Thursday, January 27, 2011

20110127 1805 FCPO EOD Daily Chart Study.

FCPO closed : 3685, changed : +15 points, volume : lower.
Bollinger band reading : side way range bound.
MACD Histrogram : turned upward, buyer and seller battling.
Support : 3650, 3620, 3550 level.
Resistance : 3700, 3720, 3750 level.
Comment :
FCPO closed recorded small gain with lower volume transacted after 2 days of severe fall while soy oil futures price traded weaker after overnight closed rebounded higher.
Daily chart formed a down doji bar candle after market traded range bound tested resistant and support levels and closed near middle Bollinger band resistant level with the reading calling for a side way range bound 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.

20110127 1725 FKLI EOD Daily Chart Study.

FKLI closed : 1525 changed : +1.5 point,  volume : lower.
Bollinger band reading : side way range bound.
MACD Histrogram : falling, seller taking changes.
Support : 1515, 1500, 1485 level.
Resistance : 1530, 1540, 1550 level.
Comment :
FKLI recovered slightly recorded small gain with lower volume changed hand after yesterday intraday panic sell down doing nearly 2 points discount compare to cash market while regional market closed mixed.
Daily chart formed an up doji bar candle after traded within 10 points range bound market tested higher resistant level followed by selling pressure pressed price to closed near the low positioned near lower Bolinger band support level while reading changed to suggesting a side way range bound 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.

20110127 1218 Global Economics Related News.

Singapore: May revise growth after Dec dip in manufacturing
Singapore's economic growth for 2010 may be revised slightly downwards after December manufacturing data came in below forecasts, economists said. Singapore's industrial output fell a seasonally adjusted 11.8% in December from November, hurt by a drop in pharmaceutical production which tends to be highly volatile on a month-to-month basis. (BT) Japan: Deficit expansion may lead to record bond sales The Japanese government’s prediction of wider budget deficits for the next three years may boost bond sales just as waning domestic demand drives yields higher. Yields on benchmark 10-year bonds rose 0.02 percentage points to 1.24%, and are up from a seven-year low of 0.82% in October. The government projected a combined shortfall of JPY155.5trn (USD1.9trn) through the three years ending March 2015. (Bloomberg)

China: Rate increases ‘necessary,’ Central Bank adviser Li says
China needs to extend interest rate increases and allow the yuan to gain by about 5% annually to combat inflation and avoid fuelling asset bubbles, said Li Daokui, a central bank monetary policy committee member. The People’s Bank of China has raised benchmark lending rates twice by a quarter-point since October to 5.81%. Consumer prices rose 3.3% in 2010, breaching a government target of 3%. (Bloomberg)

US: Sales of new homes in US rise more than forecast
Purchases of new houses in the US rose more than forecast in December, propelled by a record surge in the West as buyers in California may have rushed to qualify for a state tax credit before it expired. Sales climbed 18% to a 329,000 annual pace, figures from the Commerce Department showed. The percentage gain was the biggest since 1992, and was led by a record 72% jump in the West. (Bloomberg)

US: Fed maintains stimulus, seeking faster job gains
Federal Reserve policy makers maintained plans to buy USD600bn of Treasuries through June, indicating the accelerating recovery still needs stimulus to produce a bigger reduction in unemployment. The expansion is “continuing, though at a rate that has been insufficient to bring about a significant improvement in labor market conditions,” the Federal Open Market Committee said in its statement after a two-day meeting in Washington. (Bloomberg)

Germany: Import prices rose at the fastest annual pace in more than 29 years in December, driven by soaring costs for commodities such as energy and metal. Import-price inflation accelerated to 12% YoY, the highest rate since October 1981, from 10% YoY in November. (Source: Bloomberg)

Spain: Says some savings banks may need 10% capital. Spain will impose a core capital requirement of as much as 10% on lenders that don't have private investors and depend on wholesale funding, Finance Minister Elena Salgado said. The target exceeds the 8% minimum capital requirement she set two days ago and follows a slump in bonds and financial shares that followed the Jan. 24 announcement. (Source: Bloomberg)

Belgium: Faces rating cut as political crisis deepens. Belgium's political crisis escalated as the mediator charged with jump-starting stalled coalition talks gave up the job, putting the debt-laden nation's credit rating at risk. King Albert II accepted Johan Vande Lanotte's resignation and will start consulting with political party leaders, the royal palace in Brussels said in a statement. Vande Lanotte had undertaken a reconciliation mission after seven- party coalition talks broke down in September, leaving Belgium with a caretaker government and without a 2011 budget more than seven months after an inconclusive election. (Source: Bloomberg)

S. Korea: Posts current-account surplus for 10th month in December as demand for the nation's exports of cars and electronics products weathered an appreciation in the won. The surplus was USD 2.11b, compared with a revised USD 1.93b in November. (Source: Bloomberg)

