Gold is the final refuge against universal currency debasement
So we have an early 1930s world where surplus states are hoarding money, instead of recycling it. A solution of sorts in the Great Depression was for each deficit country to devalue, breaking out of the trap (then enforced by the Gold Standard). This turned the deflation tables on the surplus powers – France and the US from 1929-1931 – forcing them to reflate as well (the US in 1933) or collapse (France in 1936). Contrary to myth, beggar-thy-neighbour policy was the global cure.

Quick Overview

• U.S. Durable goods for August fell 1.3%, the largest decline in a year, but excluding transportation orders, new orders rose 2%.

• The ICG cut its global rice production forecast for 2010-11 by 1.9 million tons to 453.7 million metric tons due to lower-than-expected production in Indonesia and China.

• National Australia Bank upgraded its wheat production forecast for this crop year to 23.1 million metric tons from a 22.2 million-ton estimate. The figure remains below the official estimate of 25.1m tonnes announced last week.

• France's GDP grew 0.7 %in Q2

• The unemployment rate in Brazil dropped to 6.7 % in August, compared to 8.1% in the same period last year.

• Drought in Brazil has pushed water levels in the Amazon River to the lowest since 1963, according to the National Water Agency.

• (Bloomberg) -- Half of Russian winter-grain plantings, already almost a third lower than last year, failed to sprout or are thin, the national Grain Producers’ Union said.

• German Ifo business climate index rose to its highest level in more than three years

Quick Overview

• The IGC cut by 5m tonnes, to 824m tonnes, its forecast for the global corn harvest in 2010-11.The IGC raised by 4m tonnes to 12m tonnes its forecast for the shortfall in corn production.
• The IGC raised by 1m tonnes, to 13m tonnes, its estimate of the shortfall in wheat production.

• YoY Colombia’s economy grew 4.5% in Q2

• EU consumer confidence in the 27-nation bloc stood at minus 11.8 in September, lower than minus 11.2 in August.

• U.S. sales of existing single-family homes and condos rose 7.6% in August to 4.13 million, the National Association of Realtors reported Thursday.

• The U.S. Conference Board said its leading economic index -- a composite gauge of ten indicators including weekly jobless claims, stock prices and the money supply -- rose 0.3% in August, after a 0.1% increase in July.

• Weekly U.S. jobless claims rose 12,000 to 465,000

• McDonald's boosts quarterly dividend by 11%

• India’s farm minister came out against the government’s proposed limits on cotton exports.

• (Bloomberg) -- Commodities have a “constructive” outlook, with supply constraints set to become a more dominant theme in the fourth quarter, Barclays Capital said. Demand for coal, aluminum, coffee, copper, crude oil, corn, sugar and soybeans probably will climb to a record this year, analyst Kevin Norrish said.

Quick Overview

• YoY U.S. House prices fell 3.3 % in July, the eighth consecutive decline, as foreclosed properties flooded the market, the Federal Housing Finance Agency in Washington said yesterday

• (Bloomberg) -- Microsoft Corp. raised its quarterly dividend by 3 cents, or 23 percent, to 16 cents a share and got approval from its board to sell as much as $6 billion in additional debt.

• MoM Industrial new orders in the euro zone dropped by 2.4% July.

• The U.S. Fed is more concerned with the pace of economic recovery and is "prepared" to take further steps (printing) to stimulate the economy if needed -- gold hits record.

• The U.S. DOE said:
• Supplies of crude rose 970,000 barrels to 358.3 million last week. This against analyst expectations for a drop of 1.7 million barrels
• Supplies of gasoline rose 1.59 million barrels to 226.1 million
• Supplies of distillate fuel, a category that includes heating oil and diesel, rose 347,000 barrels to 174.9 million.

• China consumed an estimated 35.54 million metric tons of oil in August, up 7.6% YoY

• Orders for new ships increased 17% YoY to 1.96 million gross tons in the January-June period

No update today

Quick Overview

• (Bloomberg) -- Record-low interest rates are stoking the biggest increase in U.S. share buybacks ever.

