Thursday, November 18, 2010

Interactive Futures Event @ Cameron Highland Brinchang Hotel Titiwangsa Thu 18 Nov 2010 6.30pm

20101118 1838 FCPO EOD Daily Chart Study.

FCPO closed : 3318, changed : +53 points, volume : higher.
Bollinger band reading : correction range bound upside biased.
MACD Histrogram : weakening, buyer reducing exposure.
Support : 3300, 3270, 3200 level.
Resistant : 3350, 3420, 3450 level.
Comment :
Extra ordinary 211 points range market FCPO opened gap down severely, tested lower support levels and followed by bargain hunting activities lifted price upward to closed the day recorded gain with ultra high volume transacted as soy oil and crude oil also rebounded strongly recording gain as US Dollar turned weaker again. Daily chart formed a doji up bar candle bouncing off upward after tested below middle Bollinger band level with the reading still suggesting a correction range bound upside biased market development.
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.

20101118 1826 FKLI EOD Daily Chart Study.

FKLI closed : 1495.5, changed : +6.5 points,  volume : lower.
Bollinger band reading : side way range bound.
MACD Histrogram : getting lower, buyer reducing exposure..
Support : 1485, 1470, 1458 level.
Resistant : 1500, 1530, 1550 level.
Comment :
FKLI rebounded upward recorded gain with lower volume traded following major regional market rebounded strongly as market seems excited to see how General Motor share price perform that start trading today in the US. Daily chart formed another doji bar candle after market tested lower support level near lower Bollinger band and rebounded upward to closed near the high of the day with the reading remained calling a side way range bound 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.

20101118 0935 Local & Global Economics News.

Malaysia: Slower 2Q GDP growth seen
The country’s GDP growth is expected to decelerate to 6% or even lower, compared with 8.9% in the preceding quarter, due to lower exports amidst the weak recovery in the developed nations, economists said. The slower growth in the second half of the year is generally expected by most economists. One reason is the ease of the low-base effect, which was more prominent in the first six months of 2010. Nonetheless, the pace of the slowdown in the domestic economy will reveal the real picture of the recovery without the low-base effect. (Financial Daily)

China: Yuan’s Hong Kong premium shrinks 77% on HKMA swap
The premium paid for Yuan in Hong Kong shrank 77% in the past month as monetary authorities made more of the currency available to ease a shortage. Yuan traded in Hong Kong closed yesterday at 6.6025 per USD, 0.6% stronger than the rate in Shanghai, data compiled by Bloomberg show. The premium reached 2.6% on 19 Oct, the most since offshore trading began in July, and has been as little as 0.3% in the past week. The Hong Kong Monetary Authority said 28 Oct, it drew down RMB 10bn (USD1.5bn) via a swap with the People’s Bank of China. (Bloomberg)

China: May impose temporary price controls as inflation surges
China may impose temporary price controls to counter the fastest inflation in two years, the cabinet said. Price caps on “important daily necessities” and production materials will be used if necessary, the State Council said after a meeting chaired by Premier Wen Jiabao. China’s accelerating inflation has sent stocks and commodities sliding on speculation that efforts to curb prices will cool the world’s fastest-growing major economy. The State Council’s announcement came after the Shanghai Composite Index extended to 10% decline from an almost seven-month high on 8 Nov. (Bloomberg)

Australia: Wage growth accelerates by most in almost two years
Australian wages rose in the third quarter by the most in almost two years, as the growth of salaries in private industry outpaced government pay gains for the first time since the start of the global financial crisis. The wage price index, measuring hourly pay rates excluding bonuses, climbed 1.1% from the second quarter, when it rose 0.8%, the statistics bureau said. The index advanced 3.5% from a year earlier. (Bloomberg)

UK:Jobless claims unexpectedly fell in October
UK jobless claims unexpectedly fell in October, suggesting the labor market is recovering momentum as the prospect of a record budget squeeze looms. The number of people receiving unemployment benefits declined by 3,700 from September to 1.47m, the first drop since July, the Office for National Statistics said. The median of 23 forecasts in a Bloomberg News survey was for a rise of 6,000. Unemployment measured by International Labour Organization methods fell 9,000 to 2.45m people in the quarter through September. (Bloomberg)

