Thursday, January 13, 2011

20110113 1855 FCPO EOD Daily Chart Study.

FCPO closed : 3694, changed : +44 points, volume : higher.
Bollinger band reading : side way range bound.
MACD Histrogram : falling, seller staying.
Support : 3650, 3620, 3550 level.
Resistance : 3700, 3720, 3750 level.
Comment :
Technical rebound FCPO recorded gained with improving volume participation after 4 days of fall while overnight soy oil rallied to closed significantly higher after USDA data showing a lower than expected stock level.
Daily chart formed a down bar candle with lower shadow after market opened gap up, tested lower support level and recovered but still closed below middle Bollinger band resistance level while the reading still suggesting a side way range bound market development testing support and resistant level.
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.

20110113 1835 FKLI EOD Daily Chart Study.

FKLI closed : 1572 changed : - 1 point,  volume : lower.
Bollinger band reading : correction range bound upside biased.
MACD Histrogram : weakening, buyer taking profit and reducing exposure.
Support : 1570, 1560, 1550 level.
Resistance : 1580, 1590, 1600 level.
Comment :
FKLI ended marginally lower recorded small loss with weakening volume changed hand while regional market ended mostly higher.
Daily chart formed a small body down doji bar candle after market traded range bound with the reading remained suggesting a correction side way range bound upside biased market development.
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.

20110113 0924 Global Economics Related News.

Thailand: Bank of Thailand raises rates, cites inflation threat
Thailand’s central bank raised its benchmark interest rate by 25 basis points to 2.25% yesterday as expected and signaled further tightening to curb inflationary pressure as the economy grows. The central bank said Thailand’s economy, Southeast Asia’s second largest, would “grow robustly” in 2011 but it highlighted risks from inflation, which it has already said could breach its target at some stage this year. (Financial Daily)

Japan:Current-Account surplus shrank 16% in November
Japan’s current account surplus narrowed for the first time in three months in November after import growth accelerated. The gap shrank 15.7% from a year earlier to JPY926.2bn (USD11bn), the Ministry of Finance said. The median estimate of 24 economists surveyed by Bloomberg News was for a surplus of JPY972.5bn. Report reinforces economists’ view that Japan’s GDP shrank last quarter for the first time in more than a year. The export-dependent economy has been weakened by a 15% strengthening in the Yen in 2010 and cooler overseas demand as stimulus measures expire. (Bloomberg) India:

Industrial production expansion slows to 2.7%
India’s industrial production grew at the slowest pace in 18 months in November, a deceleration that may not prevent the central bank from raising interest rates this month as surging food prices drive up inflation. Output at factories, utilities and mines rose 2.7% from a year earlier, the government said in a statement in New Delhi, less than the revised 11.3% jump in October when the Hindu festivals of Dussehra and Diwali boosted demand for goods. The median estimate of 30 economists in a Bloomberg News survey was for a 6.6% gain. (Bloomberg)

Australia: Inflation Risk Seen in Tomato Price Jump
Reserve Bank of Australia Governor Glenn Stevens can glimpse the inflation threat he faces from the nation’s floods at the produce shop near his suburban Sydney home in Sylvania Waters. Tomato prices soared 20% in the past week and bananas, grapes and sweet potatoes are up 10%. The crisis may force the RBA to accept higher inflation in coming months as the floods spur food and commodity costs and slow growth in a disaster zone the size of Egypt. Australian inflation-linked bonds rallied the most in more than five years as the damage, along with future rebuilding in a country already near full employment, risked stoking consumer prices. (Bloomberg)

EU: Germany’s 2010 growth fastest since reunification
Germany’s economy rebounded last year at its fastest pace since reunification but consumer spending stayed modest, leaving analysts and other Eurozone states hoping a more balanced recovery would take hold this year. GDP grew by 3.6%, preliminary Federal Statistics Office data showed, bouncing back from a 4.7% slump – it’s steepest since World War II – in 2009. The figure matched the mid-range forecast in a Reuters poll of 22 economists. (Financial Daily)

