Wednesday, January 5, 2011

20110105 1842 FCPO EOD Daily Chart Study.

FCPO closed : 3808, changed : -80 points, volume : higher.
Bollinger band reading : correction range bound upside biased.
MACD Histrogram : rising, buyer in control.
Support : 3800, 3770, 3750 level.
Resistance : 3870, 3920, 4000 level.
Comment :
Pullback correction FCPO closed the day recorded substantial loss down 2.06% with higher nearly double volume transacted as soy oil and crude oil futures prices continue to eased lower with US Dollar rebounding higher.
Daily chart formed a doji down bar candle corrected downward after price touched the upper Bollinger band resistant level yesterday suggesting a correction range bound upside biased market development.
When to buy : buy at support or weakness with larger cut loss and profit target.
When to sell : sell at resistant or strength with quick cut loss and profit target.

20110105 1818 FKLI EOD Daily Chart Study.

FKLI closed : 1561, changed : +11.5 points,  volume : higher.
Bollinger band reading : upside biased with possible pullback.
MACD Histrogram : rising, buyer extending power.
Support : 1560, 1550, 1540 level.
Resistance : 1570, 1580, 1590 level.
Comment :
Bullish sentiment FKLI continue to surged higher ground recorded another big gains with increasing volume changed hand while regional market ended mixed.
Daily chart formed a wide up doji bar candle after market opened lower and corrected downward and recovered surging to a new all time high followed by selling pressure due to profit taking press price lower but managed to closed above upper Bollinger band level suggesting another potential pullback correction to take place with the reading remained upside biased.
When to buy : buy at support, weakness or break up with larger cut loss and profit target.
When to sell : sell at resistant or strength with quick cut loss and profit target.

20110105 1654 Breaking News On Palm Oil

Palm Oil Drops Most in 3 Weeks After Rising Above Soybean Oil (Source: Bloomberg)

Palm oil dropped the most in three weeks after it became more expensive than soybean oil for the first time in more than three years, increasing the appeal of the rival oil for use in food and fuels.

March-delivery futures fell as much as 2 percent to 3,810 ringgit ($1,242) a metric ton, the most since Dec. 17, and traded at 3,830 ringgit on the Malaysia Derivatives Exchange at 3:04 p.m. local time. The contract reached a 34-month high yesterday on speculation inventory in Malaysia, the second- biggest producer, may have dropped to a five-month low in December.

Soybean oil traded at a discount of $14.30 a ton to palm oil yesterday, the first time since June 2007 that the oil has been cheaper than the tropical commodity. Soybean oil traded at a premium of $4.3 a ton today, compared with a 12-month average of $85.35, according to data compiled by Bloomberg.

“There will be an incentive for buyers to look at soybean oil as it’s trading at only a marginal premium to palm oil,” said Arhnue Tan, an analyst at ECM Libra Capital Sdn.

Palm oil futures have surged 67 percent in the past six months on concern that cooking-oil supplies may tighten as dry weather in Argentina weakened the crop in the largest soybean- oil producer and rains damaged oil-palm harvests in Indonesia and Malaysia. Vegetable-oil reserves are forecast to decline to a seven-year low at the end of this season, according to the Economic Research Service of the U.S. Department of Agriculture.

Oilseeds have climbed since July on “unsustainably high” consumption, and prices may gain more in the next three months, especially if the outlook for the soybean crop in Argentina continues to drop, according to industry researcher Oil World.

‘Major Variable’

“Supply shortage of oilseeds and primarily of oils and fats is likely to last well into 2011,” Oil World said. “The extent of crop losses in Argentina is currently a major variable to watch.”

Palm oil output in Malaysia fell to the lowest in five months in November and stockpiles shrank for the first time in four months, the nation’s palm oil board said Dec. 10.

“The stockpiles in Malaysia will decline further with a pick-up in demand and because of lower production,” said Govindlal G. Patel, director of GGN International, an Indian commodity brokerage. “Shortage of palm oil will be more than soybean oil and that will support prices.”

