Thursday, December 16, 2010

20101216 1824 FCPO EOD Daily Chart Study.

FCPO closed : 3583, changed : -86 points(continuation chart), volume : lower.
Bollinger band reading : correction range bound upside biased.
MACD Histrogram : weakening, buyer reducing exposure.
Support : 3550, 3500, 3470 level.
Resistance : 3620, 3650, 3700 level.
Comment :
Correction FCPO continue to eased lower with thinner volume traded as market getting worry over a deteriorating export data despite soy oil futures price rebounding higher after overnight dropped.
Daily chart formed an up doji bar candle after market traded slowly within 51 points range market with the reading remained 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.

20101216 1754 FKLI EOD Daily Chart Study.

FKLI closed : 1495.5, changed : -9 points,  volume : higher.
Bollinger band reading : side way range bound.
MACD Histrogram : turned lower, seller show some interest taking small exposure testing market.
Support : 1485, 1470, 1458 level.
Resistance : 1500, 1530, 1550 level.
Comment :
FKLI closed recorded decline for the 5th consecutive day with little improved volume traded while Asia major market ended mixed.
Daily chart formed a down doji bar candle after market opened gap and traded lower and recovered slightly. Reading wise, market is likely to trade side way range bound for the near term testing underlying market strength.
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.

20101216 0953 Global Economics News.

U.S: November consumer prices rise 0.1% MoM, core rate up 0.1% MoM, indicating higher prices for commodities such as fuel aren't filtering through into other goods and services. (Source: Bloomberg)

U.S: New York region manufacturing growth beats forecasts in December. The Federal Reserve Bank of New York's general economic index climbed to 10.6 from minus 11.1 in November. Readings greater than zero signal expansion in the so-called Empire State Index, which covers New York, northern New Jersey and southern Connecticut. (Source: Bloomberg)

U.S: Global demand for assets slowed in October, Treasury says. Global demand for U.S. stocks, bonds and other financial assets slowed from a month earlier as net buying of long-term equities, notes and bonds totaled USD 27.6b during the month compared with net buying of USD 77.2b in September. Including short-term securities such as stock swaps, foreigners purchased a net USD 7.5b compared with net buying of USD 80.1b the previous month. (Source: Bloomberg)

China: Foreign direct investment in China rose the most in five months in November, indicating investors' confidence in the world's fastest-growing major economy. Investment rose 38.2% YoY to USD9.7b after a 7.9% YoY gain in October, the Ministry of Commerce said in a statement in Beijing. (Source: Bloomberg)

Japan: Tankan deteriorates in 4Q10 for first time since crisis. Confidence among Japan's largest manufacturers worsened for the first time since the end of the financial crisis last year after a stronger yen eroded export gains and the effect of government stimulus measures faded. The quarterly Tankan index of sentiment at large manufacturers dropped to 5 in December from 8 in September, the Bank of Japan said in Tokyo. A positive number means optimists outnumber pessimists. (Source: Bloomberg)

S. Korea: Unemployment rate unexpectedly fell to a six-month low in November as the nation's economic expansion encouraged manufacturers to hire more workers. The jobless rate fell to 3.2% in November from 3.6% in October, Statistics Korea said in Gwacheon. (Source: Bloomberg)

Vietnam: Rating cut by Moody's, citing payments risk. Vietnam's sovereign credit rating was lowered by Moody's Investors Service, which cited the risk of a balance of payments crisis and a drop in foreign reserves as inflation accelerates and the nation's currency weakens. Moody's cut Vietnam's long-term foreign-currency rating to B1 from Ba3, with a negative outlook, the company said in a statement. The new rating, four steps below investment grade, leaves Vietnam on par with Sri Lanka and Mongolia, according to data compiled by Bloomberg. Moody's also highlighted "debt distress" at state-owned Vietnam shipbuilding Industry Group, known as Vinashin. (Source: Bloomberg)

Australia: Consumer confidence rose in December from a five-month low as attitudes on spending improved heading into the holiday season. The sentiment index increased 0.2% to 111.0 this month, according to a Westpac Banking Corp. and Melbourne Institute survey of 1,200 consumers released in Sydney. (Source: Bloomberg)            