Singapore: Industrial production rose at the slowest pace in four months as electronics and pharmaceutical manufacturers capped output amid easing orders. Manufacturing, which accounts for about a quarter of the economy, climbed 9% YoY in December after a revised 40.5% YoY increase in November, the Economic Development Board said in a statement. (Source: Bloomberg)

Singapore: Expects inflation to ease in second half after accelerating in the early part of the year. The Monetary Authority of Singapore said "headline inflation is expected to be higher over the next few months, mainly due to the recent surge" in car-permit and global food prices. "However, we expect it to moderate in the second half." (Source: Bloomberg)

Thailand: Interest rate needs to rise, central bank says. The Bank of Thailand needs to boost borrowing costs again to damp quickening inflation and may use capital controls if needed, Governor Prasarn Trairatvorakul said. The bank this year "needs to continue to raise the key interest rate further to bring monetary policy to a normal level in line with economic conditions," Prasarn said at a news conference in Bangkok. Inflation is the key risk, though not so serious that rates have to go up quickly, he said. (Source: Bloomberg)

U.S: Confidence increases more than forecast in January, reaching an eight-month high, as the outlook for jobs brightened. The Conference Board's sentiment index increased to 60.6 from 53.3 the prior month, figures from the New York-based private research group showed. (Source: Bloomberg)

U.S: Home prices declined 1.6% YoY in November, signaling housing has yet to join the U.S. rebound. The S&P/Case-Shiller index of home values in 20 cities fell 1.6% YoY, the biggest 12-month decrease since December 2009. (Source: Bloomberg)

U.K: 4Q10 GDP unexpectedly shrinks as construction slumped and the coldest December in a century hampered services and retailing. Gross domestic product fell 0.5% QoQ after increasing 0.7% QoQ in the previous quarter. From a year earlier, the economy expanded 1.7% YoY. (Source: Bloomberg)

France: Consumer spending on manufactured goods gained in December as the last month of a government-auto subsidy boosted sales. Spending rose 0.6% MoM from November, when it increased a revised 2.7% MoM. Spending advanced 0.4% YoY. (Source: Bloomberg)

Spain: Debt costs fall at auction as deficit shrinks. Spain sold EUR 2.2b (USD 3b) of Treasury bills and its borrowing costs fell as the central government said the budget deficit narrowed to within its target last year. The Bank of Spain said the country sold three-month bills at an average yield of 0.98%, compared with 1.804% the last time securities of the same maturity were auctioned on Dec. 21. It sold six-month bills at 1.801%, compared with 2.597% at the December auction. (Source: Bloomberg)

Japan: Bank of Japan raised its growth forecasts for the year through March and predicted faster inflation as strength in overseas demand bolsters exports and pushes up commodity prices. "The economy will probably emerge from its slump soon and return to a moderate recovery path, although I cannot say for sure whether it will happen in the first quarter," Governor Masaaki Shirakawa said at a press conference after his board raised its growth forecast to 3.3% from 2.1%. "The economy is headed in a desirable direction," where it can achieve stable prices and sustainable growth, he said. (Source: Bloomberg)

India: Central bank increased the benchmark interest rate to a two-year high and signaled further gain in borrowing costs as it raised the inflation forecast. Governor Duvvuri Subbarao lifted the repurchase rate to 6.5% from 6.25%, according to a statement from the Reserve Bank of India in Mumbai. (Source: Bloomberg)

S. Korea: Economic growth slowed in 4Q10 after industrial production moderated. Gross domestic product rose 0.5% QoQ in the three months through December from the previous quarter, when it advanced 0.7% QoQ. GDP increased 4.8% YoY. (Source: Bloomberg)

Australia: CPI advanced last quarter at the slowest pace in almost two years as a stronger currency lowered costs for household appliances, clothing and cars from abroad. The consumer price index rose 0.4% QoQ from the July-September period, when it increased 0.7% QoQ. Prices were 2.7% YoY, the smallest gain in a year. (Source: Bloomberg)

20110127 1216 Malaysia Corporate Related News.

Puncak Niaga and Syabas say Selangor state government offer has many ambiguities
Puncak Niaga and Syabas say they would not be able to make a decision on the offer made by the Selangor state government to take over the two companies. There are numerous ambiguities on the offer made to take over the companies, a statement issued today by the parent company Puncak Niaga Holdings said. Its MD Datuk Hashim Mahfar said the two subsidiaries found numerous ambiguities which require clarification and explanation from the Selangor state government especially specifics pertaining to the offer price and other issues. (Bernama)

Pengurusan Aset Air sells RM2.7bn sukuk
Pengurusan Aset Air has sold RM2.7bn of Islamic bonds. The issuance was part of a RM20bn government guaranteed Islamic fund-raising program. (StarBiz)