US: Import prices in US rise 1.1%, led by fuels, food
The cost of goods imported into the US rose in December, led by higher prices for commodities such as fuels and food. The 1.1% increase in the import-price index followed a revised 1.5% gain in November, Labor Department figures showed. Economists projected a 1.2% gain for December, according to the median estimate in a Bloomberg News survey. Import prices climbed 0.3% excluding fuel, with little change in the costs of automobiles and consumer goods. Rising demand from emerging markets like China, along with a weaker dollar, is driving up the cost of commodities. With unemployment stuck above 9%, companies are finding limited scope to raise finished goods prices, allowing the Federal Reserve to complete a second round of monetary easing to stimulate the economy. (Bloomberg)

20110113 0922 Malaysia Corporate Related News.

SP Setia leads race for PICC deal
Property developer SP Setia has emerged as the leading contender to build the Penang International Convention Centre (PICC) on the grounds of the Penang International Sports Arena (Pisa). According to sources, SP Setia is likely to get a 30-year concession to build and operate the convention centre, which will include other components like a hotel and retail outlets. "The proposed project is likely to cost over RM200m," one source told Business Times yesterday. Another source said SP Setia is one of four companies which had responded to a request for proposal from the Penang state government. The Penang Island Municipal Council had closed the tender in September last year. (BT)

Karambunai's RM6.5b resort plan gets Sabah govt backing
An ambitious RM6.5bn plan to develop an integrated resort in Karambunai near Kota Kinabalu has received support from the Sabah government. The state cabinet gave its nod after a delegation led by Karambunai Corp president Tan Sri Dr Tsen Lip Keong provided a briefing on the project yesterday. Chief Minister Datuk Seri Musa Aman said the development could strengthen Sabah's position as a tourism hub in the region and provide employment opportunities. "According to the briefing, 20,000 to 50,000 jobs will be made available in the next 10 years. (BT)

Indonesia's Garuda seeks USD1.1 bln in IPO; pricing high
PT Garuda Indonesia, the nation's flag carrier, expects to raise up to USD1.1bn in an initial public offering next month that could be the country's second largest, though its valuation looked pricey versus peers. The government's offering for the state carrier is aimed at tapping a boom in investor interest in Indonesia, though stocks have slipped this year after a record rally in 2009 and Garuda's price range was set about 30% higher than expected. The government set the price range at 750-1,100 rupiah (USD0.083-USD0.122) per share, said Mustafa Abu Bakar, the state-owned enterprises minister. The firm has said that it will offer a 36.5% stake, or 9.362bn new and existing shares. Garuda's price range reflects 7.4 to 10.8 times its Enterprise Value (EV) to EBITDA, said Iman Rachman, head of investment banking at Mandiri Sekuritas, one of the local underwriters. That is higher than regional peers such as Singapore Airlines with an EV to EBITDA at 4.9 times, and Thai Airways at 5 times, according to data from Thomson Reuters' Starmine. (Reuters)

KLIA to see four new airlines touching down
Malaysia Airports is set to receive four new airlines flying into KL International (KLIA) in Sepang this year. MAHB marketing manager Mohamed Sallauddin Mohamed Shah said the airlines from the Middle East, India, and South Africa have expressed strong interest to fly into KLIA and some indicated plans to commence services during the summer and winter period. (Malaysian Reserve)

Faber’s Abu Dhabi deals not renewed
Faber Group subsidiary Faber Ltd Liability Co (FLLC) has received a letter from the Department of Municipal Affairs, Western Region Municipality, Abu Dhabi, for the non-renewal of three contracts with an estimated annual total contract worth RM184m. The contracts are for the provisions of civil, mechanical and electrical maintenance services for low-cost houses at Madinat Zayed and Liwa in Abu Dhabi. The services of FLLC for the contracts will cease with effect from 3 April and 1 June. The non-renewal of the contracts shall have an effect to the group's earnings and the net assets per share of approximately 4 sen for the financial year ending 31 Dec 2011. (StarBiz)