Futures may cross 4,000 ringgit in the next one month supported by lower output and rising demand, ECM Libra’s Tan said yesterday. Prices may average 2,800 ringgit, she said.

March-delivery soybean oil fell as much as 0.5 percent to 56.55 cents a pound, and traded at 56.82 cents at 3:08 p.m. in Singapore. The oil declined 1.5 percent yesterday as corn, soybeans and gold dropped on bets that a global rebound in the economy will draw more funds into the dollar and equities.

Palm oil for September delivery on the Dalian Commodity Exchange declined 1.3 percent to 9,794 yuan ($1,479) a ton and soybean oil for delivery in the same month shed 0.9 percent to 10,512 yuan a ton.

CME Group Inc.’s March palm oil contract, pegged to the Malaysian benchmark price, gained as much as 2.1 percent to $1,254.25 a ton.

-Malaysia''s end-December palm oil inventories probably fell 2.5% from a month earlier to around 1.60 million metric tons due to a slump in exports and lower output, traders and planters said Wednesday. Most are estimating that output in December dropped 10% from November''s level of 1.46 million tons.

20110105 1455 Global Economics Related News.

The Swiss central bank confirmed Wednesday it has excluded Irish government debt from a list of assets considered eligible as collateral for its repo deals – operations under which it lends money against collateral.The move, which was first reported by Irish blogger Lorcan Roche Kelly, happened in December after major credit rating agencies cut Ireland's rating below 'A'.

Australia: RBA’s McGauchie says flood impact may be significant
The worst flooding in half a century in Australia’s northern state of Queensland may have a “significant impact” on the nation’s economy as exports are interrupted, said central bank board member Donald McGauchie. Record rainfall triggered flooding across an area of Queensland the size of France and Germany, forcing towns to be evacuated, closing mines and spoiling crops. The state is Australia’s largest coal exporter and accounts for about 20% of the nation’s AUD1.28 trillion (USD1.29trn) economy. (Bloomberg)

China: Yuan gain to slow in 2011, top forecasters say: china credit
The yuan’s appreciation may slow this year after the currency strengthened beyond 6.6 per dollar for the first time in 17 years, as China seeks to stem inflows that may fuel inflation, the most-accurate forecasters for 2010 said. The yuan will advance 4.6% to 6.3 per dollar, after climbing 3.6% in just over six months, said Yen Ping Ho, the head of Asian foreign-exchange strategy for JPMorgan Chase & Co. in Singapore, whose 6.58 forecast was closest to the 31 Dec 2010 close among 21 analysts surveyed by Bloomberg a year ago.(Bloomberg)

EU: European inflation accelerates more than forecast
European inflation accelerated more than economists estimated in December on surging energy prices, exceeding the European Central Bank’s limit for the first time in more than two years. Euro-area consumer prices rose 2.2% in December from a year earlier after increasing 1.9% in November, the European Union statistics office in Luxembourg said today. That’s the highest rate since October 2008 and above the 2% median forecast of 21 economists in a Bloomberg survey. (Bloomberg)

US: Currency Carry Trade Losses May Bolster U.S. Dollar
Currency traders that seek profits by borrowing in nations with low interest rates to fund purchases in countries with higher yields are losing more money than at any time in at least a decade. The strategy lost 2.5% in 2010 as the dollar -- a favorite for financing the trades because of record low US rates -- appreciated, according to an index compiled by UBS AG, the world’s second-largest foreign-exchange trader. (Bloomberg)

U.S: Construction spending rose in November for third month, boosted by funding for homebuilding and federal government projects. The 0.4 %MoM increase followed a 0.7% MoM gain the previous month. (Source: Bloomberg)

U.S: Fed officials said recovery insufficient to alter QE2. "While the economic outlook was seen as improving, members generally felt that the change in the outlook was not sufficient to warrant any adjustments to the asset-purchase program, and some noted that more time was needed to accumulate information on the economy before considering any adjustment," the Fed said in minutes of its Dec. 14 policy meeting. (Source: Bloomberg)

