Wednesday, April 6, 2011

20110406 1820 FCPO EOD Daily Chart Study.

FCPO closed : 3376, changed : +10 points, volume : higher.
Bollinger band reading : correction range bound little downside biased.
MACD Histrogram : rising higher, buyer increasing exposure.
Support : 3350, 3300, 3270, 3250, 3200 level.
Resistance : 3420, 3450, 3470, 3500 level.
Comment :
FCPO closed recorded small gain with increasing volume traded while soy oil price trading higher after overnight closed little lower.
Daily chart formed a doji bar candle still staying between upper and middle Bollinger band with the bandwidth narrowing after market opened gap little higher, dropped tested lower and surged upward recorded gain before retreated lower to closed at opening price.
Technical reading suggesting a correction range bound little downside biased market development testing support and resistance 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.

20110406 1728 FKLI EOD Daily Chart Study.

FKLI closed : 1553.5 changed : +3.5 points, volume : higher.
Bollinger band reading : pullback correction upside biased.
MACD Histrogram : turned downward, buyer profit taking.
Support : 1550, 1540, 1530, 1515 level.
Resistance : 1565, 1580, 1590, 1600 level.
Comment :
FKLI closed recorded small gain with higher volume changed hand doing less than a point premium to cash market while regional market traded mixed on official news of China central bank increased interest rate again to curb inflation.
Daily chart formed an up doji bar candle with long lower shadow positioned below upper Bollinger band level after market opened unchanged, traded lower before surge upward recovered all losses and recorded gains to closed near the high of the day. 
Chart reading suggesting a correction range bound upside biased market development testing support and resistance 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.

20110406 1658 Global Market & Commodities Related News.

Yen falls as BOJ meets, Asian stocks muted
SINGAPORE, April 6 (Reuters) - The yen fell as the Bank of Japan began a meeting on Wednesday that may signal its readiness to further loosen monetary policy to support the earthquake-hit economy while Asian stocks were muted after an interest rate rise in China.
"The dollar going above 85 yen is a significant breakthrough," said Hiroaki Osakabe, a fund manager at Chibagin Asset Management. "But carmakers and other manufacturers have to be able to produce at full capacity first to really feel positive impact. That's why they're not surging on the news."

Brent crude below $122, off 2-1/2-yr high on demand views
SINGAPORE, April 6 (Reuters) - Brent crude fell below $122 a barrel  from a 2-1/2 year high in the previous session, as a Chinese interest rate hike dampened sentiment and investors awaited confirmation of an industry report showing a surprise drop in U.S. crude stocks.
"I expect Brent to remain on the uptrend. Technically, it is possible for Brent to go to $125 a barrel within this week." said Ken Hasegawa, commodity derivatives manager at Japan's Newedge brokerage. 

S.Korea says could cut oil taxes if crude prices rise further
SEOUL, April 6 (Reuters) - South Korea will consider cutting oil taxes if crude prices rise further, the government said on Wednesday, without giving details.
It will also consider allowing state-run Korean National Oil Corp to sell oil products to retailers, an economy ministry statement said, as it looks for ways to trim energy costs that have helped drive inflation to a 29-month high.

Global palm oil demand to rise near-term-Oil World
HAMBURG, April 5 (Reuters) - Current competitive prices could push up global palm oil demand in coming weeks but this in turn will make palm oil more expenssive, Hamburg-based oilseeds analysts Oil World said on Tuesday.
"We expect world import demand for palm oil to pick up in the near term," Oil World said. "Palm oil prices have become more competitive and widened their discounts relative to soyoil and other vegetable oils, which is likely to trigger a sizeable improvement in demand from the reduced level in the preceding 3-4 months."

Corn dips after record high, rally may not be over
SYDNEY, April 6 (Reuters) - U.S. corn futures dipped on Wednesday after racing to a record high in the previous session, but worries that U.S. supplies could run out kept a floor under prices ahead of key U.S. data on Friday.
"It's come as a surprise to me the last couple of trading sessions. I didn't think corn had the legs to do it but it certainly has," said Jonathan Barratt, managing director at Commodity Broking Services.

China's winter wheat rated above five-year average
BEIJING, April 6 (Reuters) - China's winter wheat crop has so far grown better than the same time a year ago or better than the average-level over the past five years despite dry weather earlier this year, a report by the Ministry of Agriculture showed.
Irrigation coupled with rains in late February eased the drought and 86 percent of winter wheat seedlings were rated as first and second-grade, or excellent to good condition, by the end of March. That was up by 3.1 percentage points from the year-earlier period or 2 percentage points higher than the average level in the past five years, the ministry said.

