Monday, October 25, 2010

20101025 1821 FCPO EOD Daily Chart Study.

FCPO closed : 3060, changed : +55 points, volume : higher.
Bollinger band reading : upside biased.
MACD Histrogram : resumed higher, buyer market.
Support : 3070, 3050, 3020 level.
Resistant : 3100, 3150, 3200 level.
Comment :
15 years low US Dollar triggered most commodities to rally breaking higher price including soy oil and crude oil lead FCPO to opened gap up and surged higher breaking 3 levels of resistant level closed recorded huge gain. Daily chart wise, Boliinger band continue to expand outward with today daily wide body doji bar candle ended near upper Bollinger band level. Reading wise, market still trading upside biased but nevertheless market may need to have some correction as price already extended about 180 points since last Wednesday.
When to buy : buy at support and weakness with quick cut loss and profit target.
When to sell : sell at resistant or strength with quick cut loss and profit target.

20101025 1719 FKLI EOD Daily Chart Study.

FKLI closed : 1494.5, changed : +4 points,  volume : higher.
Bollinger band reading : correction range bound upside biased.
MACD Histrogram : turned upward, buyer defending.
Support : 1485, 1470, 1458 level.
Resistant : 1500, 1530, 1550 level.
Comment :
4.5 points range market FKLI ended higher in better but relatively low volume transactions after traded range bound the entire day as market seems lack of catalyst for move plus awaits US Fed chairman tonight Ben Bernanke statement on the housing issue. Daily chart formed a small body doji bar candle with traded side way range bound for the third day without any clear direction hovering near the upper part of the Bollinger band. Reading wise, uptrend still remained intact with a near term correction range bound upside biased development testing support and resistant to determined the underlying strength of the market.
When to buy : buy at support or weakness with quick cut loss and profit target.
When to sell : sell at resistant or strength with quick cut loss and profit target.

20101025 1005 Local & Global Economics News.

Malaysia: Inflation slows, reducing pressure for rate increase
Malaysia’s inflation rate fell to a three-month low in September, reducing pressure on policy makers to raise interest rates at their next meeting. Consumer prices rose 1.8% from a year earlier after gaining 2.1% in August, the Putrajaya, Malaysia-based statistics department said. That compares with the median forecast for a 2.1% gain in a Bloomberg News survey of 14 economists. (Bloomberg)

Japan: BOJ said to consider buying lower-rated company debt
The Bank of Japan may buy lower- rated corporate debt as part of its latest program to help companies borrow cash and support the economy, three people with direct knowledge of the discussions said. The BOJ will likely consider purchasing BBB-rated corporate bonds and a-2 commercial paper at a policy meeting on October. The purchases would come under a JPY5trn (USD61bn) program unveiled by the bank on 5 Oct that includes government bonds, exchange-traded funds and real-estate investment trusts. (Bloomberg)

China: G-20 to avoid ‘competitive devaluation,’ prod China
Group of 20 finance ministers and central bankers vowed to avoid weakening currencies to lift exports, leaving leaders to flesh out new ways of prodding fellow member China to allow faster gains in the yuan. Officials ended talks in South Korea pledging to refrain from “competitive devaluation” and to let markets set foreign-exchange values more as they sought to calm fears that they risk a trade war by using cheaper currencies to spur growth. They called for more sustainable current-account gaps without embracing a US proposal for targets, an initiative aimed at making a yuan advance more palatable to China. (Bloomberg)

UK: Growth pace probably slowed to 0.4% in third quarter
UK economic growth slowed in the third quarter to a third of the pace in the previous three months as consumer spending faltered, a survey of economists showed. The economy expanded 0.4% in the period, down from 1.2% growth in the second quarter, according to the median forecast in a Bloomberg News survey of 35 economists. (Bloomberg)

US: Growth probably sped up on spending gain
The economy in the US probably grew at a faster pace in the third quarter, reflecting a pick-up in consumer spending that bodes well for the recovery’s staying power, economists projected a report this week will show. GDP rose at a 2% annual pace, up from a 1.7% rate in the previous three months, according to the median estimate of 67 economists surveyed by Bloomberg News before 29th Oct Commerce Department report. Other data may show business investment remains a mainstay of the economic rebound, while housing is mired in a slump. (Bloomberg)

