Friday, April 8, 2011

20110408 1830 FCPO EOD Daily Chart Study.

FCPO closed : 3399, changed : +71 points, volume : higher.
Bollinger band reading : side way range bound little upside biased.
MACD Histrogram : resumed rising, buyer stay put.
Support : 3350, 3300, 3270, 3250 level.
Resistance : 3420, 3450, 3470, 3500 level.
Comment :
FCPO closed recorded substantial gains with higher volume traded as traders anticipating improving demand ahead of Monday MPOB report and export data while soy oil, crude oil and most commodities trading significantly higher as a result of E.U. rate hike affecting a lower U.S. Dollar compare to Euro.
Daily chart formed a strong up bar candle closing above middle Bollinger band with the bandwidth remained unchanged after market opened and tested little lower, before recovered and surged upwards to closed at the high of the day.
Technical chart reading turned to suggesting a side way range bound little upside biased market development possibly testing higher resistant level as market recorded higher low for the past 2 weeks.
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.

20110408 1757 FKLI EOD Daily Chart Study.

FKLI closed : 1550.5 changed : -9.5 points, volume : higher.
Bollinger band reading : correction range bound upside biased.
MACD Histrogram : getting lower, buyer taking profit.
Support : 1550, 1540, 1530, 1515 evel.
Resistance : 1565, 1580, 1590, 1600 level.
Comment :
FKLI closed recorded losses with better volume changed hand ahead of the weekend doing 7 points discount compare to cash market while regional market ended mixed after news on European Central Bank rate hike and another earthquake hit northeast Japan(Thank God less severe this time).
Daily chart formed a down bar candle positioned lower from upper Bollinger band level after market opened 1 tick lower, traded range bound followed by 2nd session profit taking activities pressed price lower and settle near the low of the day. 
Chart reading remained unchanged suggesting a correction range bound upside biased market development possibly correcting downward testing middle Bollinger band support 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.

20110408 1539 Global Market & Commodities Related News.

Dollar falls against euro, oil at 2-1/2 year high
SINGAPORE, April 8 (Reuters) - The dollar fell to a near 15-month low to the euro on Friday amid fears of a U.S. government shutdown, while crude oil rose to a two-and-a-half year high on worries that war in Libya and unrest in the Middle East will disrupt supplies.
"People are buying shares for now, but it's not going to last long," said Mitsushige Akino, chief fund manager at Ichiyoshi Investment Management.

Oil hits 2-1/2-year high, Libya offsets Japan aftershock
SINGAPORE, April 8 (Reuters) - Oil climbed to its highest level in 2-1/2 years on Friday as supply cuts stemming from attacks on Libyan oil fields offset demand concerns spurred by a major aftershock in Japan.
"Oil prices are at a point where we could begin to see demand destruction," said Mike Wittner, head of commodities research at Societe Generale.

Libya rebel oil cargo China-bound -sources
DUBAI/LONDON, April 7 (Reuters) - China will buy the first oil cargo from Libyan rebels via trading house Vitol, sources said on Thursday, in a trial deal which is likely to clear the way for Europe to resume badly-needed purchases of Libyan oil.
Traders, however, added that it could take a long time before flows of crude from Libya reach substantial levels. The  war has cut oil output by 80 percent while rebels and government forces trade charges over attacks on oil fields.

Corn hovers near record peak ahead of USDA data
SYDNEY, April 8 (Reuters) - U.S. corn futures rose half a percent on Friday, staying near a fresh record touched in the previous session, ahead of key data likely to show a further cut in already thin corn inventories in the United States, the world's top exporter.
"We are still in a tight supply-demand situation so there's no incentive for traders to take profits before the report," said Ker Chung Yang, analyst at Phillip Futures in Singapore.

Dry weather speeds Argentine soy harvest-exchange
BUENOS AIRES, April 7 (Reuters) - The harvesting of Argentina's 2010/11 soy crop advanced quickly over the last week thanks to the lack of heavy rains, the Buenos Aires Grains Exchange said in a weekly report issued on Thursday.
Dry conditions facilitated a faster harvest in the South American country, the world's No. 1 soymeal and soyoil exporter as well as its third-biggest soybean supplier.

