficit by 2015.

• Russian wheat production estimates are falling daily! Yesterday’s temperature in Moscow was the highest since Russia began keeping records 130 years ago.

• The London Metal Exchange on Wednesday merges its two regional steel futures contracts Mediterranean and Far East to create a global one, aiming to generate more business in Asia, where metals trading is on the rise.

• Containerized imports at the Port of Seattle exploded last month, increasing 93.3 % YoY

• Intel Corporation today announced an important advance in the quest to use light beams to replace the use of electrons to carry data in and around computers. The company has developed a research prototype representing the world's first silicon-based optical data connection with integrated lasers. The link can move data over longer distances and many times faster than today's copper technology; up to 50 gigabits of data per second. This is the equivalent of an entire HD movie being transmitted each second.

Quick Overview

• India raised rates.  Repo rate and reverse repo rate move up to 5.75 percent and 4.5 percent, from 5.5 percent and 4 percent, respectively.

• (Reuters) Russia on Tuesday denied market talk it was restricting grain exports, pulling European wheat prices back from contract highs but not ending concerns about the impact of Russia's worst drought in years.

• (Bloomberg) Corn prices will average about 9 percent more in the first three months of 2011 than they have since July 1 because smaller crops in Europe, Russia and Ukraine will boost demand for U.S. exports to Asia, according to Rabobank Group.

• The Conference Board’s U.S. confidence index fell to 50.4 from a revised 54.3 in June

• Improvement in India’s monsoon showers has given hope for above normal rains in August-September, a weather official said.

• Australia's leading economic Index increased 0.3% and the Coincident Economic Index rose 0.2% in May.

• Japan’s corporate service prices fell 1.0% in June.

• Germany’s import prices rose 0.9% MoM. YoY import price index rose 9.1%

• Germany’s consumer confidence index rose to 3.9 in August, up from a revised 3.6 in July

• (Arlan Suderman) Local reports suggest that up to 20% of Argentina's wheat may go unplanted due to dryness

• DP World said it handled 23.7 million 20-foot equivalent container units at its 50 operating terminals in the first half of 2010, an increase of 16 percent on the same period last year and ahead of the 2008 figure

• YoY the S&P/Case-Shiller index of property values rose 4.6 % in May -- the biggest YoY gain since August 2006

Shipping Bottoming as China Steel Rebound Lifts Ore (Update2)
(Bloomberg) -- The smallest profits in the commodity shipping market in 18 months may be ending as a rebound in steel and iron-ore prices signal improving Chinese demand that will ease the transport glut

Quick Overview

• YoY Japan’s exports rose 27.7% in June. Shipments to Asia, which account for more than half of Japan's total exports, rose 31.7 %.

• South Koreas GDP rose 1.5% QoQ

• The Commerce Department said sales of new U.S. single-family homes jumped 23.6% to a 330,000 unit annual rate from a downwardly revised 267,000 units in May.

• Japan's government needs to weaken the yen and adopt more expansionary monetary policies to beat deflation, according to the leader of a small opposition party which is being seen as a possible government ally

Quick Overview

• Rylko, director of the Institute for Agricultural Market Studies, said it was likely that Russia is going to harvest only 80 million tonnes of grain in 2010, compared with 97 million last year.

• (Mcclatchy Newspapers) The nation's farmers could face severe restrictions on the use of pesticides as environmentalists, spurred by a favorable ruling from a judge in Washington state , want the courts to force federal regulators to protect endangered species from the ill effects of agricultural chemicals.

• The U.S. economy is not likely to slip back into recession but letting tax cuts for the wealthiest Americans expire is necessary to show commitment to cutting budget deficits, Treasury Secretary Timothy Geithner said on Sunday.

• China's port box volumes up 7.3 - 13.9% in first half of 2010

The Death of Paper Money
As they prepare for holiday reading in Tuscany, City bankers are buying up rare copies of an obscure book on the mechanics of Weimar inflation published in 1974.

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• Microsoft (MSFT) and ARM (ARMH) announced that they have signed a new licensing agreement for the ARM(R) architecture

• Adverse weather is slashing production of wheat in Russia and Canada, two of the world’s four-biggest exporters.

• (Reuters) - Seven of 91 European banks have failed stress tests and show an overall capital shortfall of 3.5 billion Euros, the organizers of the tests said on Friday.

• General Electric (GE) is raising its quarterly dividend by 2 cents.