US: Deflation disappears with bond market showing no double dip
The bond market is showing Federal Reserve Chairman Ben S. Bernanke will succeed in sparking inflation after the smallest gain in core consumer prices in half a century increased concerns that the economy will deflate. Expectations for rising consumer prices have increased faster in the US than any other bond market this month as central bankers made the case for monetary easing through additional asset purchases. Yields on 30-year Treasuries climbed as much as half a percentage point since September to 2.61% points more than similar maturity inflation-indexed debt, the widest gap since May and an indication for anticipated gains in consumer prices. (Bloomberg)

20101025 1003 Malaysia Political & Corporate News.

Najib calls on Umno to get ready for general election
Umno president Datuk Seri Najib Tun Razak has given the clearest indication yet that the 13th general election is imminent when he told the party faithful to get ready for it and to get into battle mode. His deputy Tan Sri Muhyiddin Yassin was even more direct when he said that “it cannot be denied that the general election is just a few months away.” The 61st Umno general assembly has been abuzz with talk that the elections could be held as early as July. Stopping short of naming the date for the general election, Najib said he would first start with a revamp of the party leadership at state and federal levels, leaving many expecting a Cabinet reshuffle and even some new Mentris Besar or Chief Ministers. (The Star)
Batu Sapi:
• The late MP’s widow, Linda Tsen, is BN candidate
• Pakatan’s candidate is lawyer Ansari Abdullah
• Former CM Yong is SAPP's choice
In three separate announcements yesterday, the names of the by-election candidates for the Batu Sapi parliamentary seat have been announced. Housewife and part-time music teacher Datin Linda Tsen Thau Lin, 54, was been named the Barisan Nasional candidate for the Batu Sapi parliament seat. Linda, the widow of MP Datuk Edmund Chong Ket Wah, is also the deputy wanita chief of the Elopura Parti Bersatu Sabah (PBS) division that was headed by her late husband. Oppostion coalition Pakatan Rakyat has picked Parti Keadlilan Rakyat supreme council member Ansari Abdullah as its candidate for the Batu Sapi by-election on 4 Nov. Sabah Progressive Party president (SAPP) Datuk Yong Teck Lee is the party’s candidate for the by-election. The announcement was made here Saturday by SAPP vice-president Poon Kee Yong, who said the decision to field the former chief minister was finally agreed upon by the party’s leaders at 2am. (The Star)

Asas Serba throws spanner in the works at UEM-EPF deal
Asas Serba SB, a consortium of businessmen, has not given up hope to acquire PLUS and plans to submit a competing proposal. According to Asas Serba spokesperson, Datuk Syed Md Amin Aljeffri, he said that Asas Serba will submit a counter offer soon. PLUS had earlier received a buyout offer worth RM23bn, or equivalent to RM4.60 per share, made by its largest shareholder UEM with EPF as its partner to take over the company’s assets and liabilities. (Malaysian Reserve)

KL-S’pore high-speed link proposal to be made soon
A proposal for a high-speed train from Kuala Lumpur to Singapore using the magnetic levitation (maglev) technology will soon be submitted to the Government, industry sources said. The sources also said the Government would soon appoint an international consulting firm to study the various proposals for the highspeed rail link to Singapore. The maglev is the train system that links Shanghai’s Pudong airport with its financial district and was the first installation of its kind in the world. The journey of 30km takes about seven minutes. The maglev train in Shanghai can reach speeds of up to 350km per hour in two minutes, although new generation trains being developed on this technology can go even faster, it is understood. The maglev proposal will be competing with that of the conventional high-speed rail network, an idea first mooted by the YTL Group. Its technology partner then was said to be Germany’s Siemens, a global expert in high-speed rail technology. (Starbiz)