U.S: Orders to factories increase in November. The 0.7% MoM increase in bookings topped the median forecast of economists surveyed by Bloomberg News which called for a 0.1% MoM drop. Orders for capital goods like computers rebounded after falling in October. (Source: Bloomberg)

Germany: Unemployment unexpectedly rose in December for the first time in 17 months as the coldest weather in more than 40 years led companies to shed staff. The number of people out of work rose a seasonally adjusted 3,000 to 3.15 million, the Nuremberg-based Federal Labor Agency said. (Source: Bloomberg)

U.K: Manufacturing in December expands at fastest pace since 1994. A gauge based on a survey of companies by Markit Economics and the Chartered Institute of Purchasing and Supply rose to 58.3 from a revised 57.5 in November. A measure above 50 indicates expansion. (Source: Bloomberg)

France: Consumer confidence unexpectedly fell for the first time in five months in December as consumers turned pessimistic about their personal finances. Sentiment declined to minus 36 from a revised minus 33 in November, Paris based national statistics office Insee said in a statement. (Source: Bloomberg)

Spain: Registered unemployment fell for the first time in five months in December. The number of people registering for jobless benefits fell by 10,221, or 0.25%, from November to 4.1 million, the Labor Ministry in Madrid said in an emailed statement. (Source: Bloomberg)

Greece: State revenue in 2010 rose 5.4% on an annual basis to EUR51.1b (USD68.4b), missing a revised target by about EUR280m, a finance ministry official said. In December revenue increased 10.6% to EUR5.75b, said the official, who declined to be identified by name because the data haven't been released officially. The ministry
will release preliminary data on Jan.10. (Source: Bloomberg)

Thailand: Inflation accelerated in December for the first time in five months, adding to the case for the central bank to raise borrowing costs further. An index of consumer prices rose 3% from a year earlier after climbing 2.8% in November, the Ministry of Commerce said. (Source: Bloomberg)

20110105 1454 Malaysia Corporate Related News.

TM, Axiata: To probe alleged payments. Telekom Malaysia's Board (TM) has approved the formation of a Board Sub-Committee of the Board Audit Committee (BAC) to conduct an independent and comprehensive internal investigation into the alleged payments received by TM employees from Alcatel-Lucent SA. As the period under investigation concerns the previous integrated TM Group, TM is working closely with Axiata Group Berhad (Axiata) to extend all necessary cooperation with the relevant parties and authorities. TM and Axiata have jointly appointed KPMG Corporate Services Sdn Bhd and Shearn Delamore & Co as forensic accountant and legal adviser respectively to assist in the internal investigation. (Source: Bursa Malaysia)

Media: Asia Media IPO oversubscribed by 21.5x. Asia Media Group Bhd, a digital out-of-home Transit TV company, saw the public portion of its initial public offering (IPO) oversubscribed by 21.46 times. At the close of the public offer on Dec 29, 2010, a total of 5,119 applications for 179.6m shares were received for the 8.0m made available to the Malaysian public. Asia Media's IPO involves an issuance of 98m new shares at 23 sen each, and the company is en-route to being listed on the Ace Market of Bursa Malaysia on Jan 11. (Source: The Star)

SME: Additional RM3b allocation for SMEs to be disbursed immediately. Disbursement of the additional RM3b Working Capital Guarantee Scheme (WCGS) allocation under 10th Malaysia Plan (10MP) will commence immediately. The scheme was first introduced in the second stimulus package in March 2009. It was fully utilised by year-end, despite being increased from RM5b to RM7b. In view of the encouraging response to the scheme, the Government provided an additional RM3b under the 10MP, bringing the total disbursement to RM10b. (Source: The Star)            