Mexico sugar output seen at 5.3 mln tonnes
MEXICO CITY, April 5 (Reuters) - Mexican sugar production should reach 5.3 million tonnes in the 2010/11 harvest cycle, according to official forecasts from the national sugar committee seen by Reuters on Tuesday.
The committee had previously seen output reaching 5.25 million tonnes, still above the 2009/10 growing year, when Mexico's output dropped to its lowest levels in a decade because of bad weather.

China may import 2-3 mln T more corn by Sept-USGC
CHICAGO, April 5 (Reuters) - China may import an additional 2 million to 3 million tonnes of corn by September, the U.S. Grains Council said on Tuesday, which could further tighten already razor-thin corn stocks.
China may need additional imports because its state corn reserves for the 2011/12 crop year are 10 million to 12 million tonnes smaller than previously thought, said USGC President and CEO Thomas Dorr. The crop year starts Sept. 1.

Copper higher after China holiday; rate hike ignored
SINGAPORE, April 6 (Reuters) - Copper prices rose on Wednesday in London, and Shanghai futures jumped almost 1 percent when the market re-opened after a two-day holiday during which Beijing tightened the monetary policy screws with a 25-point hike in interest rates.

Gold firms near record, silver strikes 31-year peak
SINGAPORE, April 6 (Reuters) - - Gold firmed on Wednesday and held near a lifetime high hit in the previous session as lingering worries about inflation and tensions in the Arab World offset China's latest move to raise interest rates.
"Gold is still looking to hit another record. Tensions in the Middle East and North Africa are not solved yet. Secondly, there are new uncertainties in the euro zone. These all will benefit gold," said Ronald Leung, director of Lee Cheong Gold Dealer in Hong Kong.

20110406 1152 Local & Global Economic Related News.

OECD: Says G-7 recovery gaining strength, sees price risks. "With financial conditions improving across the board, it seems likely that the recovery is becoming self-sustained," the Paris-based organization said in its interim assessment. While "public finances remain in distress in most OECD countries," some central banks "will need to deal with a risk that inflation expectations may become unanchored." (Source: Bloomberg)

U.S: Service industries grew less than forecast in March, showing higher fuel costs are raising concern sales will cool. The Institute for Supply Management's index of non-manufacturing companies fell to 57.3 from 59.7 in February. Readings greater than 50 signal growth. (Source: Bloomberg)

E.U: Retail sales in February unexpectedly fall as energy costs soar. Sales in the 17-nation euro region slipped 0.1% MoM from January, when they advanced 0.2% MoM. Sales rose 0.1% YoY. (Source: Bloomberg)

Japan: May restrict power use as summer set to worsen shortages. Energy-supply constraints due to the damage to the Fukushima Dai-Ichi nuclear power plant following last month's earthquake and tsunami mean the step must be considered, Chief Cabinet Secretary Yukio Edano said. (Source: Bloomberg)

Philippines: Inflation held at the fastest pace in nine months in March, supporting the central bank's decision to raise interest rates for the first time since August 2008. Consumer prices increased 4.3% YoY, matching the gain in February, the National Statistics Office said in Manila. (Source: Bloomberg)

Vietnam: Will increase the minimum wage by 14% next month, raising concern that higher labor costs may fan inflation that is already at a 25-month high. The government will lift the monthly minimum wage to VND830,000 (USD40) from VND730,000, effective May 1, according to a statement posted on its website. (Source: Bloomberg)

Malaysia: Exports rise 10.7%, fastest pace in seven months
Malaysia’s exports rose at the fastest pace in seven months in February as manufacturers shipped more electronics as well as oil and gas products to customers in Hong Kong and Japan. Overseas sales climbed 10.7% to RM51.8bn (USD17bn) from a year earlier after gaining a revised 4.6% in January, according to a trade ministry statement in Kuala Lumpur today. That was twice the 5% median estimate in a Bloomberg News survey of 18 economists. Malaysia, an oil and gas exporter and the world’s second- biggest palm oil producer, may benefit from rising commodity prices even as an easing in the global recovery and Japan’s 11 March earthquake threaten to cool demand for Asian goods. Singapore’s export growth slowed more than economists predicted in February as electronics shipments fell after the Lunar New Year curbed demand from China for parts. (Bloomberg)

China: Raises rate fourth time since October to tame prices
China raised interest rates for the fourth time since the end of the global financial crisis to restrain inflation and limit the risk of asset bubbles in the fastest-growing major economy. The benchmark one-year lending rate will increase to 6.31% from 6.06%, effective tomorrow, the People’s Bank of China said on its website at the end of a national holiday. The one-year deposit rate rises to 3.25% from 3%. (Bloomberg)

Australia: RBA keeps key rate at 4.75% as rising currency eases prices
Australia’s central bank left its benchmark interest rate at the highest level in the developed world as floods disrupt coal mining in the nation’s northeast and a rising currency tempers inflation. Reserve Bank of Australia Governor Glenn Stevens held the overnight cash rate target at 4.75% for a fourth straight meeting, as forecast by all 25 economists surveyed by Bloomberg News. He called the level “mildly restrictive” and appropriate given the economy’s outlook. “The natural disasters over the summer have reduced output and the resumption of coal production in flooded mines is taking longer than initially expected,” Stevens said. (Bloomberg)