Spain: Rating on review by Moody’s before bond sale
Spain’s credit rating may be cut from Aa1, Moody’s Investors Service said, as the government prepares its final bond sale of the year tomorrow amid concern it may follow Greece and Ireland in seeking a bailout. Spain has to raise EUR170bn (USD226bn) next year, while refinancing needs for its regions total EUR30bn and for banks around EUR90bn, Moody’s estimates. (Bloomberg)

EU: Payrolls held steady in third quarter as economy slowed
European employment remained steady in the third quarter as the euro region’s recovery faltered. Payrolls in the 16-nation Euro region rose 0.1% in the previous three months, the European Union statistics office in Luxembourg said. From a year earlier, payrolls declined 0.2% after dropping 0.6% in the second quarter. (Bloomberg)

UK: Jobless-benefit claims fall less than forecast
UK jobless claims fell less than economists forecast in November, suggesting the recovery in the labor market may be moderating. The number of people receiving unemployment benefits declined 1,200 from October to 1.46m, the Office for National Statistics said in London. The median of 25 forecasts in a survey was for a drop of 3,000. (Bloomberg)

US: Production rises, inflation slows
Industrial production in the US increased more than forecast in November and consumer prices slowed, indicating the recovery is gaining momentum without generating inflation. Output at factories, mines and utilities rose 0.4%, the biggest gain since July, after a revised 0.2% drop in October, a Federal Reserve report showed. The consumer-price index climbed 0.1% in November after a 0.2% gain the prior month, the Labor Department said. (Bloomberg)

US: Homebuilder confidence index held at 16
Confidence among US homebuilders was unchanged in December from a month earlier, indicating residential construction will stay near depressed levels. The National Association of Home Builders/Wells Fargo index of builder confidence held at 16, data from the Washington-based group showed. Readings below 50 mean more respondents said conditions were poor. (Bloomberg)

U.S: Retail sales climb in November . The 0.8% MoM gain in purchases followed a 1.7% MoM jump in October that was larger than previously estimated. (Source: Bloomberg)

U.S: Confidence at small companies' increases to three-year high in November . The National Federation of Independent Business's optimism index increased to 93.2, the highest since December 2007, from an October reading of 91.7. Seven of the index's 10 components rose and three declined. The measure averaged 100.7 during the previous expansion. (Source: Bloomberg)

U.S: Inventories at companies increase 0.7% MoM; Sales up 1.4% MoM in October . The September increase in stockpiles was revised up to 1.3% MoM from a previously reported 0.9% MoM advance. (Source: Bloomberg)

U.K: Housing-market gauge stayed close to the lowest in 18 months in November as demand for homes waned, the Royal Institution of Chartered Surveyors said. The number of real-estate agents and surveyors saying prices fell exceeded those reporting gains by 44 percentage points, compared with minus 49 points in October, the London-based group said in an emailed report. (Source: Bloomberg)

Belgium: Has outlook on debt cut to 'negative' at S&P because the country's political stalemate makes it vulnerable to rising borrowing costs. S&P may cut Belgium's AA+ sovereign credit rating by one step within the next six months should the seven parties involved in coalition talks fail to form a government "soon," the credit agency said. It may also cut the rating within two years should the next government fail to stabilize public debt and improve political cohesion. (Source: Bloomberg)

Japan: Prime Minister Naoto Kan ordered a 5ppts cut in the nation's corporate tax rate starting in the next fiscal year to boost an economy that is showing signs of contraction. "I've instructed ministers to lower the corporate tax by 5% to lift up the economy and beat deflation," Kan told reporters in Tokyo. (Source: Bloomberg)

20101216 0952 Malaysia Corporate News.