• Russia produced 1.837 million metric tons of refined sugar from imported raws from Jan. 1-July 19, up 25.39%

• Yesterday, Starbucks (SBUX) raised its dividend to 13 cents per share from 10 cents

• Existing-home sales fell by 5.1% to an annual rate of 5.37 million, the
  National Association of Realtors said Thursday

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• (Dow Jones)--Investors' reaction will be negative to Hungary's failure over the weekend to reach a deal with the International Monetary Fund and the European Union that would allow it to draw on the remainder of its existing EUR20 billion IMF/EU standby credit line.

• Wow... the Baltic Dry Index broke a run of 35 straight down days by closing a modest 20 points higher at 1720 on Friday.

• June London Retail sales rose 14.4% YoY.
  
  

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• Japan's Tertiary industry index fell  0.9%  in May.

• MoM The University of Michigan’s consumer confidence index fell to 66.5  from 76

• Ex Fed chief Greenspan thinks Congress should let the tax cuts enacted by  Bush expire for all Americans in order to address the widening deficit.

• MoM the US CPI fell 0.1% -- the third straight monthly decline. However, the annualized rate came in better than expected at 1.1%.

• Citigroup fell 4% to $3.99 after reporting second-quarter profits dropped 38%.

• GE reported a 16% increase in quarterly profit -- ending a streak of nine down quarters.

• Google reported second-quarter profits that missed analysts’ estimates.

• YoY the US cocoa grind rose 12% in Q2 to 117,657 MT

• Assets held in Japan’s first exchange-traded funds backed by gold and other precious metals may increase eight-fold in a year as investors seek to protect their wealth in the country with the world’s biggest public debt -- said Osamu Hoshi, deputy general manager at Mitsubishi Trust and Banking

• U.S. senate passes financial reform bill -- Obama wants to sign it next week.

• India's M3 money supply rose an annual 15.3%, up from 14.5% in June

• China's July soybean imports will be 5.8 million metric tons, up 32% YoY, China's Ministry of Commerce reports Thursday.

• U.S. Lawmakers are considering lowering a tax credit for ethanol blenders from 45¢/gall to 36¢.

• (Reuters) - The world is enduring the hottest year on record, according to a U.S. national weather analysis, causing droughts worldwide and a concern for U.S. farmers counting on another bumper year.
  For the first six months of the year, 2010 has been warmer than the first half of 1998, the previous record holder, by 0.03 degree Fahrenheit, said Jay Lawrimore, chief of climate analysis at the federal National Climatic Data Center.
  
  
  
  

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• US producer prices fell 0.5% in June, signaling a slow economy.

• China's CPI, the country's key inflation gauge, rose 2.9% YoY, but fell 0.6% MoM. The decline from the previous month was mainly due to falling food prices.

• (RealtyTrac) US Banks took control of 269,962 properties in the second quarter, up 5 % from the prior quarter and a 38 % spike from the second quarter of last year -- Repossessions will likely top 1 million this year. From January through June one out of every 17 households in Nevada received a foreclosure notice.

• The Bank of Japan left rates unchanged but raised its economic forecast for the current fiscal year.

• Japan revised June machine tool orders up 139.5%.

• Novartis says Q2 profit up 19%

• Wheat contracts hit a seven-month high as 14 regions of the Russian federation declare a state of emergency, with 11 of them seeing half their sown land destroyed. The ongoing drought in Russia is reported to have "killed 52.3 percent of grain seedlings in the Ulyanovsk region," according to a news report by news agency TASS.
  
  
  
  Overnight weather models are warmer and drier for the Midwest

• (Reuters) - India's monsoon rains, vital for farm output gains after last year's drought, were 24 percent below normal in the past week and unlikely to rebound in the week ahead, the weather office said, raising fears of crop loss..

• Manufacturing in the Philadelphia region cooled to 5.1 this month as orders fell for the first time in a year, signaling the expansion is slowing.

• U.S. industrial output rose 0.1% in June.

• The number of people submitting unemployment insurance benefits fell to 429,000 last week, the lowest level since August 2008

• J.P. Morgan (JPM )said its second-quarter net profit rose 76%

• FG/Agro said Brazil’s’ main center-south is expected to crush 588 million metric tons of cane in the ongoing 2010-11 crop season. This compares to the earlier estimate in March of 595 million MT.

• (Reuters) Drought caused by a hot spell over the past month has hurt rice fields in central Vietnam, with nearly 100,000 hectares (247,100 acres) destroyed or partly destroyed, a state-run newspaper reported on Thursday.