I.Coast cocoa export ban to end in days-UN envoy
NEW YORK, April 7 (Reuters) - Ivory Coast's presidential claimant Alassane Ouattara is expected to announce within days the end of a ban on exports of cocoa, of which the country is the world's leading producer, his U.N. envoy said on Thursday.
The country's cocoa sector is close to a return to normalcy after turmoil created by a post-election conflict between Ouattara and incumbent leader Laurent Gbagbo, envoy Youssoufou Bamba told a news conference.

EU clears 286,000 tonnes wheat exports this week
PARIS, April 7 (Reuters) - The European Union this week granted export licences for 286,000 tonnes of soft wheat, taking the total since the beginning of the 2010/11 (July-June) season to 15.7 million tonnes, official data showed on Thursday.   
The weekly volume was well down on the prior week's haul of 480,000 tonnes but the total so far this season was still up sharply on the 13.7 million tonnes of licences cleared by the same stage in 2009/10.

Copper rises on demand prospects, weaker dollar
SINGAPORE, April 8 (Reuters) - Shanghai copper gained 1 percent on Friday, while the metal rose 0.8 percent in London, as investors continued to bet on demand prospects amid a global economic recovery, while a weaker dollar helped buoy sentiment.
"The commodities market seemed to have regained a life of its own, while in the past two years we saw a very strong correlation between anything that happened on the macroeconomic front and commodity prices," said Yingxi Yu, an analyst at Barclays Capital.

Gold surges to record on euro, silver hits 31-yr top
SINGAPORE, April 8 (Reuters) - Gold struck another record high on Friday as the dollar weakened against the euro, while silver hit a 31-year high after ETF holdings jumped to an all time high on inflation worries driven by a surge in oil prices.
"Maybe there is some dollar-related buying because it's weakening. People see the ETF increasing a bit, so they want to buy some gold," said Ronald Leung, director of Lee Cheong Gold Dealers in Hong Kong.

20110408 1335 Global Market & Commodities Related News.

GLOBAL MARKETS: Asian shares crawl higher; euro retreats
SINGAPORE, April 8 (Reuters) - Asian shares inched up on Friday, as it appeared a strong aftershock in Japan's earthquake-ravaged northeast that hit U.S. and European markets had not done major damage.
The euro retreated from 14-month highs after the European Central Bank's widely expected interest rate rise and a broad sell-off in the yen stalled. 

Oil : Oil rises to 2-1/2-yr high on Mideast turmoil
NEW YORK, April 7 (Reuters) - Oil prices ended at  2-1/2-year highs on Thursday as supply worries tied to fighting in Libya and Middle East turmoil overshadowed demand concerns spurred by a boost in euro zone interest rates and as a major aftershock struck Japan.
"At current crude oil prices, the risk is turning more and more to the amount of potential demand destruction,' Petromatrix analyst Olivier Jakob said.

NATURAL GAS: Natural gas falls 5th day, hit by EIA, technicals
NEW YORK, April 7 (Reuters) - Front-month U.S. natural gas futures ended lower on Thursday for a fifth straight day, pressured by increasingly bearish technicals and a government report showing a smaller-than-expected weekly inventory draw.
"The (EIA) draw was a little on the light side and bearish, but last week's (12 bcf) build really made it clear how much gas was around. It's still a very loose market," a Massachusetts-based trader said.

EURO COAL: ARA prices fall 75c, Pacific coal offered
LONDON, April 7 (Reuters) - European physical coal prices fell slightly by around 75 cents on Thursday but looked likely to come under near-term downward pressure from Australian and South African cargoes expected to be brought to Europe, traders and utilities said.
"Given the right freight -- and there are plenty of cape shipowners who desperately want to get their ships into the Atlantic where all the action is -- you can get better prices in Europe for Australian coal," one trader said.

COMMODITIES: Corn to new high but ends lower; new peak in gold
NEW YORK, April 7 (Reuters) - U.S. corn futures set new record highs on Thursday before ending slightly lower on profit-taking ahead of a key government crop report, and gold finished higher after hitting all-time peaks for a third straight day.
"From an inflation-fighting standpoint, things are going to have to get a lot more serious before it starts to spook investors," Matthew Zeman, chief trader at Chicago's Kingsview Financial, said, referring to the ECB hike. "A 25 basis-point hike is not going to have a huge impact."