TNB's capital expenditure may rise to RM6.5b. Tenaga Nasional Bhd's (TNB) capital expenditure (capex) for fiscal years ending Aug 31, 2011 and 2012 will remain between RM4.2b and RM4.5b but could rise to RM6.5b in 2013 as additional funds will be needed to complete its three new power plants. The plants include the Manjung coal-fired plant and two hydro plants in Hulu Terengganu and Ulu Jelai in Pahang. (Source: The Star)

AmBank: AmIslamic Bank to expand into two Asian countries. AmIslamic Bank Bhd plans to set up operations in two Asian countries next year as part of its overseas business expansion plan. The bank aims to increase its customer base by an additional 200,000. (Source: Bernama)

Proton: Two more concept cars to hit production line. Another two of Proton Holdings Bhd's five "Pahlawan" concept and customised cars could turn into production models and enter the market next year. They are the Tuah (to replace the existing Persona) and the Lekiu crossover (a mini SUV). Currently, two of the Pahlawan series are already existing production models namely Kasturi (facelifted Saga) and Jebat (Inspira). (Source: Business Times)

Renewable Energy: Tariff system mooted. A special tariff system to speed up the generation of renewable energy will be implemented under the Renewable Energy Bill 2010. Also, a feed-in tariff system that supplies line connection points for the distribution of renewable energy would be established. (Source: The Star)

Autos: Plan on electric vehicles to go to Cabinet. A completed study on the rollout plan for the Electric Vehicle Infrastructure Roadmap will be sent to the Cabinet for approval by end of January. This is to make Malaysia an attractive destination for electric vehicle makers. (Source: The Star)         

IJM Land, MRCB extend validity of MoU
IJM Land and Malaysian Resources Corp (MRCB) yesterday agreed to extend the validity of the memorandum of understanding for their proposed merger to 29 Dec this year. They were still in the midst of finalizing the terms and conditions of a definitive merger agreement, IJM and MRCB said in their announcements to Bursa Malaysia yesterday. (BT)

Singapore's DBS buys RBS' China ops
DBS Group, Southeast Asia's biggest lender, agreed yesterday to take over Royal Bank of Scotland's retail and commercial businesses in three major Chinese cities, as it accelerates expansion in the world's second-biggest economy. The agreement ends more than a year of speculation over who will acquire RBS' China assets, with rivals including HSBC Holdings plc, Standard Chartered and Australia and New Zealand Banking Group having all been identified by media as potential buyers. But the arrangement between RBS and DBS does not involve any cash investment, transfer of outlets or business licences. (BT)

CCM Biopharma in pact with South Korean biological firm
CCM Biopharma SB, a wholly owned subsidiary of CCM Pharmaceuticals SB, has entered into a collaboration with South Korea’s TS Corporation to manufacture biological products for the domestic and Asean market. One of the products identified is Erythroprotein (EPO), a hormone produced by kidneys which regulates red blood cell production and is also a prescription drug used to treat anaemia. Under the deal, CCM Biopharma would undertake commercialization activities of biological products including EPO. (Financial Daily)

RHB, Sumitomo sign MoU
RHB Capital’s wholly owned subsidiary, RHB Bank, has entered into a memorandum of understanding (MoU) with Sumitomo Mitsui Banking Corp (SMBC), in line with its objective of becoming a major player in the banking industry. “RHB sees this MoU as one of the many proactive steps it is taking in enhancing its local and global strategic economic network,” it said in a statement yesterday. “The alliance will assist RHB, together with its respective subsidiaries and related companies, in strengthening its position in the Japanese business segment and also in establishing a stronger foothold in the international arena as part of the RHB banking group’s strategy for business expansion with ever deepening economic ties between Japan and Malaysia.”(StarBiz)

DRB-HICOM signs MoU with Russian truck manufacturer
DRB-HICOM has signed a memorandum of understanding (MoU) with the Kamaz Group, the largest automobile corporation of the Russian Federation, to look into the possibility of manufacturing and assembling selected Kamaz heavy duty trucks for the Malaysian and Asean markets. “This MoU will pave the way for the feasibility and a detailed costing study as well as the models of Kamaz truck suitable for this region,” said DRB-HICOM group managing director Datuk Seri Khamil Jamil in a statement yesterday. (StarBiz)

