Grains stocks at record high, exposed to rot - Grains stocks at record high, exposed to rot -

Thursday, June 7, 2012

Grains stocks at record high, exposed to rot -

Grains stocks at record high, exposed to rot -

NEW DELHI (Reuters) - India's wheat inventory at government warehouses surged to a record 50.2 million tonnes on June 1, exposing more stocks to rot as unattractive global prices have hobbled government efforts to export from its overflowing grain bins.

India's entry into the global market could further dent benchmark U.S. wheat prices, which dropped 10 percent last week after much-needed rains hit drought-hit parts of Russia and on higher-than-expected yields from the U.S. winter harvest.

Much of India's grains are left out in the open exposed to potential decay as state-run warehouses can store only 63 million tonnes against the total 82.4 million tonnes of current stocks, which includes some coarse grains such as millets.

While wheat stocks were well above the official target of 4.0 million tonnes for the quarter ending June 30, rice inventory for the same period was 32.1 million tonnes against a target of 12.2 million tonnes, government sources said.

The government aims to add up to 4 million tonnes of storage capacity by the end of June, one government source has said, still leaving a substantial gap.

The government's storage problem has worsened as farmers have just finished harvesting another record wheat crop, forecast to be 90.23 million tonnes in 2012. Demand runs at about 76 million tonnes a year.

India grows only one wheat crop in a year, with planting from September-October and harvests from March.

The government encourages wheat production by fixing a support price as it needs to ensure enough supplies to cover its commitments to feeding the poor, who make up about 40 percent of its 1.2 billion population.

A sharp rise in the price the government pays to buy wheat from local farmers has led to bin-bursting harvests since 2007, exacerbating storage problems in the world's second-biggest wheat producer.

Farm Minister Sharad Pawar, known for his pro-farmer policies, has been a driving force behind higher prices to wheat growers. The government has raised the price it pays to buy wheat by more than 70 percent since 2007.

Brimming granaries forced India to lift a four-year old ban on exports in September but lower global prices have scuppered efforts to trim bulging stocks, forcing the government to store wheat under tarpaulin. Only about 1 million tonnes of wheat has been exported so far.


A top court and the opposition have criticised the government for its inability to store grains as hunger is endemic among the country's 500 million poor.

Ministers are likely to decide soon on exports from vastly swollen government warehouses and whether to subsidise overseas sales to overcome competition from cheaper rivals.

Any subsidy will further widen India's fiscal deficit at a time when Prime Minister Manmohan Singh's coalition government is battling slowing economic growth and poor fiscal management.

Efforts to find other uses for the surplus wheat, including extra allocations to state governments to help the poor, have failed because of the extra cost burden involved.

To make India's wheat competitive, the government needs to provide a subsidy of about $100 a tonne. Indian wheat costs about $350 a tonne free on board against Black Sea wheat which is being offered at about $250 a tonne, traders say.

"It is a Catch-22 situation. For export parity, the government needs to dole out a subsidy of not less than $100," said Rajini Panicker, head of research at MF Global Commodities.

India could easily sell around 2 million tonnes of wheat within a year if the government gives a subsidy for exports, traders said.

The UN's food agency cut its outlook for 2012/13 world wheat output, but said it expects international prices during the period to average lower than in the previous crop year due to a fall in consumption and large export supplies.

Output in leading exporter Australia is expected to come in nearly 4 percent lower than the government's March estimate of 26 million tonnes and more than 15 percent below last year's output, according to a Reuters poll.

"It is not true that everything in Indian storage is rotting," said a Singapore-based trader. "Even if one million tonne has been spoilt across the country, you are still looking at a very large exportable surplus."

On May 24, six companies, including global traders, bid for potential wheat sales from India's stocks to sell overseas at prices between $150-$230 per tonne, prices that might tempt India as it tries to cut its huge stockpiles.

Sanctions-hit Iran may buy wheat from India.

A trade delegation from the Islamic Republic is scheduled to come to India on June 12 to negotiate wheat purchases. But New Delhi and Tehran need to sort out differences over quality.