Australia: Trade balance unexpectedly swings to deficit
Australia’s trade balance unexpectedly swung to a deficit in February for the first time in almost a year as disruptions from natural disasters cut mining shipments and higher fuel prices boosted imports. The shortfall was AUD205m (USD212m), from a revised AUD1.43bn surplus in January, the first time imports exceeded exports since March 2010, the Bureau of Statistics said. The median estimate in a Bloomberg News survey of 23 economists was for a surplus of AUD1.2bn. The Australian dollar, which yesterday reached the highest level since it was freely floated in 1983, fell after the report. The central bank is forecast to hold its benchmark interest rate unchanged at 4.75% today as torrential rains in Queensland in January and Cyclone Yasi in February cut shipments and Japan, Australia’s second-biggest trading partner, grapples with earthquake damage and a nuclear crisis.(Bloomberg)

EU: Portugal Cut to Baa1 From A3 by Moody’s on Bailout View
Portugal’s credit rating was cut by Moody’s Investors Service for the second time in three weeks amid expectations it will be unable to avert a European bailout. Moody’s downgraded Portugal’s long-term government bond ratings by one level to Baa1 from A3, and said it’s considering another reduction. Today’s move put the country at the same level as Ireland, Russia, Mexico and Thailand. Fitch Ratings on April 1 downgraded Portugal three notches to BBB-, the lowest investment grade, and kept the rating on “watch negative.”“Moody’s rating action was driven primarily by increased political, budgetary and economic uncertainty,” the company said in an e-mailed statement today. It expects the winner of June 5 elections to tap the European Financial Stability Facility with “urgency,” and that Portugal will be able to get support from other euro members before then if necessary. (Bloomberg)

US: Service industry probably grew close to fastest since 2005
Service industries probably grew in March at close to the fastest pace in more than five years, an indication the U.S. economic expansion is broadening beyond manufacturing, economists said. The median forecast in a Bloomberg News survey for the Institute for Supply Management’s non-manufacturing gauge is 59.5 after a 59.7 reading in February that was the highest since August 2005. A figure above 50 signals growth for the Tempe, Arizona-based ISM’s measure. Accelerating job growth may help sustain household spending, which faces headwinds from higher food and fuel bills. Federal Reserve officials said last month the economy is on “firmer footing,” diminishing the need to extend a bond purchase program beyond June. (Bloomberg)

20110406 1151 Malaysia Corporate Related News.

Pos: Khazanah board to meet this week on Pos. Khazanah Nasional Bhd's nine-member board is scheduled to meet this week to finalise bids made for Pos Malaysia. (Source: Business Times)

Iskandar: Two probes into Iskandar Investment last year. There were two separate probes done within Iskandar Investment Bhd (IIB) last year following complaints of how contracts were awarded. The investigations found cases of mismanagement, criminal breach of trust, procedures that were not followed and leaks of confidential information. (Source: Business Times)

Banking: Market to dictate number of banks. The market will determine the number of banks in the country, which are currently well-capitalised. Bank Negara Governor Tan Sri Dr Zeti Akhtar Aziz said banks have reached a "minimum size and are well-capitalised with quality capital that has enabled them to take advantage of economies of scale". (Source: The Star)      

RHB Capital delays cash call
RHB Capital Bhd (RHB Cap) is seeking a further extension of six months until Oct 19 to complete a proposed rights issue that would raise some RM1.3bn cash via the issuance of new shares. The proceeds from the cash call, which was proposed in October 2009, were to finance RHB Cap’s proposed acquisition of up to 89% equity interest in Indonesia-based PT Bank Mestika Dharma for about RM1.3bn. (Financial Daily)

Telekom Malaysia to sell RM2bn worth of sukuk
Telekom Malaysia Bhd, the country’s biggest fixed-line telephone operator, will issue up to RM 2bn worth of shariah-compliant debt papers to fund its expansion. The Securities Commision has approved Telekom’s proposed sukuk issuance, comprising of seven-year Islamic commercial papers as well as a 15-year medium term notes programme, according to a filing by Telekom to the stock exchange yesterday. (Malaysian Reserve)

Masterskill invests in Indonesian Hospital IPO
Masterskill Education Group has entered into an agreement with PT Surya Cipta Inti Cemerlang (PTSCIC) to subscribe for shares in a soon to be listed healthcare provider in Indonesia for USD1m (RM3.03m). In an announcement to Bursa Malaysia yesterday, the company said it would subscribe to shares in PT Sejahteraraya Anugrajaya (PTSA) at an issue price of 120 Rupiah (42 sen) per share, in conjunction with the latter’s IPO exercise on the Indonesian Stock Exchange. (Financial Daily)