EU: Crisis causes retreat from dollar bonds: credit markets
European companies’ sales of USD bonds fell to the lowest in almost a decade on concern the region’s budget deficit crisis will spiral out of control as Ireland comes closer to following Greece in getting a bailout. Borrowers in Europe have raised USD 1.4bn this month selling debt in the US, only 2.7% of all investment- grade issuance, the smallest share since February 2001 and down from USD9.3bn, or 32%, in the same period of October, according to data compiled by Bloomberg. Until this month, US bond sales by companies in Europe made up an average of 29% of issuance in 2010, the data show. (Bloomberg)

US: Economy prices cool, backing fed inflation view
The cost of living rose less than forecast in October and housing starts dropped, validating Federal Reserve Chairman Ben S. Bernanke’s decision to give the US economy another dose of monetary stimulus. Consumer prices excluding food and fuel, the gauge followed by central bankers, increased 0.6% from October 2009, the smallest gain in y-o-y data going back to 1958, the Labor Department said. Builders began work last month on the fewest homes since a record low reached in April 2009, according to figures from the Commerce Department. (Bloomberg)

US: Consumer prices in US probably rose in October on gasoline
The cost of living in the US probably rose for a fourth month in October, led by higher gasoline and food prices that aren’t filtering through to other goods and services, economists said. The consumer-price index increased 0.3% after a 0.1% gain the prior month, according to the median forecast of economists surveyed by Bloomberg News before the Labor Department report. Excluding food and fuel, so-called core costs may have increased 0.7% from October 2009, matching a record low. Another report may show housing starts last month fell to the lowest level since July. (Bloomberg)

U.S: Housing starts drop 12% in October, more than forecast . Housing starts fell to a 519,000 annual rate, the fewest since a record low reached in April 2009 and down from a revised 588,000 in September that was less than previously estimated. Work on multifamily units, which is often volatile, plunged 44%, swamping a 1.1% drop in single-family homes. (Source: Bloomberg)

E.U: Construction output fell for third month in September as declines in Spain and France offset increasing production in Germany. Construction in the 16-nation euro region dropped 2.1% MoM from August, when it slipped 0.4% MoM. From a year earlier, output fell 8.1% YoY. (Source: Bloomberg)

China: Consumer confidence drops on higher inflation . The measure dropped to 104 in the third quarter from 109 in the previous three months, according to a statement from Nielsen Co. and the Chinese statistics bureau's Economic Monitoring and Analysis Center. (Source: Bloomberg)

S. Korea: Department store sales in October rise most in eight months as unusually cold weather boosted demand for clothes. Outlays at the three biggest chains climbed 13.3 % YoY after rising 6.4% YoY in September. (Source: Bloomberg)

20101118 0933 Malaysia Corporate News.

ASX denies report it held merger talks With Bursa Malaysia
ASX Ltd rejected a media report suggesting Chief Executive Robert Elstone approached Bursa Malaysia earlier this year seeking a merger. Bursa Malaysia has also denied there was any such approach. (Bloomberg)

Carrefour suspends sale of stores in Malaysia, Singapore
Carrefour has suspended the sale of its Malaysian and Singapore stores after bidders, including Japan's Aeon Co Ltd, offered too little to persuade the French retailer to part with the operations, two sources said. Carrefour rejected offers in a second round of bidding that closed on 5 Nov and informed the potential buyers that the sale process has been put on hold, according to sources. (BT)

Sime may sell off some businesses
Sime Darby is considering selling off some of its businesses but will not be spinning off its lucrative units such as plantations as yet for a separate listing on the stock exchange. Acting president and group chief executive Datuk Mohd Bakke Mohd Salleh said there were a handful of businesses that might be divested or offered to its jointventure partners to be taken over. (StarBiz)

Proton eyeing Renault-Nissan involvement
Proton, which is set to take a 25% stake in Renault Formula One team, is seeking to expand its relationship with the Renault-Nissan alliance into passenger cars and potentially as a strategic partner to the national auto company. Plans are afoot to have Renault-Nissan involved in the Proton global car, named Emas, which is slotted for production by 2012. Furthermore, industry sources indicated that Proton would be looking at the alliance to provide a model to replace the Perdana model. (StarBiz)

Perodua: Record car sales likely next year
Perodua MD Datuk Aminar Rashid Salleh expects vehicles sales in Malaysia to hit 600,000 units, a new high, in 2011. He added that Perodua was confident of achieving its sales target of 185,000 units this year. (StarBiz)