DiGi, Celcom Axiata may ink tie-up next month
DiGi.Com chief executive officer Henrik Clausen believes the company will be able to ink a definitive agreement on network collaboration with Celcom Axiata Bhd next month and this tie -up will help both companies save over RM150mil each yearly. “We have made good progress and I have a pretty good feeling this will happen in January,'' he told StarBiz in an interview. Both Celcom and DiGi had in June entered into a memorandum of understanding (MoU) to collaborate in various areas to save cost. The MoU is to focus on sharing in three areas: operations and maintenance; transmission and site sharing; and radio access network. They were scheduled to ink a definitive agreement by year-end but announced a three-month extension last week to hammer out the details. (StarBiz)

Bursa to delist LCL
Interior fit-out specialist LCL Corp risks being delisted this month if it fails to submit an appeal to the stock exchange by 22 Dec. In a statement to the exchange LCL said Bursa Malaysia has written to the company informing of the suspension of trading in LCL shares on 23 Dec before a delisting on 27 Dec. Bursa Malaysia will reconsider LCL’s delisting if the company appealed to the regulator by 22 Dec. LCL’s fortunes grew in tandem with Dubai’s real estate boom in recent years. However, its financials deteriorated on the back of debt crisis in the emirates, leading to defaults on its loans. LCL has debt obligations of close to RM400m, according to its latest financials. (Financial Daily) 

MAS: Firefly airline plans four new hubs. Firefly plans to set up at least four new hubs for its jet operations within the next two years. This excludes KL International Airport (KLIA) where it would begin its jet services from Jan 15 next year. The four new hubs will be established at Kota Kinabalu (KK), Kuching, Senai and Penang. (Source: The Star)

Starhill REIT: YTL disposes properties to Starhill REIT. YTL Corp Bhd, via its units, will dispose nine of its hospitality-related properties to Starhill Real Estate Investment Trust (Starhill REIT) for RM1b. The properties disposed are Cameron Highlands Resort, Hilton Niseko, Vistana Penang, Vistana Kuala Lumpur, Vistana Kuantan, The Residences at The Ritz-Carlton, Kuala lumpur, The Ritz Carlton Hotel, Kuala Lumpur, Pangkor Laut Resort and Tanjong Jara Resort. Starhill would lease the properties to the respective vendors/leases for 15 years, with an option to renew for a further term of 15 years. The lease payments for the properties are fixed and include a 5% step-up rate every five years. (Source: Bernama)

Autos: BMW unveils another locally assembled model. BMW Malaysia Sdn Bhd has added the contemporary sport-centric BMW X1 to its stable of locally assembled cars. The model would be assembled in Kulim, along with BMW 3 Series and BMW 5 Series that are currently assembled there. (Source: The Star)

20101216 0933 Renewables Energy Related News.

MUMBAI, Dec 15 (Reuters) - India's Reliance Power  said on Wednesday its wholly owned unit has received a letter of intent from NTPC Vidhyut Vyapar Nigam for the purchase of 100 megawatts of solar power.

VANCOUVER, Dec 14 (Reuters) - Canada's budding renewable power sector has a new kid on the block, sporting a well-known name, deep-pocketed investors and ambitious expansion plans.
Sprott Power Corp, formed under the wing of veteran Bay Street asset manager and investment bank Sprott Inc , said on Monday it plans to buy private wind energy developer Sky Generation for C$28 million ($28 million).

BANGALORE, Dec 14 (Reuters) - SolarReserve LLC, a solar energy project development firm, said Tuesday it received environmental permits from Arizona for its proposed 150-megawatt Crossroads solar thermal power plant.
The company said the project, expected to cost about $650 million, would be able to store about 10 hours of solar energy and generate power on demand, even after the sun goes down.

BERLIN, Dec 14 (Reuters) - Germany's main centre-left opposition parties have backed calls to make further cuts in support for new solar power installations, which may help the government to bring forward reductions in aid.
Both the environmentalist Greens and Social Democrats (SPD), who enacted legislation under ex-chancellor Gerhard Schroeder that created the basis for a boom in solar investment, said they were open to paring back assistance the industry receives.