Naim to work with 2 Sabah groups on projects
The Sabah Oil and Gas Contractors Association (Sogca) and the National Malay Chambers of Commerce Sabah (MCCM) branch will form a consortium to undertake some of the works in the RM2.4bn oil and gas terminal project in Kimanis awarded to Naim Engineering SB by Petronas. This follows the signing of a memorandum of understanding in Kota Kinabalu yesterday between the three parties that will see Sarawakbased Naim Engineering setting aside 30% or RM800m worth of works under the project to SOGCA and MCCM Sabah branch members. (BT)

Tejari eyes 20pc revenue growth
Tejari Technologies is confident of growing its revenue by 20% this year with the expandion of its retail and wholesale businesses in information and communication technology (ICT products. The recent acquisition of PC3 Technology SV and Essential Action SV have helped boost the group’s revenue for nine-month period ended 31 Aug. (BT)

Perodua allocates RM614m capex
Perodua, Malaysia’s number one car seller in 2010, has set aside RM614.2m for capital expenditure (capex) this year. Of this amount, between RM250m and RM300m will be utilised for the development of a new model, which is expected to further boost overall sales. “New models are needed in this business and we will also work towards increasing the local content. At present, the Alza has the highest local content of 90% while for other models, such as the Viva and Myvi, it is above 80%,” managing director Datuk Aminar Rashid Salleh told a press conference after unveiling the company’s sales figures for 2010 yesterday. He also said the new model would be a small compact car, but declined to say if it would be a completely new model or replacement of units of the current models in Perodua, as the Myvi has been in the market for five years. (BT)

TNB awards RM2.15bn jobs for Ulu Jelai project
Tenaga Nasional has signed two agreements worth some RM2.15bn for its Ulu Jelai hydroelectric project. The company said the contract period for the development of the Ulu Jelai hydroelectric project was five years, during which the payment to the contractors would be made in accordance with the progress. The project cost will potentially result in an increase in TNB's net assets by about 7.1%. TNB said the project was expected to be completed by July 2016. (BT)

20110113 0851 Renewables Enery Related News.

VANCOUVER, British Columbia, Jan 11 (Reuters) - Marubeni Corp  has bought a 49 percent stake in a wind farm being built in the Canadian province of Ontario, the Japanese trading house said on Tuesday.
Marubeni bought the stake in the Raleigh Wind Energy Center, a 78-megawatt wind energy project located in southwestern Ontario, from Invenergy, a privately owned, Chicago-based company.

Jan 11 (Reuters) - Barclays downgraded Energy Conversion Devices Inc  to "underweight" from "overweight" citing risks from exposure to changing renewable energy policies in European markets.
"Increasing risks to sustainability of policies in key markets (France, Italy) along with incremental risk of pricing pressure from crystalline silicon segment warrant a more cautious view", the brokerage said in a research note.

LONDON, Jan 11 (Reuters) - Investment in clean energy soared to a new record of $243 billion in 2010, driven by activity in China, in offshore wind and in European rooftop solar power, a report said on Tuesday.
In 2010, investment in low-carbon forms of energy rose 30 percent from $186.5 billion in 2009. It doubled the figure recorded in 2006 and was nearly five times higher than the 2004 level, the report by Bloomberg New Energy Finance said.

SARAJEVO, Jan 11 (Reuters) - Serbian power monopoly EPS said rainfall and good management of hydro power plants lifted its 2010 hydro power output to record levels, 20 percent above the annual target and 12 percent more than 2009.
"Though overhauls at two hydro power plants caused outages throughout 2010, the hydro power output hit a record of 12.5 billion kilowatt-hours due to good hydrology and operational readiness of plants on the Sava and Dunav Rivers," EPS said in a statement on Tuesday .