YTL sees good demand for WiMAX service
YTL Communications is seeing “dramatic” demand for its WiMAX service in Malaysia, with pre-registrations for the product exceeding expectations three times, said executive chairman Tan Sri Francis Yeoh. Yeoh declined to give a specific target for the “yes” wireless Internet and voice service. (StarBiz)

O&G: Petronas working on oil and gas incentives. The Government is working closely with Petroliam Nasional Bhd (Petronas) to draw up incentives for oil and gas companies to optimise the nation's oil output. The incentives would help boost the industry and set the stage for Malaysia to become a regional hub for oilfield services. Petronas will announce specific incentives for the oil and gas sector in due course. (Source: The Star)

O&G: Schlumberger opens financial hub in Malaysia. Schlumberger Ltd opened its financial hub in Kuala Lumpur which will create employment opportunities for about 400 people next year. The Schlumberger Financial Hub is part of the Entry Point Projects (EPPs) to attract 100 multinational companies (MNCs) to set up their global or regional headquarters in the Greater Kuala Lumpur or Klang Valley under the Economic Transformation Programme (ETP). The hub will provide financial and accounting services to Schlumberger's businesses in Asia Pacific, the Middle East, European and African regions and 75% of its employees hired here will be Malaysians. (Source: The Edge Financial Daily)

Plantation: Malaysia, Indonesia in united stand to promote palm oil. The world's top palm oil producers - Malaysia and Indonesia - have concluded a two-day Joint Malaysia-Indonesia Ministerial Mission to the European Union (EU) to address concerns on the EU Renewable Energy Directive (RED) set to be implemented by Dec 5. The EU commissioners have indicated they were willing the review the EU RED criteria on palm oil if Malaysia and Indonesia were able to provide more inputs in the form of data and proven research. (Source: The Star) 

20101118 0856 Renewables Energy Related News.

BEIJING, Nov 17 (Reuters) - China has nudged to the pinnacle of world energy consumption rankings on the back of pig manure and other kinds of biomass fuel, according to the chief of the International Energy Agency, explaining why estimates differ.
Chinese officials have become huffy about their nation being called the world's biggest user of energy, fearing the title will bring with it more demands to slash consumption and greenhouse gas emissions, dragging down economic growth.

JAKARTA, Nov 15 (Reuters) - Indonesia's palm oil-based biodiesel production is expected to increase by nearly 17 percent next year, boosted by growing domestic consumption, an industry official said on Monday.
The biodiesel industry is expected to play an important role in absorbing growing palm oil output in Indonesia, but confusion over subsidy and rising feedstock prices, have made it difficult for the industry to expand.

LONDON, Nov 15 (Reuters) - Britain has enough existing and proposed green power generation to reach renewable targets, network operator National Grid  said on Monday, but added slow planning consent may hurt the chances of hitting them.
Just under 32 gigawatts (GW) of existing and proposed renewable generation have agreements in place to connect to Britain's high voltage system, National Grid said in a report, with only about 29 GW needed to meet Britain's 2020 renewable aims.

SAN FRANCISCO, Nov 10 (Reuters) - Solar energy and biofuels are on track to become economically competitive against conventional power sources within a few years to a decade, the Boston Consulting Group said on Wednesday.
Wind power and electric cars face hurdles to massive adoption, though, analysts at the consulting firm said in a report.

VANCOUVER, British Columbia, Nov 16 (Reuters) - Magma Energy Corp , which was embroiled in a dispute this year with singer Bjork over an Icelandic purchase, may sell up to 25 percent of the contentious asset to a local investor, the geothermal energy company said on Tuesday.
Magma, the only private energy company in Iceland, is not seeking to make a profit on the sale but is more interested in getting the right type of investor on board, Chief Executive Ross Beaty said.

LOS ANGELES/WASHINGTON, Nov 16 (Reuters) - A federal grant program aimed at spurring investment in the U.S. solar industry expires at the end of this year, and its supporters are scrambling to get it extended in the lame-duck session of Congress that started this week.
Prospects for renewal dim considerably come January when a new Congress takes over, with a Republican-controlled House of Representatives and a shrunken Democratic majority in the Senate. Many Republicans want to reverse the Obama administration's U.S. energy policy of focusing on renewable energy sources like solar and wind power.