IMF warns oil becoming scarcer and pricier
WASHINGTON, April 7 (Reuters) - The International Monetary Fund on Thursday warned that the global economy was entering a period of scarcer oil that could drive prices up rapidly.
In new analysis by the Washington-based global financial institution, the IMF said market tensions were increasing between growing demand for oil from fast-growing emerging market economies, like China, and production constraints due to maturing oil fields.

Libya rebel oil exec urges NATO to protect fields
BENGHAZI, Libya, April 7 (Reuters) - An oil executive in east Libya said on Thursday rebels wanted more NATO air strikes to defend oilfields in rebel areas after attacks by Muammar Gaddafi's troops this week forced them to halt production.
Two employees of the Arabian Gulf Oil Company (AGOCO) are still missing after Gaddafi forces attacked Misla field with rockets, setting fire to at least one oil tank, the company's information manager, Abdeljalil Mayuf, told
Reuters on Thursday.

20110408 0950 Global Economic Related News.

U.S: Consumer credit rises in February on student loans. Credit climbed USD 7.62b, the most since June 2008, to USD 2.42tr after increasing a revised USD 4.45b in January, the Fed said in Washington. (Source: Bloomberg)

U.K: BOE holds rate at 0.5% as MPC puts recovery before inflation. The Bank of England kept its benchmark interest rate at a record low as policy makers judged the need to aid the recovery took precedence over the fastest inflation in more than two years. The Monetary Policy Committee, led by Governor Mervyn King, set the key rate at 0.5% for a 26th month. It also left its bond-purchase program at GBP 200b (USD 327b). (Source: Bloomberg)

Spain: Sold EUR4.13b (USD5.9b) of three-year bonds and its borrowing costs fell after Portugal said it would seek a European Union bailout. Spain sold the bonds at an average yield of 3.568%, compared with 3.592% when it sold debt of similar maturity on March 3, the Treasury said. Demand was 1.79 times the amount offered, compared with 3.04 times on March 3, and the amount sold compared with a maximum target of EUR4.5b. (Source: Bloomberg)

Japan: BOJ unveiled a lending program to help companies in areas affected by the nation's record earthquake, while voicing concern the disaster may depress economic growth in coming months. The BOJ unveiled the JPY1tr (USD12b) facility as board members downgraded their economic assessment for the first time since October. The bank held the benchmark overnight rate at a range of zero to 0.1% and kept unchanged a credit program and an asset-purchase fund that represent its main policy tools. (Source: Bloomberg)

Australia: Employers added more workers than economists forecast in March, led by hiring in the mineral- and energy-rich states of Western Australia and Queensland and sending the local currency to a record. The number of people employed rose by 37,800, rebounding from a revised decline of 8,600 in February. The jobless rate fell to 4.9% from 5%, matching a two-year low set in December. (Source: Bloomberg)       

South Korea: Producer prices rose 7.3%, biggest gain in 28 months
South Korea’s producer prices rose at the fastest pace in more than two years, bolstering the case for the central bank to raise interest rates for a third time this year. Prices increased 7.3% in March from a year earlier, the biggest gain since Nov 2008, after climbing 6.6% in February. (Bloomberg)

Europe: Portugal to start talks on bailout as Spain threat eases
Portugal is set to start hammering out a bailout package that may total EUR75bn as it becomes the third euroregion country to seek European Union aid. The Portuguese government will make a formal aid request to the European Commission today. (Bloomberg)

Europe: Trichet keeps door open to more rate moves to tame inflation
European Central Bank President Jean-Claude Trichet left the door open for further interest rate increases to tame inflation after raising borrowing costs for the first time in almost three years. “You know from our own doctrine that we always do what is necessary to deliver price stability over the medium term,” Trichet said. The central bank has just raised interest rate by 25bps to 1.25% yesterday. (Bloomberg)