Iran stopped buying Indian wheat in the mid-90s, suspecting the presence of the fungal disease Karnal-bunt.

The Food Corporation of India, the main state-run grain buyer, buys food stuffs such as wheat and rice from local farmers at a fixed price to protect them from a distress sale, provide cheap grains for the poor and meet any emergency needs.

Last month, stocks of wheat were at 38.2 million tonnes, while those of rice were 32.9 million tonnes.

(Additional reporting by Naveen Thukral in SINGAPORE; Editing by Himani Sarkar)

Kudlow: Why Stocks Love Scott Walker - GOPUSA

You didn't see it in the mainstream financial media Wednesday morning. But stocks loved Gov. Scott Walker's spanking of public-sector unions and Democrats in Wisconsin. The Dow jumped about 165 points right at the opening on Wednesday and was up over 200 points later in the day.

There really was no other news. There was some speculation about central bank stimulus in Europe and the United States. Blah, blah, blah. But there was nothing specific or concrete.

So it's an easy point to make: Markets love the Scott Walker landslide.

Tuesday night on "The Kudlow Report," two investment gurus predicted a bullish market if Walker won. Art Hogan of Lazard Capital and Mike Ozanian of Forbes both forecasted a Walker rally. And that's just what we got Wednesday morning.

The logic? Well, mainly, a big Walker win opens the door to a Wisconsin victory for Mitt Romney this fall. Think of Walker as the leading indicator for November.

Noteworthy in the Walker victory was a huge GOP get-out-the-vote ground game, set up by Reince Priebus, the Wisconsin native and Republican National Committee chairman. Priebus said he was confident that the superior ground game will be there in November for Romney. And if Romney takes Wisconsin, it could be Katy bar the door for a national GOP landslide.

But the other bullish point is that stock market investors prefer low taxes to high entitlement spending. The grassroots taxpayer tea party revolt that carried Scott Walker to victory is alive and well around the country. (By the way, in California, San Diego and San Jose just voted in government-union pension cuts.)

Collective-bargaining restraint, higher copays for pension and health care benefits, and an end to mandatory dues-paying for Big Labor's political slush funds are all bullish policies that come out of the Scott Walker win. So is a huge drop in government-union membership in Wisconsin.

Public-sector unions are in retreat.

The stock market is a gauge of future economic growth. Balanced budgets without income-tax hikes in Wisconsin, plus lower property taxes as a result of Walker's leadership in curbing government-union excesses, is a national message for economic growth.

And at the national level it seems clear that Romney gets all this. He gets smaller government, Social Security and Medicare reform without tax hikes, and quite possibly pro-growth tax reform. In other words, Romney understands the game-changing nature of the Walker victory.

Remember this: Stock owners who make up the massive investor class -- roughly 100 million people -- are among those most likely to vote in the November election. That's what history shows. So a union-rollback, low-tax, limited-government, pro-growth message is just what the investor class wants. That is a Romney message, not an Obama one.

Romney is almost universally regarded as the market-friendly, pro-business candidate. He got a big leg up Tuesday night with Walker's dramatic win. That's why stocks surged on Wednesday.



STOCKS NEWS EUROPE-Wait for new down leg before rebound - SG - Reuters UK

Thu Jun 7, 2012 11:14am BST

Societe Generale recommends waiting for new declines in share prices before positioning for a rebound, which may be triggered by new monetary stimulus or positive political developments in the euro zone, the bank says.

Four straight sessions of gains, fuelled by expectations of forthcoming policy action, have helped European shares more than recover the ground lost on Friday, when weak economic data sent stocks to a six-month low.

Soc Gen says equites likely face new losses in the near future, but warns a monetary policy intervention, progress towards a European banking union, a victory of moderate parties at elections in Greece and signs of economic recovery could trigger a rebound.

"We expect the downside in risk assets to continue to materialise in the coming weeks," he bank says in a note. "But when and if one of our four triggers kick in...we would recommend positioning asset allocation strategies for a rebound."

In this scenario, the bank highlights "high beta assets", which tend to offer higher returns than the broader market during rallies and fall more sharply during corrections, such as bank equities and commodities.