MADRID, Nov 16 (Reuters) - Spain's capacity to generate hydropower and irrigate crops rose last week, official data showed on Tuesday in the major gas and grain importer.
Water reserves in drought-prone Spain declined over the summer and early autumn, but have recently begun to recover with the onset of wet weather and are comfortably above average.

BEIJING, Nov 16 (Reuters) - China may have quietly opened the floodgates to build new massive hydropower projects after a near halt due to environmental, immigration and other concerns, as Beijing steps up efforts to achieve clean energy and emissions targets.
The National Development and Reform Commission (NDRC) agreed in late October for China Three Gorges Power Corp (CTGPC) to proceed with early-stage studies of the 8.7-gigawatt (GW) Wudongde and 14-GW Baihetan hydropower projects, according to CTGPC.

FRANKFURT, Nov 15 (Reuters) - Sprucing up your company profile by hiring a popular soccer player and a former international TV celebrity to star in advertisements may be run of the mill marketing for some.
For a solar company, it may give the edge needed to survive in a fiercely competitive and fast-changing environment.

MOSCOW, Nov 12 (Reuters) - Russia's state nuclear unit Rosatom is planning to expand into wind power and will look for foreign partners to help build farms in the Balkans, Eastern Europe and Ukraine, its equipment head said on Friday.
"We are looking for a technology partner. The desire of all world leaders (in wind technology) to take part in the Russian wind power market is there," Vladimir Kashenko, Chief Executive of Rosatom's equipment unit Atomenergomash, told Reuters.

MANILA, Nov 15 (Reuters) - Philippine conglomerate Ayala Corp  said on Monday its wholly owned unit Michigan Power Inc (MPI) has teamed up with a unit of Japan's Mitsubishi Corp  to explore solar power ventures in the Philippines.
MPI and Diamond Generating Asia Ltd (DGA), a wholly owned subsidiary of Mitsubishi, will form a company to be called PhilNewEnergy for the venture.

FRANKFURT, Nov 12 (Reuters) - Two of Germany's top solar companies warned about challenging market conditions next year, as further subsidy cuts in Germany, the world's biggest market, could curb demand and margins.
"For the upcoming business year, Q-Cells expects a challenging market environment," the solar cell maker said in a statement on Friday.

LONDON, Nov 11 (Reuters) - The British energy ministry on Thursday approved a 900 megawatts (MW) gas-fired power plant in Lincolnshire and a 56 MW onshore wind farm in Northumberland.
"About a quarter of the UK's generating capacity is due to close by 2018 and we need to ensure that we secure the investment to replace that," Britain's Energy Minister Charles Hendry said in a statement.

20101118 0854 Biofuels Related News.

WASHINGTON, Nov 16 (Reuters) - The White House is reviewing the Environmental Protection Agency's final rule on how much ethanol and other renewable automobile fuels will be sold next year.
The EPA proposed in July that such fuels would account for 7.95 percent of gasoline sales next year to meet a congressional mandate that at least 13.95 billion gallons of renewable fuels be produced in 2011.

WASHINGTON, Nov 15 (Reuters) - High world prices for sugar, which reduce the U.S. market for Brazilian ethanol, should be taken into account in analyzing the impact of any changes in ethanol incentives, Agriculture Department analysts said on Monday.
Two major U.S. incentives are due to expire on Dec 31 -- a 45-cent a gallon tax credit for domestic fuel blenders and a 54-cent a gallon tariff on imports. An extension may be considered in a session of Congress that opened on Monday.

LONDON, Nov 10 (Reuters) - The European Union's biofuels industry is unlikely to expand until the debate about their impact on climate change is resolved and clear policies emerge, the head of major UK biofuels firm said on Wednesday.
"The (biofuels) industry is being held back by a lack of robust discrimination between what is good and what is bad," Alwyn Hughes, chief executive of Ensus said, referring to the differing environmental footprints of biofuels.

WASHINGTON, Nov 16 (Reuters) - The chairman of the Senate tax-writing committee said he would consider cutting the ethanol tax credit by one-third, to 30 cents a gallon, but the anti-spending mood in Washington imperils renewing the subsidy at any level.
Incentives worth $6 billion a year are due to expire on Dec. 31. Ethanol industry leaders are asking for Congress to extend them during a brief session that opened this week. 

20101118 0849 Global Market News.