ABU DHABI, Jan 11 (Reuters) - The International Renewable Energy Agency (IRENA) is seeking a more than ten-fold increase in its annual budget to promote sustainable energy, its interim director-general said on Tuesday.
"For the type of work we are thinking about, the optimal budget is about $250 to $300 million," Adnan Amin told reporters. "It is realistic to expect growth in the budget in the medium term."

LOS ANGELES, Jan 10 (Reuters) - U.S. solar company SunPower Corp  said it reached a deal with utility Southern California Edison to provide 711 megawatts of solar power from three separate sites.
The utility, a unit of Edison International , said the agreements will provide enough power for more than 460,000 homes.

LONDON, Jan 9 (Reuters) - Scotland and China signed a $10 million renewable energy technology licensing deal on Sunday, the Scottish government said, as Chinese Vice Premier Li Keqiang began a four-day state visit to Britain.
The contract will allow technology pioneered in Scotland to be used to generate power from domestic rubbish at a plant in China, the government said in a statement.

FRANKFURT/LONDON, Jan 7 (Reuters) - A rush to pump money into subsidised German solar power has bloated the sector and threatens to distort the electricity market.
Cuts to subsidies did not prevent record capacity additions last year and the boom will continue as investors will seek to take last-minute advantage of generous, but fading support.

Jan 6 (Reuters) - Chinese solar firm LDK Solar Co Ltd  agreed to acquire a 70 percent stake in U.S.-based Solar Power Inc  for about $33 million to enhance module supply for its large-scale projects.
LDK, whose photovoltaic products are used in solar power panels, said it will also purchase certain components of Solar Power's manufacturing equipment and assume control of the module-manufacturing plant in Shenzhen, China.

BEIJING, Jan 6 (Reuters) - China will increase its nuclear power capacity by 38 gigawatts and hydropower capacity by 140 gigawatts by 2015, state television quoted the country's top energy official Zhang Guobao as saying on Thursday.
He did not give any forecast for wind power, but said there would be more large-scale windfarms in provinces such as Inner Mongolia and Gansu.

COPENHAGEN, Jan 6 (Reuters) - Danish wind turbine maker Vestas Wind Systems A/S  had record North American orders for 871 turbines with total capacity of 1,883 megawatts in 2010, rebounding from a dismal 2009, the company said.
The glimpse of the North American order intake comes ahead of full-year 2010 results due on Feb. 9. Vestas had said on Dec. 29 its 2010 orders in China were record high.

SEOUL, Jan 6 (Reuters) - South Korea, the world's No.5 crude importer and No.2 liquefied natural gas (LNG) buyer, will boost financial support for the new and renewable energy industry this year by nearly a quarter, the government said on Thursday.
The country has earmarked 1 trillion won ($891.2 million) in support, up from 808.4 billion won last year, for new and renewable energy projects and financing, such as support for building solar and wind power energy facilities, the Ministry of Knowledge Economy said in a statement.

LOS ANGELES, Jan 5 (Reuters) - As No. 1 global solar market Germany ratchets down subsidies for solar power this year, investors looking for the next hot market for the renewable energy source should be eyeing India, according to a report by Lux Research.
The report, released on Wednesday, looked at the growth potential of 15 emerging solar markets and found that India has massive potential because of government subsidies, a need for distributed generation and increasing energy demands.

LOS ANGELES, Jan 5 (Reuters) - A leading environmental advocacy group is suing the state of California's Energy Commission over its approval of a giant solar plant, underscoring the growing challenge to the nation's renewable-energy goals from within the environmental community.
The lawsuit, filed Dec. 30 in California's Supreme Court by the Sierra Club, alleges that state regulators improperly approved the plant, known as the Calico Solar Project.

20110113 0850 Biofuels Related News.

