Wheat Prices Extend Rally in Asia on Russia's Ban

This is a transcript of top stories presented by China's CCTV Business Channel as produced by CNBC Asia Pacific.

Hello and Happy Friday!

I am Saijal Patel reporting from CNBC's Asian headquarters. And here are the top stories across the region.

Wheat prices extend its rally in Asia today on concerns that other nations may follow Russia's ban on wheat exports.

Prices had hit 23 month highs when Russia said it will suspend shipments in the face of its worst drought in 50 years.

The ban will take effect on August 15 till year end.

But it's not just wheat prices that have been rising in isolation, oats are up 44 percent since May. Coffee's up 24 percent and corn's gained 13 percent.

There are now fears that wider inflation may be on the cards.

(SOT) Jonathan Barratt, Managing Director, Commodity Broking Services:

"If you look at the increases we have across the board, and you look at some of them 2 weeks high, and 2 months highs, 22-month high for wheat, you know, rice starting to move up, you do have that potential that these high prices have to feed through the economy, and as a result of that, those economies that have inflation concerns like Australia where we're the top in that band, this will feed right into it, and as a result of that, I think you'll find you could get through a tightening process recommencing.”

Meantime, China's central bank said although inflation risks persist, they are expected to be controllable in the second half of the year.

In its policy report for the second quarter, the PBOC said China's economy is on course for stable growth.

With food prices now expected to climb further, how will China manage?

(SOT) Clive McDonnell, Regional Strategist, BNP Paribas Securities:

"In the context of China we need to keep in mind the press controls that exist. and similar to what we've seen from President Putin and Russia, for the past 24 hours or so, he is basically trying to limit exports now, as a way to treat domestic prices under control. I think in China's sense, agricultural commodities are also heavily subsidized, so we're not necessarily going to see the impact of the global surge feed through immediately to domestic food manufacturer.”

We take a look now at how financial markets stacked up at the end of trading day.

It was day of volatile trading in most of Asia.

Starting in Japan, the benchmark Nikkei 225 closed lower 0.12 percent.

Exporters led the slide as companies are concerned about the impact of a stronger yen on corporate earnings.

Meantime, South Korea's KOSPI finished flat, closing at 1784 points.

Exporters such as Hyundai Motor finished lower, pressured by downbeat U.S. economic data,

In Australia, the S&P ASX 200 closed in negative territory, losing half a percent for the day.

The Hang Seng saw a mixed day of trade, with Hutchison Whampoa in the focus after the conglomerate announced better-than-expected earnings

And now for a look ahead to the key issues out of India next week.

We go to CNBC-TV 18 reporter, Reema Tendulkar.

Thanks so much. The Indian markets enter their last week of results earnings next week. There's a lot of important heavy weights, fewer in number but nevertheless very important from the frontline space announcing their numbers.

Starting with on Monday, you have lines capital, which will be declaring their numbers. on Tuesday, you have Tata Motors. On Wednesday, it's going to be Bharti. On Thursday, you have earnings which will be declared by State Bank of India, Tata Steel and Ranbaxy, so all these three heavyweights will be declaring their numbers. And you also have some macroeconomic data which will be coming out, one is going to be the IIP numbers, that's the industrial production data for the month of June.

Just to put things into perspective, in the month of May, we slipped quite sharply, and the May IIP numbers came in at 11.5%. So this is going to be a very important figure to come to know what's the kind of recovery pace we are staring at and we also have the inflation data, which will be declared on Thursday. And following up, will be an update on rainfall and how it's been, so that will be declared by the Indian Meteorological Department.

Market attention will focus on U.S. non farm payroll figures out later this evening.

The median forecast of economists polled by Reuters, is for a decline in payroll with an overall drop of 65 thousand in the month of July, adding concern that the economic recovery is stalling.

Tonight's data is important as it comes just ahead of the Federal Reserve's meeting next week.

(SOT) Vassili Serebriakov, Currency strategist, Wells Fargo:

“Ithink it's going to be a huge number either way, probably forget a surprise plus 100,000 or minus 100,000 relative to expectations, I think people are really going be starting to anticipate what the Fed is going do next week. I think the market is certainly leaning towards expecting some sort of policy action or at least a change in the language of Fed. I think we'll take a fairly strong number to dissuade the market at this point."

So, is the U.S. economy just slowing down or set for a double dip?

We've talked about it for a while now, and even as we move through the third quarter, opinion seems to be split amongst economists who have come up with everything from a square root — to a saw tooth recovery.

CNBC's Phil Lebeau sat down with US president Barack Obama in an exclusive interview, and took opportunity to ask the President if he was confident the country would avoid a double dip recession.

(Pakage Starts)

Obama: I am confident about that. I think that we've got a lot of work to do. There are some trends that we got to address, particularly in terms of long term unemployment. So, a lot of folks who went from manufacturing and went into construction industry during the housing bubble, that bubble popped, you got a lot of blue collar guys who are now looking for work. We got to make sure we're providing them some support. One of the things where we could employ a lot of those folks is in rebuilding America’s infrastructure for the 21st century, and that's something I'd like to work between the Democrats and Republicans to agree on how can we get new 21st century infrastructure. And the second thing is we've got to really look at in terms of long term economic growth but has not yet been dealt with is the deficit and the debt.

Lebeau: Tomorrow is jobs number and there is a feeling on Wall Street that if the number is weak, it brings up the question of whether or not your administration needs to offer tax incentives to corporations to induce more hiring. Do you need to step up to the plate and doing even more in terms of tax incentives to get these companies to hire?

Obama: I mean, the interesting thing is, we've just gone through a two-week debate, in which I’m trying to move a small business bill that provides exactly what you're talking about, tax incentives to small businesses that create 2 out of 3 American jobs. We eliminate capital gains for start ups, we have tried to work with other party in getting things done because recovery is still not as strong as it should be. For some reason, even though these are things that republicans have traditionally stood for, the chamber of commerce is in favor, the NFIB is in favor, and for some reason, they're still blocking it from getting out of the senate. It doesn't make sense. We definitely need to do more to help small businesses, make sure they get credit, make sure that they're lessening their tax burden.

(Package ends)

Well, that wraps up today's business highlights and the trading week in Asia.

I'm Saijal Patel from CNBC.

Have a good evening.

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