EPF to call for open bid in 2011
The Employees Provident Fund (EPF) is expected to call for an open tender to develop the 1,214ha of federal land in Sungai Buloh, Selangor, in the second half of next year. It is learnt that the EPF has initiated a master plan for the land development, which is expected to take six months to a year to complete. The land, dubbed the "new hub" for the Klang Valley and owned by the Rubber Board of Malaysia, will be split into several parcels to attract local and foreign private property companies. "The land will not be offered to just one developer. We will be fair and offer land parcels to several companies through an open tender system," a government source said. Speculation was rife that the EPF would likely appoint Malaysian Resources Corp Bhd (MRCB) as the project's master planner and lead developer since it owns 41.5% of the company. However, the pension fund said that Kwasa Land SB - its joint venture with the government - would tender individual parcels of land through a transparent process. (BT)

Sunway signs MoU for China development
Sunway holdings has signed an MoU with Shanghai Zhushengyuan Real Estate Co (SZRE) Ltd to explore the feasibility of a mixed development project in Changsha and other parts of China. Under the MoU, both parties will jointly bid, invest, construct and develop the land plots for the proposed development. The agreement is valid for 18 months, unless extended by Sunway and SZRE. (Malaysian Reserve) 

20101025 0858 Global Market News.

OIL: Crude climbs ahead of Bernanke speech
SINGAPORE, Oct 25 (Reuters) - Oil rose on Monday as the dollar weakened ahead of a speech by Fed chief Ben Bernanke, where he could outline details of an expected new round of U.S. monetary stimulus, after G20 finance ministers agreed to shun competitive currency devaluations.
Market players were keenly waiting to see if Federal Reserve Chairman Bernanke would indicate how much Treasury bonds the U.S. central bank is likely buy, in a highly anticipated move to pump more money to shore up a faltering economy. Bernanke is due to speak at a conference at 1230 GMT.

COMMODITY MARKETS: Risk assets focus on Fed after G20 nod
LONDON, Oct 24 (Reuters) - Copper and other growth-linked commodities are likely to stay focused on future U.S. policy easing as a driver, although the G20's hardened stance towards exchange rates could help unsettle an amply-supplied oil market.
"There's some token partnership in working together, but there's nothing formal that's going to change the amount of liquidity," said Patrick Armstrong of London-based Armstrong Investment Managers.

GLOBAL MARKETS: Dollar slides, commodities rise after G20
HONG KONG, Oct 25 (Reuters) - The dollar slid against yen and other Asian currencies on Monday after a Group of 20 meeting produced enough agreement to keep a status quo trade of selling the U.S. currency and buying equities and commodities such as gold.
While the international meeting did not reach a consensus on details such as numerical targets for a country's economic imbalances, the G20 found common ground on the need for more "market oriented" exchange rates and concluded with a shift in power to developing economies in the International Monetary Fund -- enough to avert an all-out currency war, for now.

BP to miss Big Oil's bumper Q3 due to oil spill
LONDON, Oct 22 (Reuters) - BP's  Gulf of Mexico oil spill meant it missed out on an industry-wide trend of higher profits and rising production in the third quarter, according to a Reuters poll.
BP's third-quarter replacement cost profit was forecast down 2 percent to $4.60 billion despite a 12 percent rise in crude prices, a 29 percent hike in U.S. natural gas prices and a doubling in British gas prices, the poll found. 

PRECIOUS-Gold hits 2-1/2 week low as dollar steadies
LONDON, Oct 22 (Reuters) - Gold hit its lowest in more than two weeks in Europe on Friday as the dollar steadied amid wariness over whether any clear agreement to tackle currency imbalances will be reached at this weekend's G20 meeting.
"The main pressure is the dollar, but also profit-taking," said Commerzbank analyst Eugen Weinberg.

FOREX-Dlr steadies as caution sets in ahead of G20 meeting
LONDON, Oct 22 (Reuters) - The dollar steadied on Friday as investors hesitated about extending bearish bets against the greenback on uncertainty over whether any agreement would be reached at a weekend meeting of Group of 20 finance leaders.
"A new currency accord will be hard to achieve in principle and even harder to push through in practice, over the hurdles of domestic political pragmatism," said Lena Komileva, head of G7 market economics at Tullett Prebon.