ATLANTA, Jan 11 (Reuters) - Congress should transform the $6 billion a year ethanol tax credit into a program that underwrites the installation of "blender" pumps and pipelines so biofuels are more widely available, the largest U.S. farm group said on Tuesday.
The 45-cent a gallon tax credit, which goes to gasoline blenders, expires at the end of this year. Congress voted for the one-year extension last month amid arguments whether to end the tax credit altogether or to reform biofuels supports.

ATLANTA, Jan 11 (Reuters) - A majority of U.S. farmers want Congress to extend the ethanol tax credit that expires again this year, while a quarter could accept at least some cuts to the controversial subsidy, a Reuters survey showed on Tuesday.
A random poll at the American Farm Bureau Federation's annual meeting found 50 percent of the 436 farmers who responded said they supported the current ethanol tax rate, which some have said is key to further growth of the fuel additive made from corn.

HAMBURG, Jan 11 (Reuters) - Rapeseed prices have now reached such high levels that demand for rapeseed oil-based biodiesel for blending with fossil fuels could be cut in coming months, Hamburg-based oilseeds analysts Oil World forecast on Tuesday.
Oil companies are compelled to blend biodiesel, largely made from rapeseed oil, with fossil diesel in several European countries as part of environmental protection programmes.

BRASILIA, Jan 10 (Reuters) - U.S. senators John McCain and John Barrasso said on Monday the extension of U.S. ethanol subsidies and a tariff on imports is likely illegal under international trade rules, lending some support to Brazil's opposition to U.S. ethanol policy.
"I believe the WTO would rule against the United States because it's clearly a subsidy that is neither warranted nor in keeping with WTO regulations," Senator McCain of Arizona told reporters after a meeting with Brazilian President Dilma Rousseff in Brasilia.

LONDON, Jan 10 (Reuters) - Record high world food prices threaten to limit the use of land for low-carbon energy crops just as British efforts to pioneer growth of the giant grass miscanthus in Europe are poised to gather pace.
Miscanthus giganteus is a 3-metre high Asian elephant grass whose tawny leaves are now at their tallest before harvesting next month.

SAO PAULO, Jan 7 (Reuters) - Cosan , Brazil's largest sugar and ethanol group, said on Friday it has signed a binding deal to purchase Zanin cane group, for 378.6 million reais ($224.7 million), including cash and debt.
Zanin's mill in Araraquara, in Sao Paulo state, has a cane crushing capacity of 2.6 million tonnes per year. Cosan has already three mills in the same region.

BRASILIA, Jan 6 (Reuters) - Brazil's ethanol sector will need more investment to raise output and keep up with steadily growing demand from its domestic market with millions more flex cars taking to the road, agriculture officials said Thursday.
The Latin American country is a pioneer in sugar-cane ethanol, which is now the most popular mainstream fuel with its motorists who burn it in pure form in locally-made flex-fuel cars, technology found in almost 90 percent of new cars sold in Brazil.

20110113 0849 Global Market Related News.

Oil extends gains to near $92/bbl on lower inventories, cold
SINGAPORE, Jan 13 (Reuters) - Oil extended gains to hold under $92 a barrel, buoyed by signs of higher demand after U.S. crude stockpiles fell more than expected and a cold snap swept through the U.S. Northeast, the region's largest heating oil market.
"We're seeing a very strong market in crude after four consecutive sessions of gains. There are expectations of continued growth in demand after the bigger-than-expected drop in U.S. crude stocks," said Matthew Lewis, an analyst with CMC Markets in Sydney.

US corn, soy climb to 2-1/2 year highs on supply squeeze
SINGAPORE, Jan 13 (Reuters) - Chicago corn rose 1 percent, while soybeans extended gains, with both markets climbing to their highest in almost 2-1/2 years, buoyed by a surprisingly steep reduction in global supply of grains and oilseeds forecast by the U.S. government.
"It is the question of seeing new highs from here as things are tightening in the U.S. and they are going to tighten up supplies across the world," said Adam Davis, a senior commodity analyst at Merricks Capital, a Melbourne-based funds manager that invests in agriculture.