China rates worry, Europe's stocks crawl back
London, Nov 17 (Reuters) - World stocks struggled  from concerns that China will raise interest rates further, hitting emerging markets, but Europe's equity decline stopped as investors took a break from Irish debt woes.
"Chinese rate hike prospects are one thing (affecting markets), there is also the prospect of tighter measures on inflows in Asia, especially Korea," said Gaelle Blanchard, emerging markets strategist at Societe Generale.

U.S. wholesale prices fall, output flat
WASHINGTON, Nov 16 (Reuters) - Core U.S. producer prices recorded their largest fall in more than four years in October and industrial output was flat, underlining concerns at the Federal Reserve about low inflation amid moderate growth.
Economists said the data supported the U.S. central bank's Nov. 3 decision to ease monetary policy further even though the 0.6 percent drop in the core Producer Price Index largely reflected the annual introduction of new motor vehicle models.

EU, IMF to lay groundwork for Irish rescue
BRUSSELS, Nov 16 (Reuters) - Euro zone finance ministers agreed on Tuesday to lay the groundwork for bailing out Ireland's banking sector with the IMF, but said Dublin had to decide itself whether to request the aid.
Before the ministers announced their decision in Brussels, Irish Prime Minister Brian Cowen resisted pressure to request a bailout -- even though the nation's banking and budget crisis risks spreading to other weak euro zone economies and could endanger the stability of the wider currency bloc.

China's Wen says price control measures on the way
BEIJING, Nov 17 (Reuters) - Chinese Premier Wen Jiabao has said his government is preparing steps to tame price rises, adding his voice to official efforts to reassure consumers irked by a rapid rise in the price of food.
Wen made the comments during a recent visit to the country's far south, the official Xinhua news agency reported, and they fed into market expectations that China will intensify tightening policies in the coming months.

China rare earth exports near 2010 quota - data
BEIJING, Nov 16 (Reuters) - Rare earth mineral exports from China may dry up for the rest of the year, according to data cited by the Ministry of Commerce on Tuesday that indicated this year's exports have already exceeded 2010 quotas.
China produces 97 percent of the world's rare earth metals, which are used in the making of high-tech goods and defence products. It set 2010 export quotas 40 percent lower than 2009 levels, raising alarm among buyer nations about supplies.

PRECIOUS-Gold lower on strong dollar, Ireland woes
SINGAPORE, Nov 17 (Reuters) - Gold edged lower on  Wednesday,   as mounting fears over Ireland's fiscal health sparked a strong   rally in the dollar, pressuring bullion, while worries about   China tightening monetary policy weighed on sentiment.    
Euro zone finance ministers agreed on Tuesday to lay the   groundwork for bailing out Ireland's banking sector with the  IMF, but said Dublin had to decide itself whether to request  the aid.

FOREX-Euro hunkered down near 7-wk lows on Irish woes
LONDON, Nov 17 (Reuters) - The euro traded near seven-week lows versus the dollar on Wednesday, hobbled by the lack of a clear solution to Ireland's debt crisis while high-yielding currencies suffered as risky trades were unwound.
Euro zone finance ministers agreed on Tuesday to lay the groundwork for bailing out Ireland's banking sector with the IMF, but Dublin has yet to decide whether to request the aid. 

Oil trades near Nov lows on China demand concerns
SINGAPORE, Nov 17 (Reuters) - Oil hovered near  early-November lows as speculation mounted that  China will step up efforts to cool its economy, while a sharp  drop in U.S. crude inventories prevented prices from sliding  further.   
"World growth has been put under question and markets are  nervous," said David Taylor, an analyst at CMC Markets in  Sydney, adding that declines in U.S. crude inventories "may be  stopping the price from sliding even further".

COMMODITY MARKETS: Markets dive second time in 3 days on dlr, China
NEW YORK, Nov 16 (Reuters) - Commodities plunged a second time in three days on Tuesday, with metals and grains falling 5 percent or more, as the dollar rocketed on Ireland's debt crisis and traders feared China may dampen growth with more aggressive tightening measures.
"It's a question of volatility more than anxiety, I think," said Nic Johnson, senior vice-president and portfolio manager who runs bond giant PIMCO's $18 billion commodities mutual fund.

GLOBAL MARKETS: Stocks, commodities sink on Irish crisis, China
NEW YORK, Nov 16 (Reuters) - World stocks fell for the seventh straight session on Tuesday as growing tensions about Europe's debt problems and expectations of tighter credit in China weighed on commodity prices and hurt investor sentiment.
"There's a global concern that if Ireland needs aid, it could become a domino effect with other countries," said Cort Gwon, director of trading strategies and research at FBN Securities in New York.