Baltic dries up FOR most of the past two decades the main measure of shipping costs has been used as a guide to what is happening to world trade. So the fact that the Baltic Dry Index—which measures the rates charged for chartering the giant ships that carry coal, iron ore and grain—has fallen by almost 60% in its longest streak of consecutive declines for nine years (34 days running as of July 14th) has won attention.

Quick Overview

• U.S. retail sales fell 0.5% last month, with consumers cutting back for a second straight month.

• U.S. business inventories rose 0.1%, the highest since June, following a 0.4% increase in April.

• Demand for home purchase loans fell to a 13-year low last week, and refinancing demand also slid despite near record-low mortgage rates, the Mortgage Bankers Association said on Wednesday.

• EU area annual inflation was 1.4% in June, down from 1.6% MoM

• EU Industrial output rose by 0.9% MoM and was up 9.4% compared to May 2009

• Brazilian retail sales rose 1.4% MoM

• Australian consumer confidence rose 11.1% during July, compared with a previous reading -5.7% in June.
• Ports in China posted a 19% growth in throughput to 3.18 billion tonnes in the first five months. The container freight volume increased 22.5% to 56.3 million TEU.
  
  The DOE said:

• Supplies of crude oil fell 5.1 million barrels (Analysts had expected a drop of 2.6 million barrels)
• Supplies of gasoline rose 1.6 million barrels
• Supplies of heating oil and diesel rose 2.9 million barrels
• Refineries operated at 90.5% of capacity

• U.S. wheat futures rose to a six-month high on Wednesday, gathering strength from hot, dry weather in Europe that has led to cuts in crop forecasts. Forecasts for wheat crops in Germany and Ukraine were lowered, while drought in Russia and excessive wetness in Canada also point toward smaller crops.

• Corn and soybeans rose to a three-month high on speculation that a heat wave may damage crops in the US

• Goldman Sachs has upped their 3-month price forecast for grains:
  
  GS sees corn reaching $4.15 vs. their previous estimate of $3.75 per bushel.
  
  6-months out, corn prices are seen reaching $4.50 vs. $4.00.
  
  Soybean 3-month outlook seen at $9.75 v. $9.25,
  
  6-month out GS sees prices reaching $9.50 vs. $9.00.
  
  Wheat 3-month outlook is seen at $5.20 v s. $4.75.
  
  6-month out wheat is seen reaching $5.50 vs. $5.00.

• (Bloomberg)Sugar exports from Thailand, the world’s second-biggest shipper, may plunge 20 percent next year as delayed rain lowers yields and increasing domestic consumption slashes export availability, an official body said

• Cocoa hits its highest since September 1977 after data show consumption by European confectioners growing at its fastest in a decade
  

Quick Overview

• Intel reported the best quarter in its history. (FT)

• QoQ Singapre's GDP expanded at a 26% annual pace

• China's leading credit rating agency has stripped America, Britain, Germany and France of their AAA ratings, accusing Anglo-Saxon competitors of ideological bias in favor of the West.

• The Chinese government said it will “strictly enforce” policies enacted to quash real estate speculation -- driving developers and lenders lower.

• U.S. Earnings season starts with strong Alcoa, CSX results. The companies had nothing but good things to say, making it harder to find evidence of this double-dip recession.

• U.S. trade gap unexpectedly widens to $42.3 billion in May, up from $40.3 billion in April

• (Bloomberg) Rubber tumbled for a third day to the lowest level in more than a month on concern that slower car sales growth in China may signal weaker demand, while supplies from Thailand increased.

• (Bloomberg) China, the world’s biggest consumer of vegetable oils, may import about 200,000 metric tons of soybean oil each month from July to September, the portal Grain.gov.cn said in an e-mailed report.

• Japanese consumer confidence improved to 43.5 in June from 42.8 in May, the highest level since September 2007.

• The chief executive of the world's biggest copper producing company, Codelco, says he expects to see continued demand for the metal from China to fuel the country's industrial boom

• (Reuters) - U.S. researchers have created a primitive artificial lung that rats used to breathe for several hours and said on Tuesday it may be a step in the development of new organs grown from a patient's own cells.

Chinese rating agency strips Western nations of AAA status

The US falls to AA, while Britain and France slither down to AA-. Belgium, Spain, Italy are ranked at A- along with Malaysia.