Gold falls from 1-week high, bonds auction watched
SINGAPORE, Jan 13 (Reuters) - Gold eased after rising to its strongest in a week in the previous session as strong demand for Portugal's bond sale eased concern over the debt crisis in Europe.
"The safe haven demand for gold may recede temporarily. I would think that gains in gold for the day ahead may be difficult to sustain," said Ong Yi Ling, investment analyst at Phillip Futures in Singapore.

Euro dips before more debt auctions, oil edges up
HONG KONG, Jan 13 (Reuters) - The euro dipped but could head higher if Spain and Italy, like Portugal, also find decent demand for their debt, while U.S. oil prices crept up to $92 a barrel, potentially straining consumers who are already watching food prices climb.
"The strong bond auction in Portugal has calmed the markets and with no major negative factors in sight, foreign funds continue buying lagging banking and property shares," said Mitsushige Akino, chief fund manager at Ichiyoshi Investment   Management, in Tokyo.  

OIL: Oil up after larger-than-expected fall in US crude stocks
SINGAPORE, Jan 13 (Reuters) - U.S. crude oil prices rose  above $92 on Thursday after crude stocks in the world's  largest oil user fell more than expected and a cold blast  stoked demand for heating oil in the U.S. Northeast.  
U.S. oil inventories fell for the sixth straight week, slashing supplies by 2.15 million barrels in the week ending Jan. 7, the Energy Information Administration said.

COMMODITIES: Soybeans, corn lead broad commodities rally
NEW YORK, Jan 12 (Reuters) - Soybean and corn futures jumped on Wednesday, helping power a broad rally across commodities as both hit 30-month highs after the U.S. government made surprisingly deep cuts in crop stocks.
The run-up in agricultural prices added to concerns about food inflation around the world, which has stoked political tensions.

GLOBAL MARKETS: Euro steady before more debt auctions, oil advances
HONG KONG, Jan 13 (Reuters) - The euro was stable on  Thursday and could head higher if Spain and Italy like  Portugal also find decent demand for their debt, while U.S. oil prices marched above $92 a barrel, potentially straining  consumers watching food prices climb. 
"The strong bond auction in Portugal has calmed the markets and with no major negative factors in sight, foreign funds continue buying lagging banking and property shares," said Mitsushige Akino, chief fund manager at Ichiyoshi Investment   Management, in Tokyo.

Alaska oil pipeline resumes flow at reduced rates
ANCHORAGE/NEW YORK, Jan 12 (Reuters) - Alaska's key oil pipeline has resumed shipments and was pumping 400,000 barrels per day, almost two-thirds of its normal levels, following a four-day shutdown due to a small leak, its operator said on Wednesday.
Since it was shut on Saturday, the closure of the line that normally transports 640,000 bpd shut in almost 12 percent of U.S. oil production and threatened to prompt supply shortages for refiners on the U.S. West Coast.

US crude stocks fall for 6th week, products rise-EIA
NEW YORK, Jan 12 (Reuters) - U.S. crude inventories fell more than expected last week in its sixth consecutive weekly drop, but gains in refined product stocks outpaced expectations, according to the Energy Information Administration on Wednesday.
Domestic crude stocks were off 2.15 million barrels to 333.11 million barrels in the week to Jan. 7, the EIA report showed, compared with expectations for a 1.1 million-barrel draw in a Reuters poll of analysts. Crude imports rose 449,000 barrels per day to 8.86 million bpd.