Kencana completes placement, gets RM398m
Kencana Petroleum’s private placement of 166.7m shares of 10 sen each via its book-building exercise has been completed. The issue price has been fixed at RM2.38 each, representing about 1.65% discount to its last closing price of RM2.42. This would result in gross proceeds of about RM398m. (StarBiz)

Muhibbah, partner bag RM1.1bn project
Muhibbah Engineering in a consortium with Perunding Ranhill Worley SB has been awarded a RM1.1bn contract by Petronas Gas for works under its LNG regasification project. The proposed facilities will be located in Malacca and have a maximum send-out gas capacity of 3.8m tonnes a year. (StarBiz)

TH Plantations evaluates RM550m land purchase proposals
TH Plantations is currently evaluating two proposals for landbank acquisition in east Kalimantan and Sarawak that could cost up to RM550m. Management aims to achieve its target of having 50ha plantation land this year. It currently has a total plantation landbank of about 39,113ha, of which 37,483 has been planted. (Financial Daily)

SapuraCrest gets USD32m Petronas job
SapuraCrest Petroleum’s unit was awarded a USD32m job by Petronas for the provision of transportation and installation of offshore facilities for PC Myanmar’s Yetagun Phase 4 development in the Andaman Sea. (Financial Daily)

Hartalega: Miti confirms compliance with environmental standards. The Ministry of International Trade and Industry (Miti) said Hartalega Holdings Bhd's facility in Bestari Jaya complies with the Malaysian environmental regulatory standards. The ministry has consulted the relevant authorities on this issue and the Department of Environment assessment clearly shows that the company did not violate its requirements on effluent discharge. (Source: Business Times)

Wah Seong: Unit sells stake in JV, assets for RM10.5m. Wah Seong Bhd's wholly owned indirect subsidiary Yadong-Anti Corrosion (Int) Co Ltd is selling of its 50% stake in Arabian-Yadong Coating Co Ltd and steel pipe coating equipment for USD3.45m (RM10.5m). The sell down was due to termination of the JV company. (Source: Bursa Malaysia)

Building materials: Local cold rolled coil producers raise prices. Local cold rollers have raised the prices of cold rolled coils (CRC) in view of the general increase in the cost of raw materials and the recent floods in Australia. The latest sales were at USD840 to USD850 per tonne this week, up from deals done at USD780 to USD800 in the first week of January. (Source: The Star)

Property: Supply of office space in the city to considerably exceed demand. According to property consultant - DTZ Nawawi Tie Leong, the supply of new office space in Kuala Lumpur will be overwhelming this year. An additional 2.3m sq ft in new office space during 2011 will put more pressure on the market. The average rental rate for office space in the city would ease by 5% to RM5.90 per sq ft compared to last year. The rate of unoccupied space is expected to go up to 15% by next year. (Source: The Star)

PLUS: Shareholders to receive proceeds from sale in September. PLUS Expressways Bhd's shareholders will receive the proceeds from the disposal of their company's assets in early September this year. The tentative date for the completion of the disposal of PLUS' assets would be at the end of July, followed by a mid-August date for securing the High Court order for the selective capital repayment. Shareholders will then be paid the proceeds of the sale by early September and PLUS will be tentatively delisted by end-September. (Source: The Star)

Ramunia: To buy Oilcorp's fabrication yard. Ramunia Holdings Bhd has proposed to acquire the Pulau Indah Integrated Fabrication Yard and the moveable and immoveable assets located thereon from Oilfab Sdn Bhd (Oilfab), a 51%-owned indirect subsidiary of Oilcorp Berhad, for RM83.8m. The acquisition will be settled with RM3.8m cash deposit and issuance of new ordinary shares of Ramunia to Oilfab for the RM80m balance. (Source: Bursa Malaysia)

Mah Sing: Targets 30% sales from overseas ops. Mah Sing Group Bhd is targeting to get 30% of its revenue from overseas projects in five years. It is looking at China, Vietnam, Indonesia, Singapore and Australia for the company's overseas expansion plan. (Source: The Star)

IOI: To set up own broadband services. IOI Properties Bhd plans to develop its own broadband services for its townships in order to provide faster and better broadband connection to home owners. By 2Q11, the developer plans to come up with its own application called One IOI Net for some 150,000 households and 2,500 businesses in IOI townships in the Klang Valley and Johor. (Source: Business Times)

Ann Joo: To buy stake in Anshin. Ann Joo Resources Bhd has proposed to acquire a 38% stake in Anshin Steel Processor Sdn Bhd worth RM12m. Ann Joo currently holds the balance of 62% of the share capital of Anshin which operates a steel service centre. Upon completion of the acquisition, Anshin will become a wholly-owned subsidiary of the Ann Joo. (Source: Bursa Malaysia)

Proton, AirAsia: Team Lotus wins 1st round UK court battle with Proton. Datuk Tony Fernandes' Formula 1 team, Team Lotus, has won the first round of the UK court battle with Proton. The full trial has now been brought forward to March 21. (Source: The Malaysian Reserve)