Press Metal plans expansion
Press Metal announced yesterday that phase-2 expansion of its aluminium smelting operation would be located at the new Samalaju Industrial Park Bintulu, Sarawak. Press Metal would undertake the second phase of expansion via its wholly-owned subsidiary. The expansion project which was aimed at meeting the growing demand of aluminium in Asia, would be financed through internally generated funds and bank borrowings. (Starbiz)

Maxis aims to raise non-voice revenue
Maxis aims to raise its non-voice revenue to 50% by next year, from the current 41.5%, boosted by the production of the Maxis integrated partner in education (Mipe) programme, launched yesterday. Vice-president and head of products, devices and innovation T. Kugan said the educational programme, provided to selected higher learning institutions, would encourage students and administrative staff to use more data services for their academic works.“This will contribute to the overall usage of data and definitely be a significant contributor to revenue in the future for Maxis,” he told reporters after the launching of the Mipe programme here yesterday. (StarBiz)

Dominant to increase wood output
Johor based Dominant Enterprise Bhd plans to enhance laminated wood production to cope with rising global demand for knock-down furniture. The group is currently installing its third production line of laminated wood in Muar to increase total capacity by 23% to 210,000 cu m, from 40,000 cu m, at present.(StarBiz) 

20110406 1148 Global Market Related News.

Wen’s Inflation ‘Tiger’ May Find Cage Locked After Rate Rises (Source: Bloomberg)
China’s fourth interest-rate increase in less than six months signaled the government’s determination to “front-load” monetary tightening in an effort to defuse overheating risks. The People’s Bank of China yesterday boosted its benchmark one-year lending rate by a quarter point to 6.31 percent, making its announcement at the end of a three-day holiday. The timing came as a surprise to banks from Credit Suisse AG to Bank of America-Merrill Lynch that had said the central bank may pause in increases amid rising risks to global growth.

China Raises Interest Rates to Counter Inflation Pressure (Source: Bloomberg)
China raised interest rates for the fourth time since the end of the global financial crisis to restrain inflation and limit the risk of asset bubbles in the fastest-growing major economy.

Stevens Lets Currency Do ‘Heavy Lifting’ on Australia Rate Policy (Source: Bloomberg)
Reserve Bank of Australia Governor Glenn Stevens is betting a stronger currency will help contain inflation and allow him to extend an interest-rate pause to help the economy recover from a possible first-quarter slump.

Australian February Home-Loan Approvals Decline For Second Month on Floods (Source: Bloomberg)
Australian home-loan approvals declined for a second month in February as floods and a cyclone disrupted the housing market on the nation’s east coast.

IMF Report on Capital Controls Opposed by Nations Seeking More Flexibility (Source: Bloomberg)
An International Monetary Fund staff proposal to endorse capital controls in limited circumstances aroused opposition from Brazil and other nations seeking greater freedom to stem inflows of money from overseas.

Portugal’s Long-Term Credit Rating Is Lowered One Level to Baa1 by Moody’s (Source: Bloomberg)
Portugal’s credit rating was cut by Moody’s Investors Service for the second time in three weeks amid expectations it will be unable to avert a European bailout.

Swaps Signal Further Rate Increases Adding to Yuan Pressure: China Credit (Source: Bloomberg)
The cost of fixing borrowing costs in China suggests policy makers will raise interest rates at least once more this year as food and fuel costs surge, adding pressure on the yuan to strengthen.

Service Industries in U.S. Expand Less Than Forecast on Higher Fuel Costs (Source: Bloomberg)
Service industries in the U.S. grew less than forecast in March, showing higher fuel costs are raising concern sales will cool.

Fed Officials Divided Over Whether to Remove Stimulus in '11, Minutes Show (Source: Bloomberg)
Federal Reserve policy makers last month differed over whether to begin removing record stimulus this year as they debated the path of monetary policy after the completion of their $600 billion bond-purchase program.

Geithner Says Failure to Raise Debt Limit Risks Causing `Severe Hardship' (Source: Bloomberg)
Treasury Secretary Timothy F. Geithner said the U.S. would face a crisis worse than the one it just experienced if Congress fails to raise the debt limit promptly. “You will shake the basic foundations of the entire global financial system,” Geithner told a Senate subcommittee today. “I’m totally confident that Congress will act to avoid that.” It would be “inconceivable” that lawmakers will not act in time, he said.

Japanese Stocks Fall as Tepco Tumbles; Banks Lead Declines (Source: Bloomberg)
Japanese stocks fell as Tokyo Electric Power Co. tumbled and banks dropped, and on concern about the outlook for company profits.