Quick Overview

• Greece cuts deficit by 46% YoY -- beating target

• YoY India’s industrial output rose 11.5% in May

• FO Licht raised World 2010-11 corn output to 804.20M Tons

• FO Licht lowered World 2010-11 wheat output to 656.37M Tons

• (Dow Jones)--Uranium prices could soon be driven higher by the largest Asian atomic expansion in three decades, with China seen buying unprecedented amounts of uranium this year.

• China's June exports exceeded imports by $20.02 billion, up from May’s $19.5 billion trade surplus and April's $1.68 billion surplus.

• U.K services output ffell 0.3 pct in April

• U.K.'s economy grew 0.3% in Q1

• Brazil recorded a trade surplus of US$7.9 billion in the first half of the year, down from US$13.9 billion YoY -- exports rose by 26.5% to $89.2 billion.

• China has replaced the United States as Brazil's top trading partner after Chinese imports rose 57.7% in the first half of the year.

• Malaysia's palm oil stocks fell to a 10-month low, a sign that heat stress to trees may have been more severe than projected.

• (Reuters) - Revived monsoon rains in India accelerated the planting of rice, oilseeds and cotton last week.

Quick Overview

• Google climbed premarket as China renewed its Internet license.
  
  

• The USDA's U.S. 2010-2011 ending stocks estimate for:
  Corn was lowered from 1.573 to 1.373 billion bushels.
  Soybeans were kept at 360 million bushels.
  Wheat was raised from .991 to 1.093 billion bushels.
  Sugar was raised from 764,000 to 952,000 tons.
  Cotton was raised from 2.80 to 3.50 million bales.
  
  

• The USDA's world 2010-2011 ending stocks estimate for:
  Corn was lowered from 147 to 141 million tons. Versus the average analyst estimate of 1.404 billion bushels and the June estimate of 1.603 billion bushels.
  Soybeans were raised from 67 to 68 million tons.
  Wheat was lowered from 194 to 187 million tons.
  Cotton was raised slightly from 49.6 to 49.9 million bales.
  It estimates the 2009-2010 OJ crop unchanged at 134 million boxes -- juice yield was raised from 1.55 to 1.56 gallons
  

• Korea lifted its key policy rate by 25 basis points to 2.25%, its first tightening since August 2008

• (Reuters) - Thailand, the world's No. 2 sugar exporter, will tender to buy sugar for the first time next week in a bid to tackle a domestic shortage.
  The tender on Tuesday will be for the purchase of 100,000 tonnes of white sugar with options of three delivery periods.
  Although Thailand's output typically exceeds consumption by around 4-5 million tonnes, some dealers said many trade houses had committed export sales before the new crop in November .
• India may export at least 1 million metric tons in the year starting Oct. 1, as domestic production jumps 34 percent, said Shree Renuka Sugars Ltd., the country’s biggest refiner.

EMU break-up risks global deflation shock that would dwarf Lehman collapse, warns ING A full-fledged disintegration of the eurozone would trigger the worst economic crisis in modern history, devastate every country in Europe including Germany, and inflict a deflationary shock on the US. There would be no winners, warns the Dutch bank ING in a new report "Quantifying the Unthinkable".

Quick Overview

• U.S. jobless claims fell 21,000 last week to 454,000
  

• The International Monetary Fund upgraded its 2010 global growth forecast from 4.2% to 4.6%. For 2011, they are expecting growth of 4.3%.
  

• Australia’s unemployment rate out at 5.1%. The currency rose on the stronger-than-expected employment data and improving investor confidence.
  

• The EU and the Bank of England both kept interest rates unchanged
  

• U.K.'s manufacturing index rose 0.3% MoM and up 4.3% YoY
  

• During the first five months of this year net imports of coal in China rose to 60.11 million tons from 38.44 million tons last year.
• (NYT) The weather page of the New Beijing News gives lots of helpful advice. But, in one of the most polluted cities in the world, it doesn't mention something really important: how clean is the air?
  

• (Reuters) - The global private banking sector has the potential to grow by 60 percent if it can get hold of about $10 trillion in untapped wealth, held back by depressed returns and lack of investor trust, Scorpio Partnership said.
  

• MoM German exports rose by 9.2 % in May.

• Russia cut its forecast for this year's grain output to 85 million tonnes from 90 million as 14 key growing regions declared a state of emergency due to severe drought.

• (Bloomberg) -- China, the world’s second-largest corn consumer, may give up efforts to be self-sufficient in the commodity and boost imports 10-fold by 2015 to feed livestock, said a researcher at Japan’s biggest grain trader.