Logistics: Projected to hit RM121b this year. According to Frost & Sullivan, Malaysia's logistics industry is expected to grow by 11.5% to RM121b this year from RM108.5b in 2010. The high-technology and capital-intensive projects under the 10th Malaysia Plan and the Economic Transformation Programme would create opportunities for the industry. Malaysia's external trade is expected to increase by 10% to RM1.28t this year from RM1.16t last year. Meanwhile, the total cargo volumes are expected to increase by 12.4% to 498.4m tonnes this year from 443.4m tonnes in 2010. (Source: The Star)        

20110127 0920 Renewables Energy Related News.

WASHINGTON, Jan 25 (Reuters) - President Barack Obama will set a goal for U.S. power plants to produce 80 percent clean electricity by 2035 in his State of the Union address on Tuesday to help boost the economy and create jobs.
Obama will say clean coal and natural gas, two fossil fuels that have not often been considered forms of clean energy, would be needed to meet that goal.

IGNEY, France, Jan 21 (Reuters) - An increasing number of farmers will try to claim a share of France's renewable energy sector to help cope with farm price volatility and counter environmental criticism that has tarnished their rural image.
Solar, wind and biomass energy are taking off in France in the wake of national and European energy targets. Farmers see them as a potential source of steady income amid erratic commodity prices, a way of cutting costs and a riposte to an image of farms as polluting.

REYKJAVIK/VANCOUVER, Jan 25 (Reuters) - Iceland said on Tuesday it would hold talks with Canada's Magma Energy Corp  on increasing its stake in HS Orka either by buying back shares in the Icelandic geothermal company or shortening Magma's lease.
The government said in a statement it wanted to hold discussions with Magma, a small Vancouver-based geothermal company, about shortening the 65-year lease that Magma has on the right to exploit geothermal energy on the volcanic island.

SAINT-NAZAIRE/PARIS, France, Jan 25 (Reuters) - France unveiled on Tuesday a 10 billion euro ($13.6 billion) plan to build its first offshore wind project in a bid to catch up with European neighbours in the development of renewable energy.
France, which produces 74 percent of its electricity from nuclear power plants, will build 600 offshore wind turbines with a total capacity of 3,000 megawatts, said President Nicolas Sarkozy, adding they would be built in the western regions of Loire-Atlantique, Brittany and Normandy.

SOFIA, Jan 25 (Reuters) - Swiss energy firm Alpiq  will invest about 36 million euros ($49.02 million) to expand its wind farm in Bulgaria and boost its installed capacity to 72.5 megawatts, the company said on Tuesday.
Alpiq put in operation 20 wind turbines with a total output of 50 megawatts near the city of Kazanlak, some 200 km east of Sofia in November last year. The new nine turbines should be ready by the end of 2011.

SEOUL, Jan 25 (Reuters) - South Korea, heavily dependent on energy imports, said on Tuesday domestic firms were likely to beef up investment in renewable energy businesses this year to double their exports of products in the sector.
About 100 firms in Asia's fourth-largest economy are expected to invest 4.5 trillion won ($4.03 billion) in renewable energy this year, up 23 percent from the previous year, the Ministry of Knowledge Economy said in a statement.

SEOUL, Jan 25 (Reuters) - Hyundai Heavy Industries , the world's largest shipbuilder, will double its investment in the renewable energy business during the next three years, mostly for solar power products, a company spokesman said.
"We have an investment plan to spend around 1 trillion won for about the next three years," the spokesman said, compared with 500 billion won ($447.2 million) during the past three years.

MILAN, Jan 24 (Reuters) - Enel Green Power , Italy's biggest renewable energy company, has agreed a deal to develop geothermal energy in Turkey as the group moves to expand.
Enel Green Power (EGP) said on Monday it has reached an agreement with the Uzun group to set up a company that will hold 142 exploration licenses to explore for geothermal resources in the west of Turkey.

LOS ANGELES, Jan 21 (Reuters) - U.S. Geothermal Inc   is in talks with Canada's Enbridge Inc  about a second equity investment in one of the company's geothermal power plants, Chief Executive Dan Kunz said in an interview.
Enbridge, Canada's No. 2 pipeline company, is beefing up its renewable power business and last year paid $23.8 million for a 20 percent stake in U.S. Geothermal's Neal Hot Springs project in Oregon.

20110127 0919 Biofuels Related News.

FRANKFURT, Jan 25 (Reuters) - A "worrisome" rise in world food prices may be long-lived, the chairman of Nestle, the world's biggest food group, told a German newspaper.
"The financial and economic crisis in 2008 put an abrupt end to price rises. I am afraid that this time the rise could be lasting," Peter Brabeck told the Frankfurter Allgemeine Zeitung in an interview released on the paper's Internet site ahead of publication on Wednesday.