SOFIA, Dec 14 (Reuters) - South Korea's SDN Company launched on Wednesday a 150 million euros ($201.2 million) investment into a 42-megawatt solar energy park in central Bulgaria, the eastern European country's energy minister said on Tuesday.
The park, the biggest photovoltatic energy asset to be built in the Balkan country, is expected to become operational in 2012. It will help Sofia meet its target to boost the share of renewable energy to 16 percent of its total energy consumption by 2020, Energy Minister Traicho Traikov said.

Dec 14 (Reuters) - China's Yingli Green Energy  agreed to sell 220 megawatts (MW) of photovoltaic (PV) modules to Germany-based S.A.G. Solarstrom AG for three years, starting next year.
The contract suggests that the European solar equipment market remains robust though Germany cut subsidies earlier this year and Italy and Czech Republic may follow suit.

SEOUL, Dec 14 (Reuters) - The energy unit of South Korea's POSCO  said on Tuesday that it plans to build the world's biggest solar power plant with capacity of 300 megawatts in the United States by 2014.
The unlisted affiliate POSCO Power will form a joint venture with Sustainable Energy Capital Partners (SECP), a U.S., California-based developer of renewable energy projects, to construct the plant in Boulder City, Nevada, with a goal to supply solar power to 60,000 households in Nevada, POSCO Power said in a statement.

HOUSTON, Dec 13 (Reuters) - Texas set a record for wind-power output over the weekend even as wind-farm expansion slows, the state grid operator said on Monday.
The amount of electricity produced from wind farms early on the morning of Dec. 11 set a record at 7,227 megawatts, more than 76 percent of the 9,467 MW of installed wind capacity in the Electric Reliability Council of Texas (ERCOT).

WASHINGTON, Dec 10 (Reuters) - The compromise tax package unveiled by Senate Democrats late Thursday includes a one-year extension of a popular renewable energy grant program, which supporters say is vital for the clean energy sector.
The potential extension of the program, which allows solar, wind and other renewable companies to receive cash grants in lieu of tax credits, was cheered by green energy groups.

FRANKFURT, Dec 10 (Reuters) - German households are becoming unlikely competitors to giant utilities such as E.ON AG  and RWE AG , as the rapid growth of solar generation grabs market share and pushes down peak power prices.
The German support scheme for solar power facilities has been so successful that households with solar panels on their roofs are set to take a significant share of the country's power market, except during winter, at the expense of large providers.

BERLIN, Dec 10 (Reuters) - Germany's BSW solar industry association lobby will constructively accompany considerations to move forward some solar support cuts to mid-2011 from 2012, BSW managing director Carsten Koernig told Reuters on Friday.
Koernig said it would not be easy for some German companies but the association is interested in a sustained support system for the fast-growing sector and opposed to any cap.

MILAN, Dec 10 (Reuters) - Italy's biggest renewable energy company, Enel Green Power (EGP) , will get a 440 million euro ($580.8 million) loan from the European Investment Bank (EIB) to help it expand in Italy, the company said on Friday.
The 20-year loan, which may be raised to 600 million euros, will help EGP fund installation of 840 megawatts of new wind and photovoltaic capacity, EGP , controlled by Italy's biggest utility Enel , said in a statement.

20101216 0932 Biofuels Related News.

WASHINGTON, Dec 14 (Reuters) - U.S. Senate leaders have not decided whether to allow a vote on an amendment to cut the U.S. ethanol tax credit by 20 percent that would be part of a massive tax bill, said Senate aides on Tuesday.
The current 45-cent a gallon tax credit along with other biofuels incentives will expire on Dec. 31 unless the Senate and House of Representatives agree to extend them. The tax bill would extend the subsidies through 2011.

SAO PAULO, Dec 14 (Reuters) - Brazil's center-south 2010/11 cane crush will fall short of expectations after dry weather hurt yields, but the high quality of cane boosted the region's sugar output, cane industry association Unica said on Tuesday.
The region is now expected to crush less than 560 million tonnes in the season, down from the 570.2 million tonnes estimated in August.

HAMBURG, Dec 14 (Reuters) - Leading German biodiesel producer EOP Biodiesel AG  said on Tuesday it had declared insolvency.
The company said in a statement it had been unable to reach agreement with its banks about finance.
EOP produces 132,000 tonnes of biodiesel annually at a plant in Pritzwalk in eastern Germany. In October, the company stopped biodiesel production following damage to a gear unit at its oil mill.