Australian Dollar Rises to 30-Month High Versus Yen on Yield Differential (Source: Bloomberg)
The Australian dollar strengthened to a 30-month high against the yen on speculation monetary policy in Japan will stay looser than in other major economies as the nation recovers from its biggest earthquake on record.

Treasury Yield Approaches Four-Week High on Bets Fed Will Increase Rates (Source: Bloomberg)
Treasury 10-year yields approached a four-week high as traders added to bets the Federal Reserve will raise interest rates within a year.

Asian Stocks Decline on Concern Federal Reserve May Withdraw U.S. Stimulus (Source: Bloomberg)
Asian stocks declined, sending the regional benchmark index lower for a second day, amid growing concern the Federal Reserve will withdraw stimulus measures and after China raised interest rates.

Oil hovers above $120; stocks and euro fall
LONDON, April 5 (Reuters) - Brent crude prices hovered close to 32-month highs as markets focused on fears that unrest in producer states in Africa and the Middle East could disrupt supply, while stocks snapped a five-day winning streak. "There is a lot of good news priced into the euro already and (ECB President Jean-Claude) Trichet will have to support the rate view to keep the positive momentum," said Niels Christensen, currency strategist at Nordea in Copenhagen.

GLOBAL MARKETS: Yen falls as BOJ meets, Asian stocks muted
SINGAPORE, April 6 (Reuters) - The yen fell as the Bank of Japan began a meeting on Wednesday that may signal its readiness to further loosen monetary policy to support the earthquake-hit economy and Asian stocks were muted after an interest rate rise in China.
Brent crude oil eased from a two-and-a-half year high struck amid war in Libya and unrest in the Middle East and gold sat just below a record scaled in the previous session.

20110406 1147 Global Commodities Related News.

Oil : Brent jumps to 2-1/2 year peak, U.S. oil slips
NEW YORK, April 5 (Reuters) - Brent crude jumped to a 2-1/2 year peak above $122 a barrel on Tuesday, gaining for a fourth straight day as conflict and unrest in Africa and the Middle East more than offset China's latest interest rate hike.
"WTI is sputtering a bit ahead of inventory data. But Brent continues to march higher on Middle East/Africa supply outages and concerns," said Tom Bentz, a broker at BNP Paribas Commodities Futures Inc in New York.

NATURAL GAS: Natural gas ends lower on milder weather, supplies
NEW YORK, April 5 (Reuters) - U.S. natural gas futures ended lower on Tuesday, pressured by comfortable supplies and expectations that milder Northeast and Midwest weather this week will slow demand and continue to weaken prices.
"Demand is picking up a little, and we should see a large storage draw this week, but it's not necessarily enough to drive prices much higher. Weather isn't supportive, and there's still a lot of gas around," a Pennsylvania-based trader said.

EURO COAL: Spot coal down on weather, futures still strong
LONDON, April 5 (Reuters) - European futures coal prices remained strong on Tuesday as oil prices soared but the spot coal market dropped on the back of milder weather forecasts, traders said.
"This move has brought the power and coal markets back in line," one German utility trader said.

COMMODITIES: Gold, corn hit record; China rate hike ignored
NEW YORK, April 5 (Reuters) - Gold and corn prices hit record highs on Tuesday and crude oil hit new peaks as euro zone woes sparked inflation fears that drove investors into commodities.
"The market doesn't seem that bothered about Chinese interests rates any more," said David Morrison, strategist at London brokerage GFT.

Corn (Source: CME)
US corn futures close at an all-time high settlement for the second consecutive day on strong demand. Demand remains robust in the face of limited stockpiles ahead of next fall's harvest. Supplies, already projected to reach a 15-year low, will tighten more unless buyers step back because of high prices. "The market needs some clear evidence that you've shut off demand," says Mike Krueger, president of The Money Farm. Corn for May delivery rises 6 1/2 cents, or 0.9%, at $7.66 3/4 a bushel after reaching a record intraday high of $7.70 3/4.

Wheat (Source: CME)
US wheat futures finish narrowly mixed as traders assess whether the markets have adequately factored in weather threats. The USDA confirmed wheat in the Plains is in poor condition after prices rallied 4% Monday on crop concerns. "I think the market is just pausing to reflect on the fact that it's already had a lot of bullish news fed to it," says Dan Manternach, agriculture services director at Doane Advisory Services. CBOT May wheat falls 3 3/4c to $7.86 1/4 a bushel, KCBT May rises 2c to $9.50, and MGE May rises 3/4c to $9.62 1/4.

Rice (Source: CME)
US rice futures rise on projections Japan will increase imports due to damage from natural disasters. The disruption to food production in Japan is fueling talk that the country will raise imports to meet its domestic needs. Nearly three weeks after Japan's devastating earthquake and tsunami, rice and other food items aren't readily available in stores countrywide, according to reports. CBOT May rice rises 19 1/2c to $14.11 per hundredweight.