20101118 0844 Soy Oil & Palm Oil Related News.

Oil rebounds to $81 as European debt woes ease
SINGAPORE, Nov 18 (Reuters) - Oil rebounded from  four-week lows as a weaker dollar and cautious  optimism about Ireland's debt crisis rekindled interest for  commodities, while a sharp crude inventory decline in the  United States supported prices.
"There is concern about Europe, but markets have already  priced that in quite aggressively in the past few days," said  Mark Pervan, a senior commodities analyst at ANZ in Melbourne.

OIL: Crude edges up toward $81 after 4-week closing low
TOKYO, Nov 18 (Reuters) - U.S. crude futures edged up on Thursday from a a four-week closing low, paring four-day losses that drove prices down more than $7 a barrel amid concerns about global oil demand.
Oil erased $7.37, or 8.39 percent, over four days as worries about euro zone debt and Europe's economy added to doubts about oil demand.

COMMODITY MARKETS: Oil falls, but metals rebound after weeklong rout
NEW YORK, Nov 17 (Reuters) - Commodities were mixed on Wednesday, with crude oil dropping sharply to a four-week low, but other markets like natural gas and copper rose as selective buyers returned after a weeklong rout across raw materials markets.
"Even if China announces some major restriction to curb inflation, the global picture about supply shortages in many commodities is still there," said Romain Lathiere, a fund manager with Diapason Commodities Management.

GLOBAL MARKETS: Dollar, stocks fall on Ireland debt crisis
NEW YORK, Nov 17 (Reuters) - The dollar fell against the euro, yen and Swiss franc on Wednesday as the lack of a solution to Ireland's debt crisis weighed on markets.
"If we get a resolution to Ireland's problems, you could see the euro bounce," said Omer Esiner, chief market analyst at Commonwealth Foreign Exchange in Washington. "The overall bias is to the downside, given uncertainty about not just Ireland but Portugal and Spain."

CBOT soyoil stumbled once again, extending the week's losses, as traders reduced risk exposure in the market. Spillover weakness from crude oil futures added pressure to pin prices lower, analysts said. The threat of policy changes in China continued to apply pressure, as soyoil demand is more elastic and receptive to China price controls, said analyst Mike Zuzolo. Soymeal drifted lower with soybeans, but managed to trade in positive territory for most of the day on spillover support from other feed ingredients, corn and wheat, analyst said. CBOT Dec soyoil ended 1.03c or 2% lower at 48.94 cents per pound, and Dec soymeal traded $1.80 or 0.5% lower at $328 a short ton.(Source: CME)

Food Prices To Rise Further In 2011 If Crops Don't Increase-FAO (Source: CME)
Food prices around the world are rising and could increase further in 2011 if production of key crops doesn't expand, the United Nations' Food and Agriculture Organization warned. "Given the expectation of falling global inventories, the size of next year's crops will be critical in setting the tone for stability in international markets," the FAO said in its Food Outlook report. Prices of most agricultural commodities rose in the past six months due to a combination of weather-related crop losses, policy responses to crop shortages by some exporting countries and a weaker U.S. dollar. Sugar recently hit a 30-year high and coffee a 13-year high. Meanwhile, the price of cotton has more than doubled and corn, wheat and soybeans are up 49%, 39% and 35% respectively from a year ago.
"Consumers may have little choice but to pay higher prices for their food," FAO said, noting farmers may seek to tap a number of price rises by diversifying crops to sugar and soybeans, for example, and may not grow enough cereals as a result. "For major cereals, production must expand substantially to meet utilization and to reconstitute world reserves," the report said. The FAO forecasts world cereal production to fall 2.1% in the 2010-2011 crop year, contrasting a June prediction for a 1.2% rise. FAO also expects world cereal stocks to fall 7% on the year, with barley to drop 35%, corn to drop 12% and wheat to drop 10%. The report said only rice reserves will rise, by 6%. The sharp rise in prices could cause the international food import bill to pass $1 trillion for the first time since prices hit record levels in 2008, FAO said.
"With the pressure on world prices of most commodities not abating, the international community must remain vigilant against further supply shocks in 2011 and be prepared," FAO said. FAO forecasts 2010-2011 cereal production at 2.22 billion tons, down 2.1% from the year before, and cereal utilization at 2.25 billion tons, up 1.3%. It expects wheat production to fall 5.1% to 647.7 million tons and utilization to rise 1.2% to 668 million tons. The overall rise in the global food basket price was driven largely by sugar in recent months, FAO said. It forecasts sugar output to rise 7.75% to 168.80 million tons and utilization to rise 2.15% to 166.09 million tons.