RON97 and kerosene up by 10 sen from today
The price of RON97 petrol has increased by 10 sen to RM2.40 a litre from today while the price of kerosene has also gone up by 10 sen to RM2.50 a litre. The price of RON95 remains at RM1.90 per litre. Petrol Dealers Association of Malaysia president Datuk Hashim Othman said the confirmation came from petrol companies at about 9pm yesterday. “The world price of oil has gone up. The petrol companies have averaged out the prices globally,” he said last night. Hashim added that the petrol companies would update prices at petrol kiosks nationwide remotely via satellite link simultaneously. RON97 last increased by 15 sen to RM2.30 on 1 Dec 2010. (The Star)

GUH unit in water treatment plant deal
GUH Holdings’ wholly-owned GUH International (HK) Pte Ltd (GUHHK) yesterday signed a preliminary agreement with the Development General Company of Jiangsu Gaochun Economic Development Zone in China to build a 100 million litres a day water treatment plant on a build-operate-transfer basis within the zone. The 180 million Renminbi project will be implemented in two phases and GUHHK will carry out feasibility studies on the project within six months, GUH said. The project will be funded through a combination of internally generated funds and borrowings to be arranged after the feasibility studies. (BT)

Bursa proposes new broking rules
Bursa Malaysia proposes to move towards a more self-governing framework for the local stockbroking industry in an effort to make it more vibrant and competitive. The regulator yesterday outlined 11 areas of focus in its 27- page consultation paper posted on its website for comment. Besides proposing to do away with restrictions on participating organisations' (POs) financing to clients, the review also allows for them to lend money to related corporations. This was previously prohibited in accordance with the guidelines on Chinese walls for dealers and future brokers by Securities Commission. The regulator is also moving for POs or stockbrokers to continue carrying out risk management, internal audit and compliance functions by using self-prescribed processes and controls, best suited to their business needs and risks. (BT)

Proton to finalise talks with OEM to set up assembly line in India
Proton Holdings intends to finalise discussions with a global original equipment manufacturer (OEM) within this quarter to set up contract assembly manufacturing operations in India. “We know India is an important market but to be successful, we need to work with a local OEM (in India). We have identified a company and have had many discussions,” said group managing director Datuk Syed Zainal Abidin Syed Mohamed Tahir at the launch of the company's Asia-Pacific Rally Championship team yesterday. He said Proton was hoping to engage in contract assembly manufacturing via a joint venture effort with the OEM. “Another aspect is in terms of sales and marketing. We hope to incorporate our own subsidiary that would work with a local partner to distribute cars in India. All of this will hopefully be finalized by the first quarter of this year.” (StarBiz)

Tomei to sell KL land to Oasis
Jeweller Tomei Consolidated will dispose of six pieces of land in Kuala Lumpur to Oasis Properties Sdn Bhd for a total of RM4.6mil as part of its on-going cost optimisation and business streamlining strategy, The disposal will allow the jeweller to re-organise its resources and focus on its core business, it told Bursa Malaysia. In six separate announcements yesterday, Tomei said several of its wholly-owned units entered into six sale and purchase agreements on Dec 27 to sell its freehold land. (StarBiz)

MAS: Firefly eyes one million passengers at KLIA. Fly Firefly Sdn Bhd, a unit of Malaysia Airlines, which will begin its operations at KL International Airport (KLIA) on Jan 15, aims to fly 1m passengers in and out of the airport this year. Its newly launched airport ticketing counter at the main terminal building of KLIA will help to reach the growth target and offer greater convenience to passengers. Meanwhile, passenger growth at the Skypark Terminal in Subang is expected to surpass 2m this year after growing to 1.5 m last year. (Source: The Star)

TNB: Aussie coal supply woes may affect power tariffs. Tenaga Nasional Bhd (TNB) is likely to be affected by higher coal prices following massive floods in Australia and this may strengthen its case for higher power prices. Coal prices for delivery in March have already risen to USD130 (RM398) per tonne from USD100 at the start of December last year. TNB purchases about 17% of its coal from Australia. Currently, about 40% of Malaysia's generation capacity comes from coal-fired plants. (Source: Business Times)