WASHINGTON, Jan 25 (Reuters) - A bipartisan group of senior farm-state senators planned to introduce a bill on Tuesday that would put more ethanol-fueled vehicles on America's highways and provide government aid for pipelines and pumps to dispense the biofuel.
The legislation comes as the Obama administration said it wants to boost the amount of ethanol in gasoline by 50 percent for cars and trucks built in the last decade -- a goal constrained by a lack of infrastructure for handling the corn-based additive.

WASHINGTON, Jan 21 (Reuters) - The higher quality of the U.S. corn crop could yield more ethanol per bushel and divert less of the crop to biofuels, which could raise tight ending stocks by 20 percent, said a biofuels executive on Friday.
End stocks for 2010/11 are estimated by the Agriculture Department at 745 million bushels, the smallest in 15 years due to strong export and domestic demand. USDA estimates 4.9 billion bushels of the 2010 corn crop, or 39 percent, will be used in making ethanol.

WASHINGTON, Jan 21 (Reuters) - U.S. regulators on Friday backed a request that would sharply boost the use of corn-based ethanol in more than half the nation's cars, elevating the stakes in a contentious debate over the safety and cost of converting more corn into fuel.
The U.S. Environmental Protection Agency's announcement boosting the ethanol blend rate in gasoline to 15 percent from 10 percent in vehicles built from 2001 to 2006 was not a surprise, coming just months after it allowed so-called E15 in cars and trucks built in 2007 or later.

BRUSSELS, Jan 21 (Reuters) - Jatropha, a biofuel-producing plant once touted as a wonder-crop, is turning out to be much less dependable than first thought, both environmentalists and industry players say.
Some biofuel producers found themselves agreeing with many of the criticisms detailed in a report launched by campaign group Friends of the Earth this week -- "Jatropha: money doesn't grow on trees".

WASHINGTON, Jan 21 (Reuters) - The U.S. Environmental Protection Agency said on Friday it would allow cars and trucks built in the last decade to run on gasoline with a higher blend of ethanol.
The agency approved gasoline containing up to 15 percent ethanol for use in vehicles built from 2001 to 2006. Most gasoline now has up to 10 percent ethanol.

20110127 0918 Global Market Related News.

Brent hovers below $98 on U.S. economy, stimulus
SINGAPORE, Jan 27 (Reuters) - Brent crude hovered at below $98 after better-than-expected U.S. home sales data and a pledge by the Federal Reserve to keep monetary policy steady drummed up market sentiment.
"Any good economic data out coming out of America is good for oil," said Ben LeBrun, a Sydney-based markets analyst at CMC Markets.

China's Tianjin eyes big crude storage, refining base -paper
BEIJING, Jan 27 (Reuters) - China's northern city of Tianjin aims to have 30 million cubic metres, or 189 million barrels, of crude oil storage capacity within 10 years, the China Daily reported on Thursday.
By itself, the storage would be 85 percent more than the 102 million barrels of capacity in China's first phase of state strategic oil reserves and 10 percent higher than the second phase.

Wheat rises for 8th day; corn, soy near 2-1/2 year top
SINGAPORE, Jan 27 (Reuters) - U.S. wheat futures rose 0.6 percent, the eighth straight gain, to a new 29-month top as buyers scrambled for supplies amid fears of food inflation causing unrest in top importing nations.
"I think there is heightened attention to food inflation as  we don't know what is going to happen to crops in Argentina and we don't know whether La Nina is going to wipe out more crops," said Jonathan Barratt, managing director of Commodity Broking Services in Sydney.

Argentine grains port strike affects top exporters
BUENOS AIRES, Jan 26 (Reuters) - Argentine workers at some of the country's biggest grains export ports started an indefinite pay strike on Wednesday, threatening shipments in one of the world's biggest food suppliers.
The strike in the area north of Rosario paralyzed export facilities and crushing plants operated by Cargill, Bunge , Molinos Rio de la Plata , Vicentin and ACA, trade union and company sources said.

Gold steady; physical buying seen to slow
SINGAPORE, Jan 27 (Reuters) - Spot gold prices held steady on slowing physical and fund demand, though cautious economic views on the economy offered by the U.S. Federal Reserve lent support.
"Physical buying has started to slow down, after prices have gone up a bit," said a Singapore-based dealer, adding there was also some profit-taking trades.

Dollar slips to 11-week low after Fed, stocks rise
SYDNEY, Jan 27 (Reuters) - The U.S. dollar slipped to 11-week lows, while commodity prices and Asian stocks rose after U.S. Federal Reserve policymakers voted unanimously to maintain a $600 billion bond-buying plan to fuel an economic recovery.
"In this sort of environment, you look for growth assets. So investors are looking to park their money in investments that will provide good returns over time. As a result, equities and commodities are high up on the list," said Craig James, chief economist at CommSec in Sydney.   