Argentina Farmers To Strike For One Week Over Export Controls' (Source: CME)
Argentina's farmers will launch a one-week strike starting Monday to protest government limits on grain exports, leaders of the country's four largest farm groups announced. The sale of non-perishable agricultural goods will be blocked during the strike, Rural Society president Hugo Biolcati said in a press conference. Argentina is the world's second-leading corn exporter, is third in soybean exports and is a significant provider of wheat exports. The farm group leaders met with Agriculture Minister Julian Dominguez and labor minister Carlos Tomada earlier Wednesday, but were unable to reach a deal over government intervention in local agricultural markets, Biolcati said. The Government tightly controls wheat and corn exports to keep down local prices, only clearing shipments once enough supply for domestic use has been set aside. Farmers complain that the government regularly stalls grain export approvals despite assurances that it has opened exports.
They say that allows exporters and domestic millers to take advantage of the slow pace of export permits to pay less for grains on the local market. "This is an almost obscene transfer of wealth from the farmer's pockets," Biolcati said. Mario Llambias, leader of the Carbap farm group, said that farmers are receiving offers for their wheat at $60 per ton less than market value based on international prices. Wheat trade at the Rosario Grain Exchange has stalled since the beginning of December, as exporters had enough of the cereal to cover all their export commitments allowed by the government, according to a trader at one of the leading grain exporters. Earlier in the day, the government said it had cleared for export the full 8.2 million metric tons of wheat expected to be available from the 2010-11 crop, but farm groups want the whole system of export permits abolished.
In 2008, farmers launched a series of crippling strikes over a four-month period to protest an increase in grain export duties, eventually forcing a congressional vote which reversed the tax hike.

Grain Prices Soar To Fresh Highs As US Cuts Supply View (Source: CME)
Grain prices soared after the U.S. Department of Agriculture made another deep cut in its outlook for global supplies. The USDA again revised downward its estimate for the size of last fall's corn and soybean harvest in the U.S. End-of-season inventories of corn, already expected to be at a 15-year low, were cut by more than 10%. Harvest estimates were trimmed for key export countries abroad. The closely watched monthly crop reports provided yet more confirmation that world supplies are approaching precariously low levels. The devastating drought and wildfires in Russia last summer was a shock to grain markets followed by a disappointing U.S. harvest. More recently, crops are hurting from a drought in Argentina, dryness in the U.S. Plains and torrential rains in Australia.
A tug-of-war is expected among crops as farmers decide what to plant this spring. High prices for wheat, soybeans and cotton will entice farmers to plant more of those crops, and that could mean corn supplies won't grow back to comfortable levels until 2013 or 2014, JP Morgan analyst Peter Meyer said. "Farmers (need) to think about planting their front yard," said Dan Basse, president of AgResource Co., an advisory and research firm based in Chicago. In its first estimate of how much winter wheat was sown this fall, the USDA said 41 million acres were planted. This was in line with expectations, but still remains below 2008 levels in part because some farmers likely are forgoing wheat to focus on soybeans. At the Chicago Board Of Trade, corn and soybean futures surged the most they're allowed to per exchange limits, before pulling back to settle at more than two-year highs.
Corn for March delivery, the most-active contract, closed up 4% to $6.31 a bushel, while soybean futures for January delivery, settled up 4.3% to $14.09 a bushel. Wheat prices jumped 1.5% to $7.70 1/2 a bushel. Last week, the U.N. Food and Agriculture Organization said its monthly food-price index, a closely watched indicator of international prices, hit a record high in December. The prior record from 2008 was set months after violent food riots in several nations, fueling concerns about the new high.

China adviser sees Q1 interest rate rise
BEIJING, Jan 12 (Reuters) - Another Chinese interest rate increase in the first quarter is likely, a central bank adviser said on Wednesday, but a vice governor cautioned against raising rates too steeply for fear of luring in hot money.
Li Daokui, an academic adviser to the People's Bank of China, said a rate increase in the first quarter would be reasonable because inflation tends to be elevated for seasonal reasons during the opening months of the year.

PRECIOUS-Gold strengthens as dollar eases, oil firms
LONDON, Jan 12 (Reuters) - Gold rose further above $1,380 an ounce in Europe on Wednesday on a retreat in the dollar, rising oil prices and firm physical interest from Asia.
Spot gold  was bid at $1,382.90 an ounce at 1119 GMT, against $1,380.45 late in New York on Tuesday. U.S. gold futures for February delivery  eased $1.40 an ounce to $1,382.90.