Construction: Ageing construction workers. The construction industry could face a shortage of local workers by 2017 given that 35.1% of industry personnel will be above 50 in seven years' time. The problem is further compounded by a declining number of people entering the sector as there are vast opportunities in other fields. (Source: The Sun)

E&U: Sarawak Hidro negotiating to sell power from Bakun dam to SEB. Sarawak Hidro Sdn Bhd is in advanced talks with Sarawak Energy Bhd (SEB) to sell power from the Bakun dam to the state utility firm. Negotiations would resume around Jan 20, and agreement on the sale and purchase of Bakun power is expected to be inked in May or July. (Source: The Star)

Plantation: RM4.4b allocation for oil palm replanting. Malaysia's oil palm industry will spend RM4.4b to replant approximately 365,000 hectares from 2011 to 2013. The government will pay RM1b to independent smallholders with 40 ha or less (this accounts for some 600,000ha of land throughout the country) to compensate for the loss of income from replanting. They are entitled to a one-off replanting payment of more than RM6,000 per ha and monthly payments of RM500 per household for two years. Private and government-linked plantation companies are expected to spend RM3.4b in replanting in the next three years. (Source: Business Times)

Market: Net foreign buy rebounds in Dec. Net foreign buying on Malaysian equities picked up in December after a slowdown since October. Net foreign buying increased to RM2.6b in December from RM0.9b in November. (Source: Bursa Malaysia)            

20110105 0852 Global Market Related News.

Oil extends decline towards $89 as dollar strengthens
SINGAPORE, Jan 5 (Reuters) - Oil fell for a second day on  Wednesday, extending the previous session's 2.4 percent drop,  as investor enthusiasm for commodities diminished with a  stronger dollar, following a sharp year-end rally in raw  material prices.
"Ninety dollars a barrel already has a very strong  economic picture built into the price," said Tony Nunan, a  risk manager with Tokyo-based Mitsubishi Corp.  

U.S. wheat falls to 1-1/2 week low on strong dollar
SINGAPORE, Jan 5 (Reuters) - U.S. wheat fell more than 1  percent to its lowest in one-and-a-half weeks,  while corn dropped half a percent to a two-week low as a  strengthening dollar weighed on the commodity markets.
"We saw a broad-based commodities selloff yesterday and the pressure is continuing today as the dollar is a bearish factor for commodities," said Ker Chung Yang, an analyst at Phillip Futures in Singapore.

OIL: Crude extends decline as commodities slide
SINGAPORE, Jan 5 (Reuters) - Oil fell for a second day on  Wednesday, extending the previous session's 2.4 percent drop,  as investor enthusiasm for commodities diminished following a  sharp year-end rally.
Tuesday's drop was the biggest single-day percentage loss since Nov. 16, when prices closed 2.97 percent lower.

NATURAL GAS: Natural gas ends up, cold offsets technical selling
NEW YORK, Jan 4 (Reuters) - U.S. natural gas futures ended up slightly on Tuesday as cold forecasts, particularly with much-below-normal temperatures seen for most of the country next week, offset technical selling after Monday's gains.
"The cold forecast is holding us up, but there's still a lot of gas out there," a New York trader said.

EURO COAL: Prices rise on Australia floods
LONDON, Jan 4 (Reuters) - Prompt physical coal prices rose  on record floods in Queensland, Australia which halted coking coal exports.
"The Australian floods are the talk of the market right now," said Emmanuel Fages, an analyst with Societe Generale in Paris.

COMMODITIES: Markets dive after heady year-end gains
NEW YORK, Jan 4 (Reuters) - Commodities crumbled on Tuesday, falling by their most in seven weeks, as energy, metals and agricultural investors took profit on the heady gains made on thin holiday volume over th
"We've had a nice run in the last two to three weeks and we can't go lock-step up every day," said Evan Smith, co-manager at the $850 million commodities-based Global Resources Fund at U.S. Global Investors. "You're always going to have some volatility in a bull market and we're still in a bull market."