Oil Falls a Second Day After Signals U.S., China Demand Growth May Falter (Source: Bloomberg)
Oil declined for a second day in New York amid signs that the pace of fuel demand recovery may falter in the U.S. and China, the world’s biggest energy users.

Gold Climbs to Record in `Flight to Safety'; Silver Reaches 31-Year Peak (Source: Bloomberg)
Gold climbed to a record for a second day as the sovereign-debt crisis in Europe deepened after Moody’s Investors Service cut Portugal’s credit rating and higher grain and oil prices worsened the inflation outlook.

China Demand Seen Strong For Corn, Soybeans This Year (Source: CME)
Investment bank JP Morgan continues to maintain a bullish view on Chinese import demand for feedgrains, particularly soybeans and corn, Jing Ulrich, the managing director for Global Markets-China, said. Speaking at Commodities Week Asia, Ulrich said the demand for feedgrains was rising as more people in China are switching to a protein-rich diet. Chinese soybean import demand could rise 20% on year in 2011, she said. Last year, China imported 55 million tons of soybeans, compared with just about 5 million tons in 1999. Corn imports could hit 5 million tons this year, up from 1 million-2 million tons last year. "Between the two, corn has better potential for price growth," she said. Higher oil prices will make corn more expensive due to its use in the production of ethanol, she added. Ulrich, however, declined to give a price forecast for corn.
On gold, Ulrich said the current rally isn't over yet. "We maintain our positive view on gold since it is seen as an alternative to paper currency. Gold prices have staged a major rally recently, but we're not at the end of the rally yet." The demand for gold is likely to remain firm as Chinese consumers buy more gold jewelry as well as gold bars and coins, she noted. China's gold holdings only account for 2%-3% of its overall forex reserves. This could rise, and boost demand, she said.    

USDA Confirms Poor HRW Wheat Conditions (Source: CME)
The U.S. Department of Agriculture confirmed the U.S. hard red winter wheat crop is in poor shape overall, struggling in the southern plains. The government, in its first weekly crop progress report of the year, rated 37% of the crop as good to excellent, down from 65% a year ago. Analysts had expected the crop would be in worse condition than last year, when plants were emerging from good winter conditions. "The trade was expecting it to be the worst initial ratings in decades," said Charles Soule, an analyst for Country Hedging, a brokerage firm. Grain traders are worried about the potential for the U.S. crop after poor weather slashed global output last year. The U.S. is the world's top wheat exporter and increased demand for the grain shoved wheat futures to 2 1/2-year highs in February. Plains states that produce hard red winter wheat, used to make bread, look particularly poor thanks to dry conditions.
In Kansas, traditionally the country's top wheat-producing state, 31% of the crop was rated good to excellent, down from 69% a year ago, according to the USDA. Oklahoma's crop was rated 16% good to excellent, compared with 69% last year. Wheat in Texas was rated 12% good to excellent, down from 60% a year earlier. The poor hard red winter wheat ratings in the southern plains were expected by the market, but the drop in ratings for Nebraska at 35% good to excellent, and Colorado at 16% good to excellent showed other areas also didn't perform well, said Shawn McCambridge, senior grains analyst at Prudential Bache. "The poor HRW ratings will support the idea of production losses if crop conditions don't improve soon," McCambridge said. Traders said the condition rations ratings may not fully reflect the impact of record high temperatures and windy weather during the weekend in the plains, particularly Kansas.
The USDA said 64% of the crop in Ohio, the country's top soft red winter wheat-producing state, was in good to excellent condition. SRW wheat, grown in the Midwest and South, is used to make pastries and snack foods. Favorable winter weather produced improved ratings for soft red winter wheat crops across the Midwest. The Ohio ratings held steady from the levels that they went into dormancy, but Illinois, Indiana, and Arkansas all showed improvement during the winter after crops were struggling heading into dormancy, McCambridge said. The USDA rated Illinois's crop at 55% good to excellent, up from 38% in November. Indiana crop was rated 61% good to excellent, up from 30% in November, according to the USDA. In Arkansas, 68% of SRW wheat was rated good to excellent, up from 52% in November. "The improvement in ratings should put pressure on Chicago wheat relative to the hard red winter wheat contract traded in Kansas City," said McCambridge.
Overall, winter wheat was rated 32% poor to very poor, up from 6% a year ago, the USDA said. The crop will be harvested in early summer.