British miner Kazakhmys offered the highest beta among stocks listed in the FTSEurofirst 300 index at 2.94, which means its returns would be nearly three times as high the ones offered by market if there is a rally.

Lenders Royal Bank of Scotland, Barclays and KBC offered betas of between 2.6 and 2.2, Thomson Reuters data shows.

Reuters messaging rm://

Money looming even larger over Nov. election - CBS News

(CBS News) WASHINGTON -- President Obama is halfway through a two-day fundraising swing through California.

His trip underlines the importance of money in the 2012 campaign.

It's also being criticized by Republicans who say the president is spending too much time with celebrity Democrats.

The money-raising trip took him to San Francisco and Los Angeles, two towns where he hasn't been a stranger in recent weeks and months, spending plenty of time with the wealthy and famous in the entertainment and tech communities.

But his campaign tweeted Thursday that 98 percent of its donations in May were less than $250.

Either way, it's all about the money.

Mr. Obama got a warm welcome from campaign donors in the Los Angeles gay community Wednesday night, a group he considers crucial to his re-election prospects.

"I could not be prouder of the work we've done on behalf of the LGBT community," Mr. Obama said.

Full coverage: Election 2012

During his speech, he ticked off accomplishments under his watch, such as ending the war in Iraq.

But he also warned the audience about what's ahead during the campaign, and why their donations matter, saying, "You're going to see hundreds of millions of dollars in negative ads, because the other side's not offering anything new."

To build a war chest that would enable him to counter those ads and run his campaign, Mr. Obama is spending two days on the West Coast to raise an expected $5 million.

He will have done 153 fundraisers since formally declaring his candidacy for re-election a little over a year ago - nearly double the number President Bush had done at the same point in 2004.

With the majority of outside super PAC dollars going to Republicans, raising money will be crucially important for Democrats in this election cycle.

In the Wisconsin recall election, unions spearheaded the effort to unseat Gov. Scott Walker after he successfully limited their power. But the union effort to get out the vote was overcome by the GOP advantage in money and TV advertising. Walker raised $30 million. His challenger, Milwaukee Mayor Tom Barrett, raised only $4 million.

Rep. Steve Israel, D-N.Y., chair of the Democrats' campaign committee, warned that the Wisconsin results should be "a wake-up call" that the party needs money for TV ads to compete with the super PACs.

A California political power broker once put it this way: "Money is the mothers' milk of politics."

Four years ago, candidate Obama outspent his Republican opponent, Sen. John McCain by more than two-to-one - $730 million to $333 million.

Airport fuel stocks back to normal - The Guardian

Production problems at its supplier meant the airport temporarily did not have enough aviation fuel on Wednesday.

Fears were voiced that it could prompt a string of flight cancellations and delays if stocks were not replenished.

The supply from the Essar refinery near Ellesmere Port was interrupted though for just 15 minutes after running out at 5.15pm.

A total of three million litres of fuel was supplied overnight to the airport's fuel storage facility and meant operations returned to normal at 8.30am, the airport said.

Thirteen flights were delayed because of the glitch, with 12 waiting for less than 30 minutes, while 17 departure flights also made a short stop at other UK airports to top up fuel before completing the onward journey.

Chris Formby, operations director at Manchester Airport, said: "Although we initially warned about the potential for some cancellations and diversions based on the information from the fuel companies yesterday afternoon, disruption to passengers has been kept to an absolute minimum thanks to the airlines and the Essar refinery.

"On behalf of the thousands of passengers travelling today and last night, we would like to thank our airline partners for the huge effort they put into contingency planning to mitigate the highly unusual problem with the fuel supply.

"Although it was only a relatively small number of people affected, we are also grateful to those passengers who were delayed this morning for their patience and understanding." He added a review into the incident would take place.

The airport uses around three million litres of aviation fuel per day. This is the equivalent of 79 road tankers, which carry approximately 38,000 litres per vehicle. The fuel supply comes from the refinery via a pipeline which is capable of pumping 250,000 litres an hour.

Copyright (c) Press Association Ltd. 2012, All Rights Reserved.