OIL: Crude extends gains on Wall St, demand hopes
TOKYO, Jan 27 (Reuters) - U.S. crude futures extended gains on Thursday, gaining support from a rise in Wall Street stocks after President Barack Obama's call for lower corporate taxes spurred hopes for higher profits and stronger energy demand.
The market also got a boost after U.S. Federal Reserve policymakers, at the end of a two-day meeting, said they would press on with a plan to buy $600 billion in government debt to further stimulate the economy.

COMMODITIES: Biggest loss in 3 weeks after India rate hike
NEW YORK, Jan 25 (Reuters) - Commodities fell their most in three weeks on Tuesday after major consumer India indicated it will tighten its economy as much as needed to fight inflation, just like China.
"There is increasing concern about rising interest rates in Asia. It's raising the fear that liquidity in the global markets will continue to shrink," said Stephen Briggs, commodities analyst at BNP Paribas in London. 

GLOBAL MARKETS: Wall St ends flat, euro up on euro-zone hopes
World stocks and crude oil gained on Wednesday, shrugging off a lukewarm outlook from the Federal Reserve, as investors latched onto the growth prospects of U.S. President Barack Obama's pledge to trim spending.
"The market is not willing to buy into the Fed's vision," said Jim Vogel, interest rate strategist at FTN Financial in Memphis.

Japan 2010 crude import volume up 0.8 pct
TOKYO, Jan 27 (Reuters) - The volume of Japan's customs-cleared crude oil imports fell slightly in December from a year earlier, but imports for the whole of 2010 rose for the first time in two years helped by unexpectedly high oil demand due to the hottest summer on record.
Japan, the world's third-biggest oil consumer, imported 20.406 million kilolitres (4.14 million barrels per day) of crude oil last month, down 1.7 percent from a year earlier, the first decline in three months, preliminary data from the Ministry of Finance showed on Thursday. 

EU Report Undermines Sarkozy's G20 Commodity Regulation Plans (Source: CME)
A European Union study questioning the link between speculation in commodities markets and rising prices has thrown a spanner in the works of French plans to increase trading regulation. The long-awaited report was due to be released Wednesday but has been delayed until next week, or definitely by March 31, after French President Nicolas Sarkozy lambasted its findings. "I will recommend a date for the publication of a study showing that speculation does not result in global price rises of raw materials: 1 April," he told reporters Monday, referring to April fool's day. Sarkozy has put the regulation of commodity markets at the top of his agenda during France's upcoming presidency of the Group of 20 nations this year. The report in its current form would mark a home-ground defeat ahead of his push to create a global system to improve transparency in commodity markets ahead of elections in May 2012.
A draft of the report seen by Dow Jones Newswires said that it has found no evidence of "a correlation between the substantial increase in index fund positions and commodity futures prices." "Similarly, while there is a strong correlation between positions on derivative markets and spot prices, there is no conclusive evidence on the causality between speculation in derivatives markets and increased volatility and price increases in the underlying physical markets," the report added. Volatility in agricultural commodity markets has risen up the global agenda after data from the United Nation's food agency showed prices reached a record high at the end of 2010, above even the peaks of the 2007-08 food crisis. A wave of deadly riots against unemployment and food prices spreading across North Africa has also caused unease among leaders of the developing world, who fear a repeat of the widespread unrest of three years ago.
A spokesman for the European Commission said the bloc's government "remains serious about the issue," despite delays to the report's publication. "We have started technical work on the link between commodities prices, volatility and financial markets," he said. "We are confident that the Commission will adopt a solid contribution probably next week and certainly well before April 1." France's stance on commodity-market regulation comes amid evidence of surging speculative investment in resources. In the run up to commodities boom, institutional investors boosted inflows into commodities markets from $15 billion in 2003 to between $250 and $300 billion in 2008. Secretary-general of the Organization for Economic Co-operation and Development Angel Gurria Tuesday welcomed Sarkozy's push to make the regulation of volatility in commodity markets a priority. "Commodity markets need to function better and more transparently," Gurria said in a statement.
Other institutions have been more cautious in ascribing blame to speculators, with one study by the IMF earlier this month suggesting rising demand from emerging nations such as China and India was the driving factor for commodity prices.