GLOBAL MARETS: Commodities sink on profit-taking, US stocks slip
NEW YORK, Jan 4 (Reuters) - Commodity prices fell sharply on Tuesday as investors took advantage of record high prices to take profits, a move accelerated by a rally in the U.S. dollar.
"I think this is more of a healthy correction. The fear trade is backing off somewhat after gold has recently rallied on global economic anxiety," said Mark Luschini, chief investment strategist of Janney Montgomery Scott, a financial services firm managing $50 billion in client assets.

PRECIOUS-Gold dips as dollar firms, holds above $1,400/oz
LONDON, Jan 4 (Reuters) - Gold eased on Tuesday in the first trading day of 2011 on the London financial markets, coming under pressure from a firmer dollar, but investor concerns over debt and inflation continued to support the metal.
Expectations that the euro zone debt crisis could worsen, concerns over the potential for inflation in developing economies and an increased focus on the U.S. deficit are set to maintain investment demand for gold, analysts said.

FOREX-Euro up broadly as risk appetite improves
NEW YORK, Jan 4 (Reuters) - The euro rose broadly on Tuesday, hitting a three-week high versus the dollar, after upbeat euro zone and U.S. data boosted risk appetite, although gains could be temporary given doubts over the euro region's bond issuance.
Over the last few months, the euro has gained in times of increased risk-taking in the market, taking bids away from the safe-haven U.S. dollar.

Second year of top gains set high hopes for 2011
NEW YORK/LONDON, Dec 31 (Reuters) - Commodities head into 2011 with a second year of asset-beating gains that elevated oil and grains to their highest prices since the financial crisis and copper to a record.
And analysts say it is not over yet.
The commodities sector as a whole rose 17 percent in 2010 to extend last year's 23 percent growth, as measured by the Reuters-Jefferies CRB index. That outpaced the 13 percent rise in the S&P500 stock index  and 5 percent return in U.S. government bonds.

Asian, European car makers look to 2011 growth
PARIS/MILAN, Jan 3 (Reuters) - South Korean automakers predicted rising 2011 sales on U.S. and Chinese growth, while France's car market ended a negative 2010 on a high note, with drivers flocking to use scrapping bonuses before they ran out.
Carmakers are increasingly relying on growth in high-profile emerging markets like China, Brazil, Russia and India. The U.S. market is gradually recovering, but European markets including Spain and Italy showed December falls.

GLOBAL ECONOMY WEEKAHEAD-U.S. jobs trickle in. Whither workers?
WASHINGTON, Jan 3 (Reuters) - U.S. private employers have recorded 11 consecutive months of job gains, yet the number of people who are so discouraged that they have given up searching for work stands at an all-time high.
Friday's employment report is expected to show the pace of payroll growth accelerated last month after a disappointing showing in November. However, consumers' assessment of the job market deteriorated in December, according to the Conference Board's latest consumer confidence survey.

GLOBAL ECONOMY-December factory output accelerates in US, Europe
NEW YORK/LONDON, Jan 3 (Reuters) - Manufacturing in the United States and Europe accelerated in December, while growth in China and India slowed to more sustainable levels in another boost for the global economic outlook.
Purchasing managers' indexes showed manufacturing growth quickened in Europe and the United States, supported by surging new orders, while robust but slowing growth in India and China eased concerns about inflation and tighter monetary policy.

COLUMN-China hike could help risk assets elsewhere: James Saft
-James Saft is a Reuters columnist. The opinions expressed are his own-
HUNTSVILLE, Alabama, Dec 30 (Reuters) - China's Christmas day interest rate hike may prove to be bad for global growth but good, at least for a time, for risky assets.
From that perspective, the Chinese policy change could end up being a much-needed helping hand to Federal Reserve chief Ben Bernanke, who has engineered a policy partly aimed to boost economic growth through the false miracle of asset price inflation.