• John Bird, chief operating officer of sugar marketing body Queensland Sugar Limited, says "It's probably more panic buying by end users of sugar.. by refineries throughout the world,"A lot of refineries throughout the world who are reliant on supply out of Brazil have been very disappointed. "Some refineries have actually run out of sugar... which is not a good situation to be in."

• July values for U.S. beef and pork exports dipped slightly from the totals achieved in June, but both exceeded year-ago levels with beef posting close to a 40 percent jump over 2009 levels.

• China soybean, corn futures on Dalian Commodity Exchange sharply higher on concerns over possible early frost in northern China.

Quick Overview

• Weather forecasts refer to a "widespread crop ending hard freeze" across Northern Alberta southeastward to Central Saskatchewan with the mercury falling to 19-28F. A second hard freeze is forecast to push into the Dakotas on Saturday.
• Plus reports of frost in northern China potentially damaging corn.
• Tightening US supplies may extend corn's rally, Goldman Sachs says.

• U.S. CPI rose 0.3% in August.

• U.S. consumer sentiment fell in September to 66.6 -- the lowest level since August 2009

Quick Overview

• Brazil's drought has lowered the Amazon water level to its lowest in 47 years.
  
  
• Australia's Bureau of Meteorology reported Wednesday that indicators of a La Nina climate event in the Pacific have strengthened, with most computer models predicting it will persist into early 2011.

• Argentina made its first forecast for 2010-11 wheat production, estimating the crop at 10 million to 11.2 million metric tons. That's lower than the 12 million tons forecast by the U.S. Department of Agriculture. The USDA estimated Argentina's wheat crop last season at 9.6 million tons.

• The lineup of vessels expected to load sugar at Brazilian ports in the coming weeks rose by 62 in the week ended Wednesday to 100 ships, according to the Williams Brazil shipping agency.

• The U.S. balance of payments deficit, widened to $123.3 billion or 3.4% of GDP.

• The Philadelphia Fed's manufacturing index was -0.7 in September, up from the -7.7 reading in August.

• U.S. new jobless claims fell 3,000 to two-month low

• U.S. Producer prices rose 0.4%, largest gain in 5 months.

Quick Overview

• The Japanese government intervened in the forex market Wednesday for the first time in more than six years -- selling yen to curb the currency's strength

• Agronomists in coffee regions from near northern Sao Paulo to robusta-growing Espirito Santo said they were worried the drought could deal a blow to the crop if the rains, which usually return in late September, did not arrive soon.

• In the latest sign of trade curbs Belarus has banned exports to Europe of rapeseed oil

• YoY Peru's July GDP rose 9.05%

• U.S.  Industrial output rose 0.2 % after a 0.6% gain in July that was smaller than previously estimated.

• New Delhi, Sep 15, 2010: With the monsoon active all over India, there is no let up in the causalities resulting from H1N1 influenza virus attack. According to the latest release by the Indian Ministry of Health & Family Welfare, the lab confirmed cases reported during the week of Sep 6-12, 2010 are 1011; with 75 deaths reported during the same period.

• Israel’s industrial output rose by 14% YoY

• China's crude oil imports were 20.9 million tons or 4.94 million barrels per day in August, up from the 19 million tons in July or 18.47 million tons in the same month last year.

• Eurozoe inflation rate  at 1.6 percent in August.

• The unemployment rate in Britain for the three months to July declined by 0.1 % to 7.8 %

• A total of 18,541 new and resale houses and condos closed escrow last month in Los Angeles, Riverside, San Diego, Ventura, and San Bernardino and Orange counties. That was down 2.1 % from 18,946 sales in July, and down 13.8% from 21,502 sales in August 2009

• Warren Buffett ruled out a second recession in the U.S. and said businesses owned by his Berkshire Hathaway Inc. are growing. “I am a huge bull on this country,” ..

• (FT) AngloGold Ashanti, the world’s third-biggest gold miner, will wind up its hedge book by early 2011, joining Barrick Gold, the industry’s leader, in putting an end to the legacy of forward sales which pre-dates the boom in gold prices.

• GFMS  said central banks would buy about 15 tonnes of bullion on a net basis this year, a situation last seen in 1988.