Dollar slides before G20, gold and oil rise
HONG KONG, Oct 22 (Reuters) - The dollar fell on Friday on speculation a U.S. plan that included letting undervalued currencies strengthen would gain support at a contentious weekend Group of 20 meeting, lifting gold and oil prices.
"We believe that timing is right to add additional short USD exposure vs. EUR," they said in a note. "Since we believe that apparent widespread expectation for coordinated action to manage the USD's decline will not be met, we suspect that disappointment could translate into a further broad based decline in USD."

20101025 0856 Soy Oil & Palm Oil Related News.

Oil tops $82 ahead of Bernanke speech as dollar weakens
SINGAPORE, Oct 25 (Reuters) - Oil rose past $82 as the dollar weakened ahead of a speech by Federal Reserve Chairman Ben Bernanke, where he may outline details of an expected new round of U.S. monetary stimulus.
"People are still focused on QE and the fact that they are going to be printing more money."

Japan Sept crude oil import volume down 0.8 pct y/y
TOKYO, Oct 25 (Reuters) - The volume of Japan's customs-cleared crude oil imports fell 0.8 percent in September from the same month a year earlier, the Ministry of Finance said on Monday.
Japan, the world's third-biggest oil consumer, imported 17.758 million kilolitres (3.72 million barrels per day) of crude oil last month, the preliminary data showed.

U.S. corn jumps 2 pct on weak dollar, soy up 1.5 pct
SINGAPORE, Oct 25 (Reuters) - U.S. corn futures rose more than 2 percent, edging closer to a two-year high reached earlier this month as a weakening dollar supported commodities amid prospects of strong global demand for the grain.
"The dollar index is down around half a percent from Friday's close, which is providing overwhelming support to the entire commodity complex."

Soy, corn sowing bound ahead in Argentina - gov't
BUENOS AIRES, Oct 22 (Reuters) - Argentine farmers made swift progress to plant corn and soybeans this week, with some growers starting early to take advantage of moist soils, the Agriculture Ministry said on Friday.
Argentina is the world's No. 3 soybean supplier and growers gathered a record 52.7 million tonnes last season, although there are concerns that dry weather linked to the La Nina weather phenomenon could affect the oilseed during this campaign. 

ITS CPO export down 4.7% to 1,108,384 tonnes for the period of 1~25 Oct 2010.
SGS CPO export up 1% to 1,091,158 tonnes for the period of 1~25 Oct 2010. 

Soy product futures ended mixed, with soyoil rising against soymeal on spreads. Soyoil was buoyed by spillover strength from crude oil and supportive demand outlooks for world vegoils, analysts said. Soymeal futures drifted lower, succumbing to oil/meal spreading and end-of week profit taking. December soyoil settled 0.06 cents or 0.1% higher at 48.30 cents a pound. December soymeal ended $2.50 or 0.7% lower at $330.90 a short ton. (Source : CME)