U.S. Eyes Higher Agriculture Trade, Investment With Indonesia (Source: CME)
The United States is looking to increase trade and investments with Indonesia in the agriculture sector, on the heels of high global food price and to help support U.S. economic recovery, a senior USDA official said. Michael Scuse, the acting undersecretary of the U.S. Department of Agriculture, led about 20 agriculture-related firms to help introduce them to the Indonesian market. "This sort of event is important, to reach out to businesses in other parts of the world...Not many notice that Indonesia has a huge land (area), with a large population, high economic growth, an expanding middle class, providing opportunities to expand exports of U.S. food and agricultural goods and stimulate investment," Schuse said.
Agricultural products comprise about 40% of U.S. exports to Indonesia, and were valued at more than $2 billion in 2010, while Indonesia's exports of agriculture products to the U.S. were valued at more than $4 billion, he said. "I think both countries agreed that the figures were underdeveloped and we'll be looking on how to increase it," he said.

China May Import More Corn As Reserves Fall Short - Council (Source: CME)
China may import significant amounts of corn before U.S. farmers harvest their next crop, the U.S. Grains Council said as corn futures reached all-time highs on fears about dwindling supplies. China, which has tried to be self sufficient in grain production, may buy another two million to three million tons of corn in the 2010-11 marketing year, which ends Aug. 31, according to the council. The U.S. Department of Agriculture has estimated the country's imports at one million tons. So far, China has bought 313,700 tons from the U.S., according to government data. "After reviewing the figures with a number of sources, I believe it is possible that China will purchase another two to three million tons," said Thomas Dorr, president of the council. Dorr, who recently traveled to China, said he heard from "Chinese sources" that state reserves were 10 million to 12 million tons less than previously thought. The USDA in March pegged China's end-of-season inventories at 60.11 million tons.
The potential for increased demand from China, which has tried to be self sufficient in grain production, threatens to tighten global corn supplies that have already dropped to a precariously low level. Corn futures on Tuesday reached an all-time high of $7.68 a bushel in an attempt to curb demand from limited stockpiles ahead of next fall's harvest. Grains traders have been on edge about demand from China due to the tight supplies, which are projected to reach a 15-year low in the U.S. by the end of the marketing year. Traders suspect the resource-hungry nation was the buyer of 1.25 million tons of U.S. corn sold to "unknown destinations" late last month. China's need for grain has increased due to growing demand for meat, fattened with corn and soybeans, from its middle class. As a result, China last year made its first significant purchase of U.S. corn since 1995, buying around 1.5 million metric tons.
China needs to be more transparent about the size of its grain stockpiles and harvests to send clear signals to global farmers about how much to grow, Dorr said. Futures markets entice farmers to increase plantings with high prices. Yet, signals from China have been unclear due to limited information about its output and reserve supplies. "U.S. farmers need consistent signals, and if given the correct ones, they will step up to the task at hand. Chinese buyers and end-users need to be transparent with regard to becoming a sustainable market," Dorr said. The council is an industry group that develops export markets for U.S. grains. It's members, including agribusiness giants like Bunge and Cargill and producers' groups, benefit from increased prices and exports.

Corn hovers near record high, short supply woes persist
SYDNEY, April 5 (Reuters) - U.S. corn futures edged up to stay near record highs erasing early losses, as continued worries over tight supplies in top exporter the United States helped stretch a rally.  "There's enough bullish news in the market to warrant further gains in corn prices," said Luke Mathews, commodity strategist at Commonwealth Bank of Australia, citing "catastrophically tight U.S. corn supplies and worries around the potential weather in the Northern Hemisphere for the new crop" which may hit yields.

Analyst cuts Ukraine grain crop f'cast for 2011
KIEV, April 5 (Reuters) - UkrAgroConsult agriculture consultancy on Tuesday lowered its forecast for Ukraine's grain harvests in 2011 to 44.72 million tonnes from the previous estimate of 46.88 million due to smaller yields.
The consultancy said in a report it reduced its forecast for Ukrainian wheat, barley, maize, rye, peas and millet harvests.

Bangladesh signs deal with Vietnam for 100,000T rice
DHAKA, April 5 (Reuters) - Bangladesh has signed a deal to import 100,000 tonnes of parboiled rice at $575 a tonne, CIF, from Vietnam in a government deal and will ink a deal for another 100,000 tonnes of rice, a senior official said on Tuesday.
A deal will be signed for another 100,000 tonnes of white rice at $530 a tonne, CIF, Ahmed Hossain Khan, director-general of the state grains buyer, told Reuters. 

Japan may lift ban on Vietnam rice imports -report
HANOI, April 5 (Reuters) - Japan, once a frequent buyer of Vietnamese rice, may lift a ban on imports in place for several years and buy 250,000 tonnes of the grain from the southeast Asian country, a state-run newspaper reported on Tuesday.
"At the start of this year, signals from Japan show the country wants to resume importing Vietnamese rice, with volume of around 250,000 tonnes," Vietnam Food Association Chairman Truong Thanh Phong was quoted by the Vietnam Agriculture newspaper as saying.

