The US department of Agriculture has estimated that the American milk output for 2013 will drop around 0.5 percent to 198.9bn pounds as the number of milk producing cows drops to an eight year low. Corn crops, an essential component of cattle feed, have soared to record high prices in August after a summer of draught and pestilence afflicted the US and destroyed much of the harvest. According to the UN, global dairy prices rose 6.9 percent last month alone. The supply of feed is likely to remain low for the next 12 months, slowing the output in the US and Europe considerably. American cows produced an average of 1,776 pounds of milk each in August, a year-on-year decline of 0.5 percent. The results are the first negative figures in 13 months and the single biggest year-on-year decline since February 2004. Because of the rising feed prices and the drop in productivity, 2.04 million dairy cows have been slaughtered since the beginning of the year, the biggest cull since 1986, according to US government figures. The same report shows that the number of dairy cows in the US will shrink by 1.1 percent in 2013, the smallest herd since 2005. Milk futures have been on an upwards drive since mid-April, having gone up around 45 percent, and experts believe that  they may yet rise another 19 percent by the start of the next harvest in June 2013.

The World Bank has cut its forecast for China’s growth rate this year citing concerns over the weak demand for its exports, and slow investment growth. The global lender cut its prediction to 7.7 percent, down from the 8.2 percent growth estimate it made in May. In a report on the state of East Asia and Pacific economies the World Bank said there are fears that China might slow down even further. “The risk remains of a more pronounced slowdown in China than currently expected,” said the report. China has been hit particularly hard this year by slow international demand for exports to the eurozone and the US, two of its biggest markets. Since the onset of the global economic downturn, the Chinese authorities have rolled out a number of growth stimulus packages, but domestic demand has not grown enough to offset the drop in foreign sales. China grew 9.3 percent in 2011. Specialists have suggested that the slowdown has been compounded by the recent efforts made by the government to curb high inflation, and mitigate the country’s housing bubble. Other East Asian nations are also covered by the World Bank report, which predicts that average growth in the region should increase to 7.6 percent this year.

The US credit union regulator has filed a lawsuit against the American arm of Credit Suisse Securities, accusing it of selling faulty or misrepresented mortgage-backed securities to three credit unions, which later collapsed. The suit was filed in a federal court in Kansas City, Kansas. It was revealed in a statement by the National Credit Union Administration (NCUA) that the three credit unions bought over $715m of the faulty securities after allegedly being led to believe that there was little chance of losing money from the investment. The securities were sold to US Central Federal Credit Union, Western Corporate Federal Credit Union and Southwest Corporate Federal Credit Union, all of whom have since failed. “Credit Suisse is one of several firms that sold faulty securities to corporate credit unions, which led to their collapse,” the agency said in a statement. The suite goes on to accuse Credit Suisse of underwriting and selling securities that were “significantly riskier than represented” to prospective buyers. The NCUA has previously sued seven other investment banks and financial institutions in an attempt to recoup losses by credit unions across the US. Some previous defendants include JP Morgan Chase and JP Morgan Securities, The Royal Bank of Scotland Group and Goldman Sachs.

Nasdaq was forced to cancel a number of stock trades in Kraft Foods after a trading glitch caused the company’s shares to shoot up nearly 30 percent. The trading error comes just days after Kraft Foods and their former snack business Mondelez International began trading as two separate companies. Kraft and Mondelez have recently switched their shares from the New York Stock Exchange to Nasdaq. Both companies’ shares soared as much as 28.9 percent within one minute of the opening bell on Wednesday morning. The error was spotted within an hour of the market opening. A subsequent review ruled the trades ‘erroneous’ and they were cancelled. Preliminary investigations have concluded the price hike and subsequent erroneous trades were the result of a faulty algorithm. The error has alluded to Nasdaq’s failure to handle the Facebook public offering properly in May and a recent software error at Knight Capital which caused $440m in losses. Recently regulators have been expressing concerns about the over-reliance on technologies and potential side-effects this might have on market stability. “Trading in Kraft was affected by a broker error that impacted multiple stock exchanges,” Nasdaq said in a statement. “Nasdaq’s systems performed normally and the industry’s process for handling these issues worked as intended.” The company has named the broker involved. “Participants should review their trading activity for potentially erroneous trades and request adjudication through the ‘Clearly Erroneous’ process within the applicable timeframe for filing pursuant to the rule,” the statement said.

An advisory group set up by the European Commission has called for Europe’s biggest banks to keep their traditional deposit-keeping business legally apart from other, higher-risk activities. The recommendations intend to safeguard ordinary bank clients and savers from future banking crisis and to avoid further shocks to the banking system. The Liikanen Group made the recommendations for the “legal separation of […] particularly risky financial activities from deposit taking”, as well as “activities closely linked with securities and derivatives”.  The group was commissioned with reviewing the European banking system last year. Experts say that ring fencing investment banking would protect retail sections of the bank that carry depositors’ money to continue operating in the event of a collapse of another arm of any given banking institution. Erkki Liikanen, chair of the committee and governor of Finland’s central bank, said the recommendations aimed “to limit the implicit or explicit stake of taxpayers in the trading parts of banking groups”. Bank lobby groups have been critical of the report cautioning against too much structural change. “We do not believe that further changes to the structure of the banking industry are necessary,” said Simon Lewis, chief executive of The Association for Financial Markets in Europe.