BEIJING, Dec 14 (Reuters) - China has signed an agreement to allow imports of tapioca or cassava from Cambodia for use as a food starch as well as for ethanol production.
The agreement was signed during Cambodia Prime Minister Hun Sen's visit to Beijing, China's General Administration of Quality Supervision, Inspection and Quarantine said in a brief statement.

RIO DE JANEIRO, Dec 11 (Reuters) - Brazilian state oil company Petrobras  has made an offer of about 3 billion reais ($1.76 billion) to buy 40 percent of ethanol producer ETH in an effort to become the leading player in the biofuels sector, a newspaper reported on Saturday.
Petrobras' biofuels arm, Petrobras Biocombustivel, said in a statement that it was not in talks with ETH, a unit of infrastructure firm Odebrecht.

SAO PAULO, Dec 10 (Reuters) - Brazil's ethanol exports will remain sluggish in 2011 even if a U.S. import tariff on the fuel, which has long been criticized by Brazilian producers, expires by year-end, analysts and industry officials said.
A modest rise in cane crop output if any next season and high sugar prices will limit ethanol output, they said.

SAO PAULO, Dec 10 (Reuters) - Brazil's sugar cane mills, burned badly two years ago by a costly over-expansion driven mainly by expectations of soaring ethanol demand, say they won't be fooled again.
This year, companies in the world's largest sugar producer are taking a far more cautious approach to growth as prices rallied to a 30-year high in February before halving -- and, within month, surging anew to yet another peak. 

20101216 0931 Global Market News.

Oil prices under pressure from Euro zone debt concerns
PERTH, Dec 16 (Reuters) - Oil prices were steady to lower as the prospect of a downgrade to Spain's sovereign credit rating sparked euro-zone debt concerns,  out weighing positive U.S. economic data.
"Any positive data that comes out of the U.S. is sidetracked by negative data coming out of the Euro zone," David Taylor, an analyst at CMC Markets in Sydney.

Soy ticks higher; wheat steadies after gains
SINGAPORE, Dec 16 (Reuters) - U.S. soybean futures edged up while corn and wheat were little changed in hushed Asian trading on a dearth of fresh leads and a steadier dollar.
"I'm looking for the dollar to remain relatively well bid and hopefully that would be a good thing because that will take some heat out of the grain market," said Jonathan Barratt, managing director at Commodity Broking Services in Sydney.

China 2010 corn output revised up to record -CNGOIC
BEIJING, Dec 16 (Reuters) - China's corn output in 2010 was estimated at a record 172.5 million tonnes, a 5.2 percent increase over last year, the latest estimate by the China National Grain and Oils Information Centre (CNGOIC) showed.
The higher output would leave China, the world's second-largest consumer, with a surplus of 7.5 million tonnes next year based on median consumption figure estimated by several institutions which could mean that China may not import large volumes of corn from abroad.

Argentina raises wheat harvest, sowings forecast
BUENOS AIRES, Dec 15 (Reuters) - Argentina's 2010/11 wheat harvest is expected to come in at 13 million tonnes, higher than previously expected due to good yields and a bigger sowing area, the Agriculture Ministry said on Wednesday.
The ministry had previously estimated wheat output at 12.5 million tonnes.

OIL: Oil prices lower as Spain debt concerns weigh
PERTH, Dec 16 (Reuters) - Oil prices dipped on Thursday as concerns about Spain's sovereign debt rating outweighed data showing a much larger than expected drop in U.S. crude inventories.
Ratings agency Moody's put Spain's debt on review for a possible downgrade on Wednesday, highlighting concerns over a funding crunch next year and sending bank shares sliding. The ratings agency said it did not expect Madrid to have to follow
Greece and Ireland into taking a European Union bailout, but added that it could not rule out that scenario.