TEXT-China spells out gold reserve policy

Finally, increasing the gold reserve will not help much in diversifying China's foreign exchange reserves. In the past few years, we increased the gold reserve by more than 400 tonnes. Our country's gold reserve has already reached 1,054 tonnes. Even if we double the amount, it can only diversify between $30 billion to $40 billion of the foreign exchange reserves, and the proportion of gold reserve in our foreign exchange reserve will only increase by one or two percentage points.

Quick Overview

• GDP in the EU rose 0.2% in Q1 and 0.5% YoY
  

• (Bloomberg) Sugar rose in New York on speculation India, the world’s second-biggest grower, will keep supplies from the world market to meet domestic demand.
  

• (DJ) Depressed iron ore demand from Chinese steel mills has been pressuring shipping rates over the last month, with iron ore a key ingredient in steel production and the main product in dry bulk shipping. Chinese spot iron ore prices are near $US125 per tonne, a steep discount to the all-in cost of having it shipped from Australia, which is at $US155 per tonne.

Quick Overview

• The Institute of Supply Management's index of services fell from 55.4 to 53.8 in June
  

• Australia kept its interest rate unchanged at 4.5%. The Reserve Bank of Australia says that despite recent caution, it is confident about growth in China and the region.
  

• Canada’s building permits fell 10.8% MoM
  

• Retail sales volume in the EU-27 rose 0.4% in May.
  

• 'Very dry conditions' in Thailand may see world's second-ranked sugar exporter suffer a fall of more than 1m tonnes in output in 2010-11, Rabobank.
  

• India's south-west monsoon rains have covered the entire country, about 10 days earlier than the normal date, the country's weather office said.
  

• An area of disturbed weather over the southeastern Gulf of Mexico could strengthen into a tropical storm later this week, the U.S. National Hurricane Center said on Monday.

• MoM global chip sales rose 4.5%

• Greenpeace levelled new accusations of rainforest destruction against Indonesian agribusiness giant Sinar Mas and urged retailers Carrefour and Walmart to stop buying their products.
  

Andy Grove: How America Can Create Jobs Our fundamental economic beliefs, which we have elevated from a conviction based on observation to an unquestioned truism, is that the free market is the best of all economic systems—the freer the better. Our generation has seen the decisive victory of free-market principles over planned economies. So we stick with this belief, largely oblivious to emerging evidence that while free markets beat planned economies, there may be room for a modification that is even better.

Quick Overview

• Rabobank estimates U.S. corn stocks at 9.1% of consumption - the lowest for 15 years.
  

• Rabobank said that Thailand's sugar production could fall by 10-15% in 2010-11 from the previous year's 6.9m tonnes.
  
• The International Sugar Organization says the sugar market outlook suggests a global surplus of around 2.5 million tonnes in 2010/11 after a deficit of 8.5 million tonnes in 2009/10.
  
• India will decide before October on whether to re-impose an import tax on the sweetener to protect the local industry.
  

• Wheat is climbing on concern that hot, dry weather in northwestern Europe and Russia will hurt production

With the US trapped in depression, this really is starting to feel like 1932 Perhaps naively, I still think central banks have the tools to head off disaster. The question is whether they will do so fast enough, or even whether they wish to resist the chorus of 1930s liquidation taking charge of the debate. Last week the Bank for International Settlements called for combined fiscal and monetary tightening, lending its great authority to the forces of debt-deflation and mass unemployment. If even the BIS has lost the plot, God help us.

Quick Overview

• The U.S. lost 125,000 jobs in June as temporary census workers exited the labor force. The private sector added 83,000 jobs. The unemployment rate fell to 9.5%.
  

• U.S. Factory orders fell 1.4% in May
  

• EU unemployment rate stayed at 9.6% in May.
  

• China's GDP rose 9.1% in 2009. Goldman Sachs. cut its growth forecast for China this year to 10.1 % from 11.4 %.
  

• Sugar prices may rise 30 percent this year on increasing demand, low yields and transportation delays for sugar-cane crops in Brazil, said Copersucar SA, a Brazilian cooperative that sells more sugar overseas than Thailand.
  

• Orange-juice gained for the third day in a row on concern that storms may damage the crop in Florida
  

• (Bloomberg) India, the world’s second-largest cotton grower and exporter, will end curbs on overseas sales in the new crop year amid forecasts for a record harvest, said a government official.
  

• Germany's lower house of Parliament approved a watered-down bill banning "naked" short-selling of all stocks and some euro currency derivatives