Australia Flooding Slows Wheat Harvesting, Shipments (Source: CME)
Heavy rains and flooding in Australia's northeastern Queensland state have stopped bulk wheat and sorghum exports and badly damaged summer crops including cotton, but further south in New South Wales and Victoria, harvesting, transport and export are currently not impeded, logistics provider GrainCorp Ltd. said. All rail-based accumulation of grains for export in Queensland has been halted, the company said, adding regular operations may not resume for up to two weeks. Accumulation of export cargoes by road is also affected, it said. "Nothing will be moving out of Queensland for a couple of weeks," GrainCorp's Corporate Affairs Manager, David Ginns, said by telephone. "We haven't been able to move anything to Queensland ports by train since before Christmas." GrainCorp's shipping schedule shows some 249,000 metric tons of grain in 15 cargoes listed for export in January from its three ports in Queensland.
That includes 12 cargoes for a total 199,000 tons of wheat, a relatively minor amount in the context of the massive national grain export effort. Australia - a major exporter of high quality wheat - is on track to produce a record 26.8 million tons of wheat in the current crop year ending March 31, up 22% on year, according to the Australian Bureau of Agricultural and Resource Economics and Sciences. All farming activities in Queensland have been affected, particularly in the past two weeks, Wayne Newton, the grains section president of farmer lobby and services group, AgForce, said by telephone from Dalby town, west of Brisbane. He estimated more than half of Queensland's cotton crop would have suffered considerable damage and may be ruined, with crops in central Queensland near towns such as Emerald and Theodore totally wiped out. Queensland normally accounts for about 40% of Australian cotton lint output.
National production this year was previously estimated by Abares at 900,000 metric tons of lint. Newton estimated the floods could cut production by more than 150,000 tons. About 30% of the summer sorghum crop on the Darling Downs, the major growing region for the crop, could also be wiped out by the sustained flooding, he said. National production from the 2010-11 crop was estimated at 2.0 million tons, according to a December Abares report. Heavy rains have disrupted harvesting of winter grains including wheat, resulting in quality downgrades and lost production. The sugarcane harvest and crush was brought to a premature end late in 2010, with production down 20%, resulting in a sharp fall in export availability this fiscal year, compounding a tight global market and volatile prices. Making matters worse, extreme weather may continue well into the coming months.
A strong La Nina remains firmly in place across the tropical Pacific Basin, and most long-range models suggest this climate episode will persist th rough the first quarter, the Australian Bureau of Meteorology reported. The 2010 La Nina has contributed to Australia's wettest spring--September through November--on record and one of the wettest Decembers with widespread flooding, particularly in northern New South Wales and Queensland. With a drought cutting grain production in Western Australia, most of this year's wheat and other grains for exports will be sourced from New South Wales, Victoria and South Australia, making harvest progress there critical to exporters and overseas buyers. Harvesting of winter grains is running about a month behind schedule in eastern Australia due to heavy rains although the wheat crop was ready by November-December. This resulted in considerable quantities of downgrades to feed grade and lower quality food grade, from hard milling wheat.
Barley has been downgraded to feed grade from malting grade. The downgrades have boosted domestic and global cereal prices. Overall, the Queensland harvest has finished, while in New South Wales and Victoria, it is three quarters or more complete, GrainCorp said. Queensland is estimated to account for only 5% of national wheat crop this year. But in the southern areas of Victoria, where harvesting is only 50% complete, and in southern New South Wales, many storage sites have seen record intake, it said. GrainCorp, the biggest provider of grain storage sites in the eastern states, operates a string of export terminals along the east coast. With a capacity of 20 million tons, it accounts for more than two-fifths of the total storage capacity in the eastern states, estimated at 47 million tons.