• YoY combined imports into the ports of Los Angeles and Long Beach grew 23.9% August

Quick Overview

• Disappointing results from the early corn harvest in Illinois are not likely to improve as farmers continue gathering the crop. That's the word from Emerson Nafziger, extension agronomist at the University of Illinois at Urbana-Champaign.

• Continued dry conditions in Brazil  lifted sugar to fresh 6 1/2-month high, with the lack of moisture a concern for the sugar market.

• (Bloomberg) -- Stocks rose for a fifth day, the longest streak for the Standard & Poor’s 500 Index since July, while gold surged to a record and Treasuries gained on speculation the Federal Reserve will purchase as much as $1 trillion in bonds to bolster the economy.

• Yum Brands (YUM) will raise its quarterly dividend 19%.

• Cisco Systems (CSCO) announced it will initiate a dividend in its fiscal 2011, with yields of 1% to 2%.

• UBS predicts a 25 basis point rise in Swiss interest rates.

• U.S. businesses inventories rose 1.0% in July, The inventory-to-sales ratio, remained at 1.26.

• Give the wealthiest Americans a tax cut and history suggests they will save the money rather than spend it. ...Moody’s says.

• U.S. Retail sales rose 0.4% excluding autos. Core retail sales, which strip out autos, gasoline and building materials, rose 0.6% in August.

• YoY industrial production in the Eurozone rose 7.1 %.

• Indian inflation continued to slow to 8.51 percent in August from 9.78 percent in July.

The Basel Committee rules Yet the real show of generosity from the committee was in the timing of the new regime. Banks will have until January 2019 before they have to meet the new targets in full.

Quick Overview

• Global banking regulators in Basel, Switzerland have reached a deal on key parts of a major capital reform package, increasing the key capital ratio for the world’s banks to 7%.

• Container volume through Hong Kong rose 9.7 percent in July after growing by double digits in each of the year's first six months, the Hong Kong Port Development Council reported.

• China's industrial value-added output growth accelerated to 13.9% YoY in August from July's 13.4 % growth.
• China’s retail sales growth accelerated to 18.4% in August.
• Chinas exports grew 34.4 % YoY in August, slowing from July's 38.1, while imports rose 35.2 % in August, sharply up from the 22.7% in July
• China's broad money supply (M2) rose 19.2% YoY by the end of August, up 1.6% from July.
• YoY Chinas CPI rose 3.5% in August, the second consecutive month the CPI has exceeded the government's full-year target of 3 percent. Food prices, which have about a one-third weighting in the calculation of the CPI, rose 7.5% YoY. This is up from the 6.8% rise in July and 5.7% growth in June.

• The Indian Shipping Ministry said it plans to augment the country's overall port capacity from the current 1 billion tons to 3.5 billion tons over the next 10 years

• Japan and India reached a bilateral free trade agreement in Tokyo on Thursday. The pact will eliminate import tariffs on most products traded between the two giant Asian economies within 10 years.

• YoY Spaish home sales rose 16.4%

Quick Overview

• Inventories at U.S. wholesalers rose 1.3% in July

• QoQ Italy's gross domestic product grew by 0.5% in Q2 and by 1.3% % YoY

• The Consumer Price Index in Spain rose by 0.3% in August

• The Brazilian industrial earnings increased 11.4% in the first seven months of 2010

• Japan's GDP increased a revised 0.4 percent in April-June from the previous quarter

• The USDA's estmates:
• Corn production at 13.160 billion bushels
• Corn yield at 162.5 vs. the trade's guess of 163.1 bu. per acre
• U.S. corn ending stocks at 1.116 billion bushels vs. the trade's guess of 1.125 billion bushels for 2010-11
• Soybean production at 3.483 billion bushels
• Soybean yield at 44.7 vs. the trade's guess of 43.8 bu. per acre.
• U.S. soybean end stocks at 350 vs. the trade's guess of 304 million bushels
• Wheat ending stocks 902 mln bu, downn 50 mln from Aug.