Beijing To Tame Food, Fuel Prices(Source: CME)
China said it is ready to clamp price controls on daily necessities to bring down inflation, dusting off a measure from socialist central planning in a new sign of alarm by Chinese leaders who have been striving to cool economic growth through more conventional means such as raising interest rates. A statement from the State Council pledging to use administrative measures to tame rising prices of food and energy, and to cushion the poor with higher welfare payouts, appeared mainly to reflect government concerns that inflation could trigger social unrest. Accelerating food prices -- the biggest single component of China's inflation, now running well above the government's target of 3% for the year -- are hurting China's neediest households, and their plight could get worse as the country heads into what is forecast to be an unusually cold winter that threatens to disrupt transport and bring new fuel shortages.
Some economists interpreted the statement as a signal that the government was more concerned about the political fallout of inflation than with economic overheating in general. The last time Beijing resorted to price controls was when inflation spiked in 2008. Still, the measures feed into anxieties among investors that China will roll out increasingly stringent anti-inflation measures that will put a sudden brake on its growth. The State Council said the government would intervene "when necessary" to impose temporary controls on the prices of "important daily necessities and factors of production." It promised to crack down on speculators who have been driving up the price of agricultural commodities. And it outlined moves to boost the supply of diesel, used for farm vehicles, and control energy prices. Talk of price controls has worried investors for several days and has helped to send China's stock markets swooning.
The benchmark Shanghai Composite Index has lost 10% in the past four trading days, including a 2% drop Wednesday. That China feels it is necessary to use price controls has signaled that policy makers have been too reactive to the inflation threat, instead of getting ahead of the problem, says Li-Gang Liu, head of China economics for ANZ Bank in Hong Kong. "If they use too harsh monetary policy to tighten credit supply in the remainder of the year, it's quite likely we will see some sort of hard landing going forward," Mr. Liu says. Supermarkets and restaurants across China are passing on rising agricultural prices to their customers. McDonald's Corp. blamed growing costs for a decision to increase prices at its more than 1,100 China outlets by up to one yuan, or 15 U.S. cents, on a range of items, including Chicken McNuggets, pies, and ice cream.
A Chinese hard-landing scenario has helped roil international markets at a time when investors are consumed with European debt problems and rising bond yields in the U.S. China is seen by investors as having played a major role in reflating the global economy after the collapse of Lehman Brothers, and a bruising inflation fight could mean the world's fastest growing large economy could become weighed down. Expectations that China will curb its voracious appetite for commodities has sent prices lower for everything from crude oil to soybeans.

Trade Risks A Major Barrier To Agriculture Investment-Survey(Source: CME)
Political risks and opaque trade policies remain the largest barrier to investment in the agricultural sector, according to a published survey of global industry participants. More than 77% of respondents said they expect pension investments in the sector will increase in 2011-12, with South America and Russia and Eastern Europe expected to offer the greatest investment opportunities in the future. But uncertainty over government policies, like the export embargoes imposed by Russia and Ukraine this summer, were cited as a major concern by more than half of the 190 fund managers, farmers and institutional investors surveyed. "With the continuing agricultural supply and demand story and the issue of food security increasingly in the news, more and more investors are starting to investigate investing in agriculture as an asset class," said Nick Falkowski, conference director at Terrapin, which undertook the survey in preparation for its Agriculture Investment Summit 2011 next June. 

Ag spec jitters justified after China crackdown: Maguire
-- Gavin Maguire is a Reuters market analyst. The views expressed are his own.
CHICAGO, Nov 16 (Reuters) - Judging by the stampede out of nearly all the major commodity crops Tuesday, China's plans to crack down on domestic speculators in its agriculture markets has clearly spooked international traders and investors as well.
But as impressive as the day's hefty losses were in markets such as corn, soybeans, wheat and rice, the scale of large speculator net positions in these crops remains close to record high levels -- suggesting there is potential for further massive liquidation should the exodus continue.