US winter wheat rated below year ago on dry weather
CHICAGO, April 4 (Reuters) - Condition ratings for the U.S. winter wheat crop were far below year-ago levels due to dry weather in key production areas, but spring seeding of corn was off to a strong start in far southern production areas, according to a U.S. Agriculture Department report released on Monday.
Only 37 percent of the U.S. winter wheat crop was rated in good to excellent condition, compared with 65 percent in that category a year ago, according to the USDA's crop progress and condition report.

Cocoa falls as Ivory Coast fighting intensifies
ICE cocoa futures fell more than 2 percent in early trade as heavy fighting in top grower Ivory Coast loosened Laurent Gbagbo's hold. Forces loyal to Ivory Coast's presidential claimant launched a major assault on the presidential palace, shaking Gbagbo's grip on power to the core after U.N. and French helicopters left his  military bases in flames Arabica coffee futures on ICE were steady, consolidating losses after three consecutive closes lower on speculator liquidation.

Vietnam's April coffee loading seen below 100,000 T
HANOI, April 5 (Reuters) - Coffee shipments from Vietnam are expected to drop below 100,000 tonnes this month from an estimated 150,000 tonnes shipped in March, and may go as low as 75,000 tonnes, traders said on Tuesday.
"Coffee export (loading) picked up strongly since the middle of March to meet demand for both roasters and deliveries to London but it will slow this month to a usual range," a trader in Ho Chi Minh City said.

Pakistan cotton output seen 10.9 mln bales-attache
WASHINGTON, April 4 (Reuters) - Following are selected highlights from a report issued by a U.S. Department of Agriculture attache in Pakistan:"Pakistan's 2011/12 cotton production is forecast at 10.9 million (480 lb) bales, 25 percent higher than last year's production level and the second largest harvest on record. 2010/11 cotton production is estimated at 8.7 million bales, down 12 percent from the preceding year. In 2010, the Government of Pakistan formally approved nine biotech cotton varieties (8 open pollinated and one hybrid) for cultivation.

S.Korea says could cut oil taxes if crude prices rise further
SEOUL, April 6 (Reuters) - South Korea will consider cutting oil taxes if crude prices rise further, the government said on Wednesday, without giving details.
It will also consider allowing state-run Korean National Oil Corp to sell oil products to retailers, an economy ministry statement said, as it looks for ways to trim energy costs that have helped drive inflation to a 29-month high.

U.S. crude oil inventories fall 2.8 mln bbls -API
NEW YORK, April 5 (Reuters) - U.S. crude inventories fell unexpectedly by 2.8 million barrels last week and gasoline stocks posted a surprise build, data from the American Petroleum Institute (API) showed on Tuesday.
The drop in crude stocks for the week to April 1 compared with analysts' expectations for a 1.7-million-barrel build in a Reuters poll.

20110406 1146 Soy Oil & Palm Oil Related News.

Soybeans (Source: CME)
U.S. soybean futures settled lower, continuing its retreat from prior gains as slowing demand and increased competition from South America weighed on prices. Chinese demand in the world soybean market has slowed amid negative Chinese soy crush margins, and with weak cash basis levels in South America, traders had little to incentive to push prices, analysts said. Talk of China is rolling South American soy purchases as well as switching a few U.S. soybean purchases to Brazil provided profit taking opportunities after last week's run to six week highs, analysts added. CBOT May soybeans ended 10 3/4c or 0.8% lower at $13.73 1/4.

Soybean Meal/Oil (Source: CME)
Soy product futures ended lower, with soymeal backpedaling on spillover weakness from soybeans slumping domestic and world crush margins, analysts said. Soyoil drifted lower, but failed to receive the same selling interest as soymeal amid bullish biofuel outlooks, analysts added. CBOT May soyoil ended 0.03c or 0.05% lower at 58.85 cents per pound, and May soymeal settled $3.40 or 1% lower at $353.60 per short ton.

Palm off 2-week high on ample supplies, S.American crop
KUALA LUMPUR, April 5 (Reuters) - Malaysian palm oil futures fell after hitting a two-week high earlier in the session as traders shifted their  focus to ample supplies of the tropical oil and the incoming South American soy crop.  "Market is on an adjustment towards 3,350 ringgit per tonne after it went up due to firm crude and bullish USDA report earlier," said a trader in Kuala Lumpur.

Brazil soy crop raised to record 70.6 mln T
SAO PAULO, April 4 (Reuters) - Brazil's 2010/11 soybean crop, which is more than two-thirds harvested, is seen at a record 70.56 million tonnes, up from the March view of 69.8 million tonnes, grains analysts Celeres said on Monday.
In the ninth report on the new crop by the analysts, Celeres said average Brazil yields had improved from last months data to 2.936 tonnes per hectare from 2.917 tns/ha in March. "With this, it is apparent that average yields could repeat the value registered last crop," which was an exceptionally good year, the report said.