Speculative Rally In Food Prices May Fuel Regulatory Backlash (Source: CME)
Global commodity prices are rising, fueled in part by speculative trading that could mark commodities as the latest asset class bubble and spur a regulatory backlash from governments keen to control the price of basic foodstuffs. The prices of many commodities undoubtedly would have risen anyway in response to recent supply disruptions and rising demand; but it's the outsized impact of investors leveraging on low interest rates to speculate on commodities which could prompt un-sustainable bubbles in some markets, anger consumers, and draw yet more fire from politicians on the dangers of derivatives trading. That commodity prices are spiking so soon after a similar run-up in 2008 could indicate that some markets are sufficiently untethered from their supply-demand fundamentals so as to jeopardize wider economic growth. Already, many developing nations are instigating price controls on foodstuffs to combat inflation and ward off the kind of discontent that led to riots in 2008.
France, which holds the presidency of the Group of 20, is pushing for tighter regulation and transparency in the trading of commodities, including derivatives trading. "We share the view that commodity price fluctuations have been, from time to time, excessive, and destabilize the growth of the economy," Rintaro Tamaki, Japan's vice minister of finance for international affairs said last week. On futures exchanges in the US, the world's biggest grains exporter, aggregate net long speculative positions in 14 major agricultural derivative contracts hit a record high of 104 million tons in November, well above the previous peak of 78 million tons in March 2008, an ANZ Banking Group report said. That's a big swing from earlier last year, when speculators were net short in U.S. agricultural futures, and the Commodity Futures Trading Commission is considering imposing limits on speculation, including restrictions on the number of contracts a company can hold.
Excess speculation from "investment tourists" aggravates instability, sending signals that aren't substantiated by fundamentals, said Abdolreza Abbassian, secretary for the Intergovernmental Group on Foodgrains at the United Nations Food and Agriculture Organization. According to Nobuyuki Chino, president of Unipac Grain, a Tokyo-based commodities trading company, US wheat prices would be closer to $6 a bushel compared with current prices of around $8/bushel, had there been no speculative interest in wheat. Corn should be trading around $5/bushel versus $6.5/bu now, and soybeans around $13.20, compared with $14/bu, he said. Others say it's difficult to quantify the speculation premium. "I've seen some sort of studies (suggesting) speculation has added 20%-30% to market prices but they are never substantiated. What you can say is the futures markets at times trade at substantial premia to the underlying cash market," said Ann Berg, a consultant to the FAO.
That's great news for investors who have bet on rising food prices. But for consumers, particularly in poorer countries, it could be disastrous and the spur for governments to either attempt to rein in food prices or act against speculators. With Asian derivatives exchanges gaining market share in recent years, there has been a surge in interest from global investors who want to park their funds in derivative products in the region, without the hassle of owning or storing physical commodities. In India, for example, the cumulative value of futures trading in commodities in the nine months to December rose 50% to INR82.7 trillion, according to data from the Forward Markets Commission, regulator of the country's futures exchanges.

US consumer morale at 8-mth high; home prices sag
WASHINGTON, Jan 25 (Reuters) - U.S. consumer confidence rose in January to its highest level in eight months, underscoring the brightening economic outlook, although declining housing prices still cast a cloud on the recovery.
The Conference Board, an industry group, said on Tuesday its index of consumer sentiment jumped to 60.6 from 53.3 in December. The rise topped economists' expectations for a reading of 54.3 and reflected gains in stock market prices and some labor market strength, which offset sustained drops in home values and high gasoline costs.

China banks ratchet up lending rates to ration credit
BEIJING, Jan 26 (Reuters) - Some Chinese banks have drastically raised interest rates on loans to comply with government orders to rein in credit growth after another lending surge at the start of the year, state media reported on Wednesday.
Instructions have come down from head offices to some bank branches, saying they must strictly abide by credit quotas this month, the China Securities Journal reported, with regulators keeping a closer eye than normal on lending activity as part of their campaign against inflation.

EU considers tough stance on raw materials - draft
BRUSSELS, Jan 25 (Reuters) - The European Union will consider stockpiling raw materials and will confront any country that restricts supplies, according to a European Commission strategy document.
"The EU will continue to pursue barriers hampering the sustainable supply of raw materials to the EU economy," said a draft paper seen by Reuters on Tuesday, which will feed into a strategy review to be launched before April.

OECD backs French push for commodity transparency
PARIS, Jan 25 (Reuters) - The Organisation for Economic Development and Cooperation (OECD) on Tuesday welcomed France's move to put commodity price volatility and food security at the top of its G20 presidency agenda, echoing the need for more transparency.
"Agriculture markets have always been volatile, but if governments act together then extreme price swings can be mitigated and vulnerable consumers and producers better protected," OECD Secretary-General Angel Gurria said in a statement.

Strong investment flows create commodity bubbles
LONDON, Jan 25 (Reuters) - High fund allocations into commodities have caused price bubbles in parts of the metals market that are likely to deflate once fundamentals begin to reassert themselves, according to a senior fund manager.
While active investment strategies are on the increase, analysts say a significant portion of the likely half a trillion dollars going into the asset class in 2011 will go via indexes, which offer exposure to the entire commodities block.

