Total grain harvest is estimated to be lower by 31%. According to the Australian Bureau of Agricultural Resources and Economics, October harvesting season is expected to yield 25.6 million metric tons compared to the June estimate of 37 million tons and last year's drought-ravaged crop of 15.7 million tons.

Wheat futures jumped sharply to near record level as demand exceed supply and inventories head for a 26- year low.

Barley production was expected to come to 5.9 million tons, down from the June forecast of 9 million while Canola output may be 1.1 million tons, down from a 1.4 million tons estimate. Australia is the world's third-largest canola exporter after Canada and Ukraine.

Of the ASX 200 index shares, Sino Gold Mining led the stocks with a gain of 7.20% followed by increases in AWB Ltd of 5.28%, in Newcrest mining of 4.53%, in Paladin Resource of 2.4%, and Iress Market Technology of 2.33%.

Of the ASX 200 index stocks, Commander Communications declined with a fall of 5.56% followed by losses in Compass Resource of 5.57%, in MFS Ltd of 5.58%, in Bradken of 5.74%, and in Adelaide Bank Ltd of 6.99%.


9:00AM New York – Stock index futures indicate higher opening after Lehman reported only 3% drop in earnings.

Investors were relieved after the Lehman Brothers earnings report. Worried investors feared that deepening mortgage market crisis could hurt earnings at brokerage companies and were ready for a sharp drop in earnings. Just a day ago E*Trade had cautioned the market that earnings may decline as much as 31%.

Lehman Brothers (LEH: chart) reported third quarter earnings of $1.54 per share beating the estimate of $1.47 on rising fees from equity offering business. The earnings of $887 million in the quarter were 3% lower than $916 million a year ago.

Revenue from bond markets trading fell 47% to $1.06 billion but in the investment banking increased 48% to $1.07 billion. International revenue was 53% of total revenue. Asset management and brokerage fees increased 33% to $802 million. The diversified revenue across various banking services and in different geographic regions helped Lehman in mitigating losses from the mortgage market meltdown.

Best Buy (BBY: chart) earnings jumped 8.7% on 15% rise in revenue. The stock jumped 5% in the pre-market trading.

Indexes in Europe and New York rallied after the earnings from Lehman Brothers. Nervous investors put asides worries that the brokerage companies may report sharply lower earnings.

On the economic front, August producer price index fell 1.4% followed by 0.6% rise in July. The core index of prices, excluding energy and food, rose 0.2% after adding o.1% in July.


8:00AM New York, 8:00PM Hong Kong – Asian stocks fell on rising oil price and declining banks.

Asian markets fell dragged lower by financial and real estate stocks. Japan led the region with a loss of 2% followed by declines of 1.8% in Korea, 1.5% in Taiwan, and 1.2% in Australia. India bucked the trend and jumped 1.1% and the led the region’s gainers. Singapore edged a fraction higher.

In Hong Kong trading energy stocks closed higher on record oil price. PetroChina gained 0.9% and Cnooc added 3.3%. Ahead of rate decision in the U.S. property stocks in Hong Kong fell. Wharf Holdings Ltd led the sector with a loss of 4% followed by 3% decline in Henderson Land, and 2.5% loss in Hang Lung properties.

In Shanghai trading banks led the decliners. China Merchants Bank fell 2% and ICBC edged 0.21% lower. Separately Bloomberg News is reporting that the bank has raised Rmb58 billion or $7.8 billion on the sale of 9 billion shares at Rmb6.45, top end of its offer price. The second largest bank is offering stocks in Shanghai to take advantage of investors’ appetite. The bank offering was oversubscribed by forty times.

In Sydney trading National Australian Bank led the decliners with a loss of 3%. Australian Bureau of Agricultural and Resource Economics lowered its production target for the upcoming harvesting season for wheat, canola, and barely by 31% to 25.6 million tons from June estimate of 37 million tons. Wheat production target was lowered to 15.5 million tons.

The Reserve Bank of Australia governor suggested that the local interest rate environment may toughen for borrowers. The comments put bond market on the edge and Australian dollar fell. Australian dollar dropped to U.S. 83.20 cents and 10-year bond yields on the bonds fell to 5.93%