• Bangladesh has became the latest nation to increase its official reserves of gold, buying 10 tonnes of the stuff

• Canada's August jobless rate out at 8.1%

Quick Overview

• New claims for U.S. unemployment insurance dropped by 27,000 to 451,000 -- more than expected, to their lowest level in two months

• The U.S. trade deficit shrank by 14 %, more than forecast in July as exports shot to their highest level since August 2008, painting a rosier picture for economic growth.

• Russia may follow up its ban on grain exports with curbs on shipments of rapeseed and sunflower seed and oil.

• MoM U.S. cocoa bean imports rose 90.9% in July, but fell 13.9% YoY.

• Stanford researchers have developed a water-purifying filter that makes the process more than 80,000 times faster than existing filters. The key is coating the filter fabric – ordinary cotton – with nanotubes and silver nanowires, then electrifying it. The filter uses very little power, has no moving parts and could be used throughout the developing world.

• Russia's GDP rose 4.2% in the first half of 2010 to 20.7 trillion rubles (about 670.6 billion U.S. dollars)

• Home sales in Spain rose 24.7% in Q2 from a year earlier

• Malaysia's Industrial Production Index in July increased 3.2 YoY

• Brazil: According to the nationwide household survey by Brazilian Institute of Geography and Statistics, the access to basic services has increased from 2004 to 2009.
• In 2004 only 50 million households had access to electric lighting. The number grew to 57.9 million in 2009.
• Waste collection reached 51.9 million households in 2009, up from 43.7 million in 2004.
• Water supply by a general network climbed to 49.5 million households in 2009 from 42.4 million in 2004.
• Workers' income increased 2.2 percent between 2008 and 2009, but failed to reach the level of 1996.
• The survey also showed negative figures, mostly due to the financial crisis. The unemployed surged from 7.1 million in 2008 to 8.4 million in 2009, up 18.5 percent.

• Private-sector analysts believe that China's official corn production estimate of 6.6 billion bushels is about 400 million bushels too high.

Quick Overview

• Stocks are helped today by a successful Portuguese debt offering easing risk aversion.

• Canada nudged its overnight rate target up 0.25% to 1%

• The Czech unemployment rate fell to 8.6% in August from 8.7% in July

• YoY Czech Q2 GDP rose2.4%

• YoY Hungary’s Industrial Output rose 9.0% in July

• Hungary will launch a flat 16% personal income tax next year

• Japan Finance Minister Yoshihiko Noda was the latest official to warn markets that Japan was ready to act, specifically raising the specter of intervention for the first time."We will take decisive steps--which of course include intervention--when it becomes necessary," Noda said.

• Japanese machinery orders rose 8.8% from June, when they increased 1.6%

• German July current account surplus out at EUR9.0B vs EUR10.6B in July 09

• German July trade surplus out at EUR13.5 B vs EUR14.3 B in July 09

• UK manufacturing output rose for a third straight month in July, growing 0.3% from June--the same monthly rate as in the two previous months. In annual terms output rose 4.9%

China’s young officers and the 1930s syndrome
“China’s military spending is growing so fast that it has overtaken strategy,” said Professor Huang Jing from the Lee Kwan Yew School of Public Policy in Singapore. (He kindly let me quote his remarks.)
“The young officers are taking control of strategy and it is like young officers in Japan in the 1930s. They are thinking what they can do, not what they should do. This is very dangerous.

Quick Overview

• Fresh worries about European banks sent stocks lower early Tuesday. The euro slid broadly and the yen hit a 15-year high.

• Obama will announce a six-year infrastructure revamp plan with an initial investment of $50 billion.

• The Association of American Railroads reported weekly rail traffic continues to set records with U.S. railroads posting their highest numbers for 2010 in both rail carloads and intermodal volume for the week ending Aug. 28, 2010.

• The EU finance ministers agreed on Tuesday to introduce a six-month period to monitor budgetary and structural polices of member states in a bid to strengthen economic governance of the 27-member bloc.

• Turkey's industrial production index rose 8.6% YoY.

• China agreed last month to lend Russia about $6 billion in exchange for increased coal supplies over the next quarter century, the Russian energy ministry said.

• A government spokesman said Pakistan may need 500,000 tonnes of sugar to meet growing demand at a time when its own cane crop has been devastated by floods.