PRECIOUS-Gold edges up ahead of Fed as buyers hunt bargains
LONDON, Jan 26 (Reuters) - Gold edged up in Europe on Monday as the metal's fall to a near three-month low attracted physical buyers back to the market, though moves were muted ahead of an announcement on U.S. monetary policy later in the day.
Pressure is likely to remain on gold, however, after a run of positive economic data undermined the metal's safe-haven appeal. The main gold exchange-traded fund, the SPDR Gold Trust, recorded its biggest ever one-day outflow on Tuesday.

FOREX-Euro boosted on rate view; nears key resistance
LONDON, Jan 26 (Reuters) - The euro hit a two-month high versus the dollar on Wednesday on perceptions that interest rates will rise sooner in the euro zone than in the U.S., taking out option barriers on the way and approaching key resistance.
The dollar hit a 10-week low against a basket of currencies with the market looking for confirmation from the Federal Reserve later in the day that its focus remains on supporting growth.

U.S. wheat climbs to 29-month top as supply worries mount
SINGAPORE, Jan 26 (Reuters) - Chicago wheat jumped around 1 percent to its highest since August 2008 in anticipation of increased demand for high-quality U.S. wheat from key importers nervous about food security amid shrinking world supplies.
"This is telling us that demand for U.S. wheat is likely to increase for the coming weeks and even months," said Ker Chung Yang, investment analyst at Phillip Futures.

Dollar down on Obama cuts, benign Fed view
LONDON, Jan 26 (Reuters) - World stocks rose and the dollar hit a two-month low against the euro after a promise of spending cuts from U.S. President Barack Obama cemented expectations the Fed will retain faith in its ultra-loose policy.
"The stock market should be fine with the spending freeze," said Christopher Low, chief economist at FTN Financial in New York. "People don't want additional stimulus here. This will allow investors to focus on the Fed."

Argentine pay talks loom over grains shipments
BUENOS AIRES, Jan 25 (Reuters) - Double-digit inflation in Argentina is spurring demands for hefty wage hikes, raising the risk of strikes among soy crushers, port workers and truckers that could hit grains exports and contribute to rising global food prices.
With President Cristina Fernandez urging moderation in an election year, pro-government unions could lower their demands.

20110127 0915 Soy Oil & Palm Oil Related News.

ITS CPO export up 5.73% to 1,003,459 tonnes for the period of 1~25 Jan 2011.
SGS CPO export down 2.14% to 1,040,145 tonnes for the period of 1~25 Jan 2011.

Soy-product futures climb after Tuesday's drop as they move higher along with soybeans. Soyoil also gathered support from strength in crude-oil futures, with talk of firm world vegoil demand ahead of the Asian Lunar New Year underpinning prices. Meanwhile, soymeal gains capped by sluggish domestic demand. CBOT March soyoil ends 1.6% higher at 56.70 cents per pound while soymeal added 0.5% to $374.40 a short ton. (Source: CME)

Argentine port workers to strike in grain export hub
BUENOS AIRES, Jan 25 (Reuters) - Workers in ports around Argentina's grains export hub of Rosario confirmed on Tuesday that they will begin a strike this week that could put exports from the world's top soyoil and meal supplier at risk.
Major exporters and soy crushers such as Cargill Louis Dreyfus, Noble  and Bunge  own plants near Rosario, an area that accounts for about 80 percent of the country's soybean oil and meal output.

Palm oil off one-week lows on lower output talk
KUALA LUMPUR, Jan 26 (Reuters) - Malaysian palm oil bounced off fresh one-week lows  on talk of production falling further this month as rains continue to batter estates.  "There is a perception that the market was oversold. Also, there is talk that production could be at least 5 percent lower in January," said a trader with a foreign commodities brokerage.

Paraguay soy harvest seen at 7.48 mln T in 2010/11
ASUNCION, Jan 25 (Reuters) - Paraguay's 2010/11 soy output is expected to reach 7.48 million tonnes, a record for a second consecutive season, as sufficient rains boost crop yields during planting, the Agriculture Ministry said on Tuesday.
The poor South American country is the world's No. 4 exporter of the oilseed, though it trails far behind neighboring Brazil and Argentina.

Rains could bring relief to Argentine soy, corn
BUENOS AIRES, Jan 25 (Reuters) - Widespread rainfall forecast across Argentina's farming belt in the coming days should boost soy and corn crops suffering from drought caused by the La Nina weather anomaly.
The lack of rainfall is hitting some of Argentina's 2010/11 soy crop after causing irreversible damage to corn, which has already passed through the critical pollination phase when yields are largely determined.

China to slow soybean imports near term-Oil World
HAMBURG, Jan 25 (Reuters) - China's soybean imports in January and February are likely to slow down following a recent surge as stocks are building up in the country's ports, Hamburg-based oilseeds analysts Oil World said on Tuesday.
Growth in overall global import demand for soybeans has also been dented by the rise in U.S. soybean prices, it said. U.S. soybean futures  rose to a 30-month high in January partly because of Chinese demand and crop concerns in Argentina.