US corn, soybeans tumble as speculators exit
SYDNEY, Nov 17 (Reuters) - U.S. corn tumbled nearly 3 percent to a fresh six-week low as grain and oilseed markets were pressured by a stronger dollar and fears about Chinese monetary tightening.
"Clearly there's a whole lot of speculative money coming out of this market, being led out of Asia," said Adam Davis, senior trader at Merricks Capital.

FAO sees more wheat in 2011/12 but warns on supply
MILAN, Nov 17 (Reuters) - Wheat plantings in Europe and the United States are rising in response to this year's lower global harvest, but the world must remain on the alert for future shortages, the United Nations' food agency said on Wednesday.
The FAO cut its estimate of 2010 world cereals output to 2.216 billion tonnes from its previous forecast of 2.239 billion tonnes.

EU approves Syngenta buy of Monsanto's sunflower unit
BRUSSELS, Nov 17 (Reuters) - Syngenta , the world's largest agrochemicals company, won conditional EU regulatory approval on Wednesday for its $160 million acquisition of U.S. peer Monsanto's  global hybrid sunflower seeds business.
The European Commission, which acts as the competition regulator in the EU, looked at the case because Syngenta had agreed to sell sunflower hybrids, commercialised or under official trial in Spain and Hungary, as well as material used for creating hybrids or being developed in the two countries.

Brazil soy growers sell 31 pct of new crop-Celeres
SAO PAULO, Nov 16 (Reuters) - Brazilian soybean producers have sold 31 percent of the 2010/11 soybean crop that farmers started planting in late September, up from 29 percent a week earlier, analysts Celeres said on Tuesday.
As of Nov. 12, sales of the new crop -- which is seen at a record 69.1 million tonnes -- were ahead of the 19 percent sold at this time last year. Celeres also said forward sales were ahead of the 24 percent sold on average over the last five years at this point, with international soy prices at 15-month highs.

China readies price controls to tackle food inflation
BEIJING, Nov 16 (Reuters) - China will unveil food price  controls and crack down on speculation in agricultural  commodities to contain inflationary pressure that its central  bank governor highlighted as a risk on Tuesday.    
With consumer prices rising at their fastest pace in more than two years, the National Development and Reform Commission, the country's top planning agency, is preparing a "one-two punch" of actions to rein in food costs, official  media reported.  

India 2009-10 Vegetable Oil Imports At Record 9.24 Mln Tons(Source: CME)
India's vegetable oil imports in the marketing year that ended on Oct. 31 rose 6.7% to a record 9.24 million metric tons as lower international prices boosted domestic demand, a trade body said. Edible oil imports in the year totaled 8.82 million tons, higher than the previous year's 8.18 million tons, the Solvent Extractors' Association of India said. It said a stronger per capita consumption in India, no tax on crude edible oil imports and a nominal duty on refined oils, helped increase imports. The depreciation of the U.S. dollar against the Indian rupee helped too, it added. India is the world's second-largest vegetable oil importer after China and meets more than half its requirements through imports. The trade body said vegetable oil imports in October 2010 rose to 832,699 tons from 667,276 tons a year earlier. Crude palm oil imports grew 8% from a year earlier to 476,039 tons, while imports of refined, bleached and deodorized palm olein rose 51% to 132,292 tons.  Soyoil imports more than doubled to 124,850 tons during October from 56,218 tons a year earlier. India imports palm oil mainly from Indonesia and Malaysia, and soyoil mostly from Brazil and Argentina. During 2009-10, crude palm oil imports declined marginally to 5.17 million tons and RBD palm olein imports fell 2.4% to 1.21 million tons, the trade body said. Soyoil imports during the marketing year jumped 68% to 1.67 million tons, it added. Imports of sunflower in October 2010 more than doubled to 36,445 tons, while for the year, they climbed to 630,005 tons from the previous year's 590,175 tons. As at Nov. 1, total edible oil stocks at ports were estimated at 670,000 tons. This comprises of 400,000 tons of crude palm oil, 60,000 tons of RBD palm olein, 140,000 tons of soyoil and 70,000 tons of sunflower oil. Indian companies have also entered into contracts to import another 780,000 tons of edible oil. Non-edible oil imports in 2009-10 declined 9% to 418,068 tons. Non-edible oil is used mainly to make soaps, detergents, and for other industrial purposes.