Economic optimism lifts stocks, oil
LONDON, Jan 4 (Reuters) - Optimism about the state of the world economy lifted stocks as well as boosting the dollar and keeping oil prices at a near 27-month peak. "People are starting to recognise there is some improvement in the employment picture in the United States. You would expect to see some of the confidence of the (manufacturing) PMI to be reflected in the non-farm payrolls," said Philip Isherwood, European equities strategist at Evolution Securities.

20110105 0851 Soy Oil & Palm Oil Related News.

Soy product futures ended lower, stumbling in unison with soybeans on broad-based speculative selling in commodities. Traders booked profits on prior gains, reducing exposure in the market, analysts said. The commoditywide selling overshadowed initial support in soyoil from strength in world vegoil markets amid fears of shrinking palm oil supplies. CBOT March soyoil ended 0.85 cents, or 1.5%, lower at 56.85 cents per pound, and March soymeal traded $1.20, or 0.3%, lower at $367.80 a short ton. (Source: CME)

India Official: No Plan To Tax Crude Edible Oil Imports (Source: CME)
India doesn't have any plan to impose an import duty on crude edible oils or to raise the tax on refined edible oils, a senior food ministry official said. "We import nearly 50% of our edible oil requirement. Any increase in the import tax may lead to a rise in edible oil prices," the official, who didn't want to be named, told reporters. India currently doesn't levy any duty on crude edible oil imports but imposes a 7.5% tax on refined oils. The South Asian nation is the world's largest edible oil importer. It imported a record 8.82 million tons of edible oil in the marketing year that ended Oct. 31. The country imports palm oil mainly from Indonesia and Malaysia, and soyoil mostly from Brazil and Argentina.

U.S. soy up 0.5 pct on LatAm weather, wheat ticks up
SINGAPORE, Jan 4 (Reuters) - U.S. soybean futures rose  around half a percent and  corn was steady, with  both the markets trading close to more than two year highs as  drier-than-expected weather in South America renewed concerns  over supplies.  "There has been interest on the flood situation in  Australia and we are seeing disruptions in transportation of  harvested grain," said Matthews.

Palm oil hits 33-mo high in weather-driven rally
KUALA LUMPUR, Jan 4 (Reuters) - Malaysian crude palm oil hit a fresh 33-month high as part of a weather-driven rally in global vegetable oil markets. "The palm oil market is pacing itself for more gains. The consensus is that in the first quarter prices will strengthen as adverse weather intensifies and demand grows," said a trader with a foreign commodities brokerage.

Brazil's soy areas heading for a wet fortnight -Somar
BRASILIA, Jan 3 (Reuters) - Brazil's soy-growing regions will see fairly steady, widespread rain over the next fortnight, forecaster Somar said on Monday, as much of the crop enters the late stages of its development.
A combination of cold fronts, instability and an accumulation of moisture from the Amazon will bring rain to all the main growing states in the world's No. 2 soy producer.

Argentine soy crushing rises 34 pct in November
BUENOS AIRES, Jan 3 (Reuters) - Argentine soy crushing increased 34 percent year-on-year in November to 3.14 million tonnes, boosted by the record 2009/10 harvest, the government said in its latest monthly report.
Argentina is the world's top supplier of soyoil and soymeal and the third-biggest exporter of unprocessed beans.
Soy processing slumped for almost a year due to the poor, drought-hit harvest of the 2008/09 season, but improved weather lifted 2009/10 soy production to a record 52.7 million tonnes, according to government estimates.

Palm oil may peak in H1 2011 as supply shrinks
KUALA LUMPUR, Jan 4 (Reuters) - Palm oil's price cycle may  peak in the first half of 2011 as Asian buyers chase for  vegetable oil supplies that are shrinking on adverse weather,  said a Goldman Sachs analyst on Tuesday.
The tropical oil could hit 4,000 ringgit ($1,305) soon but  will come under pressure once output recovers in the second  half, said Patrick Tiah, whose 2010 forecast of 2,733 ringgit  was the most accurate of 19 analysts polled last January.