FOREX-Euro holds gains after strong Portugal auction
LONDON, Jan 12 (Reuters) - The euro held earlier gains on Wednesday after strong demand at a Portuguese government debt auction quelled some immediate concerns about the country's funding problems.
The euro barely moved after Lisbon sold 1.249 billion euros in debt, including 10-year bonds which were sold at a lower average cost that at a previous sale, while three-year bonds went at a significantly higher yield.

U.S. soy up 1 pct, corn steady ahead of key report
SINGAPORE, Jan 12 (Reuters) - Chicago soy futures rose  more than 1 percent recovering from a two-week  low, while corn was little changed  as investors took  positions ahead of a key U.S. government report expected to  forecast tighter grain and oilseed supplies.
"We are not bullish on soybeans in the longer term but  that doesn't mean it will not go higher in the short period,"  said Ole Houe, a senior manager at FCStone Australia.

20110113 0842 Soy Oil & Palm Oil Related News.

Soy product futures rallied in unison with soybeans, with soymeal rallying to over 1-year highs on the threat of tighter available soy supplies for crushing, analysts said. The supportive impact of a lower crush forecast by USDA was partially offset by higher extraction rates or yields, analysts added. CBOT March soyoil ended 1.26c or 2.2% higher at 57.87 cents per pound, and March soymeal traded $18.60 or 5.1% higher at $381.50 a short ton. (Source: CME)

U.S. soybean futures soared to 2-year highs, rallying after federal forecasters trimmed supply forecasts to precariously low levels. The government's reduction in projected year end inventories to minimal levels is seen placing increased pressure on 2011 production to ease the burden of strong demand on supplies, said Dan Cekander, analyst with Newedge USA, a brokerage firm in Chicago. The market in turn propelled prices in an attempt to ration demand as well as entice farmers into expanding planted acres for the 2011 crop, Cekander said. CBOT March soybeans, the most active contract settled 58 cents or 4.3% higher at $14.15. Meanwhile, light pressure from weather forecasts calling for improve rain chances for parched growing areas of Argentina next week helped trim advances after futures initially soared to exchanged imposed 70c upper daily trading limits. (Source: CME)

Palm oil hits 3-week low; USDA data eyed
KUALA LUMPUR, Jan 12 (Reuters) - Malaysia palm oil tumbled  to a three-week on a technical correction ahead  of a key U.S. crop report that is likely to show tighter  supplies.
"The rally around the New Year went ahead of the  fundamentals, to some extent. Traders need the market to ease  ahead of the USDA report," said a dealer with a foreign  commodities brokerage in Kuala Lumpur.

Argentine rains fail to lift cloud over soybeans
BUENOS AIRES, Jan 11 (Reuters) - Recent rains in Argentina did not reach most of the country's soy-farming belt, where dry weather caused by La Nina is threatening the oilseed as it enters the critical pod-setting stage, a weather specialist said on Tuesday.
Argentina is one of the world's biggest exporters of soy and corn, and parched conditions this season have helped drive global prices close to their highest level since mid-2008 and stoked concerns about rising food price inflation.

Brazil's soybean crop developing well -Oil World
HAMBURG, Jan 11 (Reuters) - The outlook for Brazil's 2011 soybean harvest remains positive despite concerns about weather damage to crops in other South American countries, Hamburg-based oilseeds analysts Oil World forecast on Tuesday.
Oil World has slightly raised its forecast of Brazil's 2011 soybean crop to 67.5 million tonnes up from 67.3 million tonnes forecast in December and against 68.7 million tonnes harvested in 2010.
But this is still below the Brazilian government crop estimate on Jan. 6 of 68.55 million tonnes. Harvesting is now starting.