Chinese Buying of US Soybeans On Record Pace (Source : CME)
Chinese buyers are scooping up U.S. soybeans at a record pace this fall as changing diets and concerns of a supply shock drive a fundamental shift in export demand. The robust appetite for beans from an ocean away is behind a rally in U.S. soybeans futures, which hit a 14-month high this week. The surge is expected to trickle down to supermarket shelves eventually. The strong buying comes as China looks to keep up with a growing appetite among its middle class for pork and chicken, which are fattened with feed made from soybeans. The country is stockpiling beans to steady food prices and protect against any hiccups in global supplies, particularly from South America. Domestically, China isn't increasing the size of its soybean crop, instead finding it easier to rely on imports, analysts said. Chinese buyers have booked 15.3 million metric tons in soybean sales so far in the current marketing year, which started Sept. 1.
That's 14% more than the same period a year ago and more than double the sales levels in 2007 and 2008. China's domestic soybean production is stuck around 15 million to 16 million tons, while per-capita meat and vegetable-oil consumption grow. That leaves the country more vulnerable to potential supply problems in South America. Demand from China typically shifts to South American in January, but any disruptions force buyers to return to the U.S. market. The volatility of prices seen in the last few years may be factoring into China's move to build soybean stocks, said Bill Nelson, analyst with Doane Advisory Service in St. Louis, Mo. Strong sales into China are driven in part by fears recent drought conditions will continue in Brazil, the world's second-largest soybean exporter after the U.S, said Tim Hannagan, analyst with PFG Best in Chicago. "That has led to building stocks, particularly after price volatility seen with wheat after a devastating drought in Russia earlier this year," Nelson said.
China significantly increased its inventories of soybeans in the last decade, raising stocks from an average of 3 million to 4 million tons to 15.6 million projected for 2011 by U.S. Department of Agriculture. Overall export sales from the U.S. into China have surged in just a few years. In the last marketing year, the value of soybean exports totaled $9.139 billion, up 28% from the prior year, and up from $2.693 billion from five years ago, according to data from Department of Commerce, U.S. Census Bureau, and Foreign Trade Statistics. China is the biggest U.S. customer by far, dwarfing Mexico --the second-largest export location--at $3.268 billion last year. U.S. soybean futures have rallied 21% since Sept. 1, as export demand overshadowed seasonal pressures from a record projected 2010 U.S. soybean harvest. Futures, which traded around $12 a bushel Friday at the Chicago Board of Trade, remain below all-time highs reached in 2008.
Yet analysts expected prices to post further gains this year since a pullback in Chinese demand isn't likely. The price strength is an advantage for farmers worldwide. Yet for those in the U.S., the strong export demand won't necessarily mean they'll plant additional acres of soybeans. Corn prices are strong as well, and farmers face less global competition for that crop. Processors, however, are likely to suffer under strong bean prices as they absorb increased commodity costs or try to increase their selling price and risk losing market share.

U.S. corn, soy rise 0.7 pct on firm equities, oil
SINGAPORE, Oct 22 (Reuters) - U.S. corn and soybeans rose around 0.7 percent on Friday as gains in Asian equity markets and crude oil supported grain futures amid technical signals indicating higher corn prices.
"Really what is driving the grain markets is the outside influence," said Paul Deane, agricultural commodity strategist at ANZ. "We are seeing a bit of bounce in is sort of global attitude to risk."

Gain on China demand hopes, palm around 3,000 rgt
KUALA LUMPUR, Oct 22 (Reuters) - Global vegetable oils hovered on Friday below their highest in more than two years as traders waited for more signs of continued Chinese demand for agriculture commodities and stronger crude oil markets.
"We believe an underlying U.S. dollar weakness over the next few years would sustain an upward shift in soft commodity price movements," said Hwang DBS in a research note.

Oil palm expansion to slow in Indonesia-DBS Bank
KUALA LUMPUR, Oct 22 (Reuters) - Planters in Indonesia are likely to slow oil palm estate expansion thanks to a looming two-year ban on clearing forests and growing scrutiny by green groups and consumers, DBS Bank said on Friday.
As a result, Malaysian and Indonesian planters will hold back on aggressive planting in 2010 and the years to come despite capital raising exercises last year to exploit low interest rates.

Indonesia to produce 22 mln T of palm oil in 2010-assoc
JAKARTA, Oct 22 (Reuters) - Indonesia is expected to produce 22 million tonnes of crude palm oil this year, down slightly from earlier expectations for 22.5 million tonnes because of prolonged rains, an industry association official said on Friday.
The Indonesia Palm Oil Association official said exports would be 16 million tonnes in 2010.

Argentina ahead with 2010/11 soy seeding-exchange
BUENOS AIRES, Oct 21 (Reuters) - Argentine farmers progressed swiftly with soy sowing last week due to damp soils in top farming regions and are well ahead of last year's seeding pace, the Buenos Aires Grains exchange said on Thursday.
Planting for the 2010/11 soy season started recently in the South American country, the world's No. 3 exporter, amid strong demand for soybeans from China, the top importer of the oilseed.

Argentine soy stocks seen ample to meet demand
BUENOS AIRES, Oct 21 (Reuters) - Argentina has sufficient stocks of the bumper 2009/10 soy crop to meet a surge in global demand until the start of the new season harvest in March, industry analysts said on Thursday.
Argentina is the world's No. 3 supplier of soybeans, much of which are shipped to China. Chinese crushers are snapping up South American beans, including new season soy, driving spot U.S. soybean futures  to a fresh 14-month high.