COMMODITY MARKETS: Oil up on stockpiles; exports, weather drive grains
NEW YORK, Dec 15 (Reuters) - A sharp drop in U.S. crude stockpiles lifted oil prices and strong exports and weather woes boosted wheat and soy markets, but commodities' gains were limited on Wednesday by a stronger dollar.
The dollar's surge against the euro after Moody's said it may downgrade Spain's debt rating led to a selloff in gold and copper, forcing them to retreat from recent record highs. Investors typically like commodities when the dollar is down as hard assets then become a hedge against the currency and inflation.
GLOBAL MARKETS: Euro weak on Spain credit warning, stocks drop
NEW YORK, Dec 15 (Reuters) - Prospects for a credit downgrade in Spain, combined with upbeat U.S. economic data, led to a sharp downturn for the euro versus the U.S. dollar on Wednesday, while Wall Street shed gains in a late sell-off.
"We had a lot of very positive data today, but we still have persistent euro-zone concerns, which is creating this tussle in the market," said Judy Moses, a San Francisco-based portfolio manager at Evercore Wealth Management.

Agrium To Sell Commodity-Management Assets To Cargill (Source: CME)
Agrium Inc. has reached a deal to sell a majority of the AWB Ltd.'s Australian commodity-management business to Cargill Inc., which gains a leading position in one of the world's largest wheat-export markets. Agrium, a Canadian fertilizer and pesticide company, completed a A$1.24 billion purchase of Australian wheat exporter AWB earlier this month. As part of the acquisition, Agrium had said it was looking at options for the AWB's grain-handling and trading business. Agrium estimates it will receive A$870 million from the sale. The purchase price will be the net asset value of the acquired businesses at closing plus a premium. The price will be payable in cash, and Cargill will be assuming debt from the acquired business. The deal is likely to make Cargill, a U.S.-based agribusiness giant and among the world's largest private companies, the top wheat exporter in Australia, according to data from last year.
Australia is one of the world's top wheat exporters, with the U.S. Department of Agriculture projecting the country will account for 12% of global wheat exports in the current marketing year. AWB, which is the former Australian Wheat Board, had monopoly control over the nation's wheat exports until the government abolished the system in 2008. Cargill's purchase should push the company's share of the wheat export market well past competitor GrainCorp Ltd., one of Australia's last surviving major agribusinesses. GrainCorp had made what appeared to be a winning bid to purchase AWB in July, but was trumped in August by Agrium. An Australian government report found that AWB accounted for 27% of the bulk wheat exported in 2009. Cargill Australia was the third largest exporter at 12%, followed by GrainCorp at 11%.

Soybeans rise on Argentina crop outlook, wheat flat
SINGAPORE, Dec 15 (Reuters) - U.S. soybean futures rose on  Wednesday as dry weather in major producer Argentina raised  concern about its crop, while wheat prices steadied after  sharp losses in the previous session.
"Higher exports out of the U.S. and some lingering concern  about the South American crop are enough to keep the soybean  market well supported," said Brett Cooper, senior manager for  markets at FCStone Australia.

Moody's warning on Spain hits euro, Fed weighs
LONDON, Dec 15 (Reuters) - A downbeat assessment of the U.S. recovery from the Federal Reserve weighed on global equities on Wednesday while European shares and the euro came under pressure from a threat to downgrade Spain's debt.
"This just focuses attention back on Spain," he said, referring to the rolling euro zone debt crisis.  

Droughts, floods, snow and cold hit global commodities
SYDNEY, Dec 15 (Reuters) - Droughts and deluges in  Australia, snow in Europe and cold snaps in the United States  are pushing up prices of a range of commodities from sugar to  heating oil and soybeans.
Australia typically ranks as second in the league of  global sugar exporters after Brazil, but rains have forced its  top sugar exporter Queensland Sugar Ltd (QSL) to consider  buying raw sugar from its South American rival and from  Thailand to keep up with its export commitments to sugar buyers.

Japan business mood worsens, BOJ seen holding fire
TOKYO, Dec 15 (Reuters) - Japanese manufacturers' business sentiment worsened for the first time in nearly two years this quarter but the gloom was not as severe as expected, giving the Bank of Japan breathing room before pondering its next move.
But big manufacturers expect conditions to deteriorate over the next three months, the BOJ's closely watched tankan survey showed on Wednesday, keeping up pressure on the central bank to support the fragile economy with its ultra-easy monetary policy.