• India's farm minister said the country's sugar production may come in at 22m tonnes in 2010-11, an estimate below consensus.

Quick Overview

• Private U.S. payrolls that exclude government jobs increased 67,000, after a revised 107,000 increase in July, Labor Department figures showed today. The unemployment rate edged up to 9.6% last month. The rise in the jobless rate reflected an increase in the labor force as some discouraged workers resumed the hunt for jobs.

• Informa projected the final U.S. corn yield would be 3.9% below the USDA's most recent estimate.

Quick Overview

• Pending U.S. home resale’s rose 5.2% after a revised 2.8% drop the previous month.

• U.S. first-time claims for unemployment benefits fell by 6,000 to 472,000 in the week ended Aug. 28.

• EU PPI rose by 0.2% MoM

• YoY EU GDP grew 1% in Q2

• Putin extended Russia's ban on wheat exports until next year's harvest to ensure it has bounced back from a severe drought and wildfires that destroyed 20 percent of the crop this year.

• Sweden raised the repo rate by 0.25% to 0.75 %

• Brazilian mills will produce 38.2 million metric tons of sugar this year, less than the 38.7 million tons estimated on April 29, Conab said.

• Sugar beet tests in Russia showed levels at 16.6%, 1 point higher than last year, but beet weights one-third lower at 292 grams.

• The sugar content of the French beet crop is currently at 15.8%, down from 17% in August.

• The International Cotton Advisory Committee cut by 700,000 tonnes to 9.8m tonnes its forecast for world cotton stocks at the end of 2010-11.

Obama was too cautious in fearful times

Panglossians who believe the private economy is always in equilibrium, unless governments intervene, disagree. I wish there were some way to run this experiment without hurting hundreds of millions of people. But I find the idea that allowing the collapse of much of the financial system, avoiding unconventional monetary policy and struggling to close the fiscal deficit would have been consistent with a more rapid and sustained recovery quite bizarre

Quick Overview

• China’s PMI rose to 51.7 in August from 51.2 in July.

• The Institute for Supply Management’s factory index rose to 56.3 from 55.5 in July

• Kingsman cut by 32% to 3.52m tonnes its forecast for the global sugar surplus in 2010-11.

• Vietnam's fiscal deficit hit 2.05 billion U.S. dollars.

• Thailand GDP growth for the first half of 2010 is about 10 %, the highest since 1995

• Indonesia's inflation rate in August reached 6.44 % up from 6.22 % in July.

• Brazil’s industrial production in July was up 0.4% Mom and up 8.7 % YoY.

• Canada's GDP expanded at an annualized pace of 2 % from April through June

• GM's August sales dipped 7% MoM

• MoM Peru's CPI rose 0.27% in August

• Chrysler August U.S. auto sales improved 6.9%. YoY Ford's sales fell 11%. GM's sales fell 25% YoY

• McKinsey Global Institute shows that Africa is now among the fastest-growing economic regions in the world.Africa's collective gross domestic product rose at a 4.9 % from 2000 through 2008, twice the pace of the preceding two decades.

Quick Overview

• U.S. Consumer confidence rose to 53.5 in August from a revised 51.0 in July

• The Standard & Poor's/Case-Shiller Home Price Indices, show the U.S. national home price index rose 4.4 % in Q2 , after having fallen 2.8% in Q1. Nationally, home prices are up 3.6% YoY.

• The Chicago purchasing managers' index fell to 56.7% from 62.3% in July

• Jobless rate in the Eurozone remained at 10% in July.

• Annual inflation in the Eurozone dropped slightly to 1.6% in August

• YoY average monthly wages at Japanese companies with at least five employees rose 1.3% in July

• YoY Japan's retail sales rose 3.9 % in July

• India saw 8.8% YoY GDP growth in the quarter ending June 30.

• South Korea's industrial output expanded for the 13th consecutive month in July by 15.5%

• ABN Amro analysts said Brazil, the world's top arabica producer, could "see much less rainfall" next year than is needed for the good development of the 2011-12 crop if this La Nina weather phenomenon proves a significant one

• Chile, the world's No. 1 copper producer, said its output of the red metal rose 6.3% YoY

No update today

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