Money Mission: Build a money machine - Jamaica Observer

Wouldn't it be wonderful if you could design a machine that can generate cash every hour of the day? Whether you were eating, playing or sleeping, this device would ensure that you were consistently supplied with a steady stream of income. Your money problems would be history and the lifestyle of the financially free would be yours forever.

While many of us would love to possess a magic money machine, this apparatus would probably be impossible to build, and it would definitely be illegal. However, the concept of creating an income source that could eventually produce earnings without your personal effort is something that is entirely in your power to achieve.

Do you have to work to earn?

Most of us have grown up with the idea that the only way to earn money was to physically work for it. We were taught in school to study hard, get good grades and look for a nice job with attractive fringe benefits. For the most part, our education system does not foster entrepreneurial thinking which focuses on teaching people how to create income-generating systems.

Creating a system that will produce income requires us to think differently about how we earn. Most employees and self-employed people are paid for their time and physical effort; to get an income they have to carry out some activity. This type of earning is called linear income, which requires the work output to be constantly repeated in order to make more money.

How can you get paid for something that doesn't always demand your time and effort? The answer lies in understanding how to create passive income sources, which are not dependent on your direct involvement to produce your earnings. While you would initially have to work at building this 'money machine', it will eventually generate income without your physical efforts.

How to earn while you sleep

The simplest form of passive income is portfolio income, which is derived from investments that generate earnings. These include stocks that provide dividends, bonds and money market instruments that pay interest, and real estate that supplies rental income. However, it can take many years for you to build a large enough asset base to generate a meaningful income.

Another way to earn passively is to build a money machine that brings in residual income. Residual income is generated when your initial work output is designed to pay you over and over again. For example, if you create a product such as an eBook, music score or an application for a smartphone, you can sell your work repeatedly without having to produce it from scratch again.

Building a money machine that utilises other people's work effort to generate income is another means of creating passive earnings. This is known as leveraged income, which involves working along with other people in order to increase your final work output. Business owners generally make use of leverage when they hire employees to carry out various tasks.

Turn-key money machines

You don't have to start your own traditional enterprise to earn from leveraged income. There are direct selling companies that allow individuals to become independent representatives to distribute their goods and build networks of other business owners. The networking organisation will reward business builders with a percentage of the revenue generated by their teams' efforts.

We are living in the age of technology, which makes it easier for everyone to earn passively. Even if you don't have the financial means to amass assets which generate portfolio income, or the technical know-how and talent to create a product for sale, or the time and resources to build a business, you can still seek to earn passive income online.

One Web-based option is called affiliate marketing. Online businesses, such as, encourage persons to sign up as affiliates and market their products and services. Anyone with a simple website can promote these offerings and receive a commission on sales. You would have to use creative marketing techniques which encourage persons to purchase your affiliate products.

Start the building process

Lasting freedom from financial stress will come when you find a way to build a passive 'money machine' of your own. Your mission for this month is to learn more about the concept of passive income. You can find several articles on this topic on and other websites.

Consider different ways in which you can generate passive income. Start by saving and investing as much as possible to build your portfolio income sources. Do you have any talents or ideas that can be packaged into a product that can be sold repeatedly? Look at ready-made business opportunities in network marketing or become an affiliate for someone else's online business.

Don't be afraid to attempt something new in your search for passive income opportunities. Carefully research all options to ensure that they are legitimate, and don't give out sensitive financial information online. Over time, you could build a money machine that gives you the ability to live the life of your dreams.

Cherryl is a money coach, business mentor, and founder of Financially S.M.A.R.T. Services. Her upcoming book The 3 Ms of Money will reveal all the secrets she learned about financial success. Get more advice on money and business matters at and Email comments to

NASDAQ to set aside $40million in 'mea culpa money' to compensate brokers in botched Facebook IPO - Daily Mail

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Nasdaq said Wednesday afternoon that it would hand out $40million in cash and credit to reimburse investment firms that lost money on Facebook's opening day because of computer glitches at the exchange. Nasdaq's chief rival, the New York Stock Exchange ...

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