Fed cautious on recovery, sticks to bond plan
WASHINGTON, Dec 14 (Reuters) - The U.S. Federal Reserve on Tuesday offered only a cautious nod to the economy's improving prospects as it put a spotlight on lofty unemployment and reaffirmed its commitment to buy $600 billion in bonds.
The Fed noted household spending was increasing moderately and characterized the U.S. expansion as "continuing," a modest upgrade from its November description of the recovery as "slow."

China warns of power and energy shortages this winter
SHANGHAI, Dec 15 (Reuters) - Some parts of China could face an intermittent shortage of crucial coal, oil, power or gas supplies crucial for heating during the winter months, China's top economic planning body said in a statement on Wednesday.
Most of China's resource production bases, including coal and and oil, are either concentrated in the northern or western provinces, away from the key demand areas located in the southern and eastern region, such as Shanghai and Guangdong.

PRECIOUS-Gold slides below $1,390/oz as dollar firms
LONDON, Dec 15 (Reuters) - Gold eased below $1,390 an ounce in Europe on Wednesday as the dollar rose broadly, with the euro coming under selling pressure as ratings agency Moody's put Spain's AA1 rating on review for a possible downgrade.
Underlying demand for the metal as a haven from risk was, however, preventing a larger correction, analysts said.

FOREX-Spain rating warning hits euro, buoys Swiss franc
LONDON, Dec 15 (Reuters) - The euro fell against the dollar and hit a record low versus the Swiss franc on Wednesday after Moody's said it may downgrade Spain's debt rating, refocusing  attention on contagion risks from the euro zone crisis.
The Swiss currency gained as worries about debt problems in some European countries encouraged investors to reduce exposure to riskier euro zone assets and seek safer alternatives.

20101216 0930 Soy Oil & Palm Oil Related News.

Soy product futures ended mixed, with soymeal rallying on supportive outlooks for increased protein feed demand resulting from cold, snowy central U.S. weather conditions, analysts said. Soyoil futures stumbled for the second consecutive day, succumbing to profit taking pressure as traders booked profits after prices rallied in the past month, analysts said. However, supportive export demand and optimistic outlooks for the reinstitution of U.S. biodiesel tax credits limited price pressure. CBOT Jan soyoil ended 0.89 cents or 1.6% lower at 54.20 cents per pound, and Jan soymeal traded $3.90 or 1.1% higher at $346.10 a short ton. (Source: CME)

Palm eases from 33-mth highs on overseas demand, crude
KUALA LUMPUR, Dec 15 (Reuters) - Malaysian palm oil futures retreated from near three-year highs sapped by weaker overseas demand and crude oil prices, but  losses were capped by tight supply concerns."The market reacted to the poor export figures, as we  could not expect good demand with current expensive palm  prices," said a trader in Kuala Lumpur.

Global Oct/Dec soymeal exports at record-Oil World 
HAMBURG, Dec 14 (Reuters) - Global October/December 2010 soymeal exports are likely to reach a record for the time of year due to booming demand, Hamburg-based oilseeds analysts Oil World forecast on Tuesday.
Global exports of soymeal for the period will reach 15.5 million tonnes, up by 3.1 million tonnes on the same time in 2009.

Oil World cuts forecast of Argentine soybean crop
HAMBURG, Dec 14 (Reuters) - Argentina is likely to harvest 50.50 million tonnes of soybeans in early 2011, down from 54.4 million tonnes in early 2010, Hamburg-based oilseeds analysts Oil World forecast on Tuesday.
This was 1.5 million tonnes down on its previous estimate in November and follows dry weather in the country.

La Nina threatens Argentine crops, may return
BUENOS AIRES, Dec 14 (Reuters) - La Nina, which is raising concerns over Argentina's corn and soy crops, could hit the South American country again next season and cause even worse damage to yields, a climate specialist said on Tuesday.
Argentina is one of the world's leading exporters of soy and corn, but dry weather linked to the La Nina climate event is fueling concerns that yields could suffer -- especially as corn plants enter key development stages.