US: Jobless claims fell 10,000 last week to 382,000
Fewer Americans filed first time claims for unemployment insurance last week, indicating the labor market is recovering. Applications for jobless benefits fell 10,000 in the week ended 2 April to 382,000, the fewest since 26 Feb. (Bloomberg) US: Consumer credit rises in February on student loans US consumer borrowing rose for a fifth straight month in February on an increase in non-revolving credit as education loans expanded. Credit climbed USD7.6bn, the most since June 2008, to USD2.4trn after increasing a revised USD4.5bn in Jan 2011. (Bloomberg)

Global: WTO expects trade to grow 6.5% in 2011 after 14.5% last year
Global commerce will grow 6.5% this year after expanding a record 14.5% in 2010 as economies from China to Brazil recover from the worst recession in six decades, WTO said. It sees a “greater degree of uncertainty to any forecast” for 2011 as growing inflation, unrest in the Middle East and the March earthquake in Japan have “tilted the balance of risk towards the downside”. (Bloomberg)

20110408 0949 Malaysia Corporate Related News.

KLCI chart reading :
correction range bound upside biased.

MAS: Gets cracking on B737 checks after Boeing alert. Malaysia Airlines (MAS) has started carrying out comprehensive inspections on all of its 737s aircraft following an alert by US-based aircraft maker Boeing Co of the possibility for the older model to have developed cracks earlier than expected. The concern came about following an incident involving a Southwest Airlines Co plane that split open last week, subsequently forcing the airline to ground 79 planes from service. (Source: Malaysia Reserve)

Construction: Works on MRT to start at between Nov and Dec. The Land Public Transport Commission (SPAD) announced that the project tenders for the MRT project would only be opened in July until August and actual work would start between November and December this year. The ground-breaking for tunnelling and station projects at Semantan, Cochrane and Sungai Buloh will be on July 8. (Source: New Straits Times)

Mitsui buys 30% in Integrated Healthcare
Mitsui & Co Ltd is set to emerge as a 30% shareholder in Integrated Healthcare Holdings in a RM3.3bn deal, the largest ever by a Japanese investor in Southeast Asia's healthcare sector. Integrated Healthcare Holdings (IHH), which had been fully-owned by state investment firm Khazanah Nasional, is the owner of a several strong healthcare brands in the region. It owns all of Singapore's Parkway Holdings - the biggest hospital operator in the region which it bought for USD3.5bn (RM8.4bn) last year - and Malaysia's Pantai Holdings, International Medical University and 8.8% of India's Apollo Hospitals. Mitsui, Japan's second largest trading house, is to buy a 12% stake from Khazanah for RM1.32bn and will take up another 18% by subscribing to new shares in IHH for RM1.98bn.The combined investment would be the largest merger and acquisition transaction done so far this year in Malaysia. The deal, seen to be "complementary" to both the Malaysian and Japanese parties, is expected to be completed in "a few weeks" once regulatory approval is obtained, Khazanah managing director Tan Sri Azman Mokhtar told reporters. (BT)

Lion Corp to defer debt repayment
Lion Corp is seeking the approval of some lenders to defer the repayment and redemption of several of its debts. The company told Bursa Malaysia yesterday that it had issued noticed of meetings dated 6 April this year to holders of the bond, US dollar debts and redeemable convertible secured loan stocks, all issued by Lion Corp to seek the approval of the relevant lenders for the deferment from 30 April to 31 July this year. The meeting of the lenders will be held on 26 April (StarBiz)

SPAD says the MRT will be completed on schedule
The mass rapid (MRT) system’s project delivery partner (PDP) should step in and complete any works in the MRT project if the awarded contractors fell behind schedule, said Land Public Transport Commission (SPAD) CEO Mohd Nur Kamal. “Syarikat Prasarana Negara (SPNB), the PDP and the work package contractors would sign a tripartite agreement to ensure that the MRT project development would be carried out according to the target cost and stipulated time frame. This is why we need experienced contractors to be the PDP so that it can step in and finish the job within the target cost and time in case the work package contractors fail to do so. The PDP will be compensated accordingly as per the agreement for the work package contractors,” he mentioned during the first weekly briefing session on the development of the MRT project. (StarBiz)

HK 'Superman' Ka-shing ahead in malls bid
The Cheung Kong Group, owned by Hong Kong tycoon Li Ka-shing, has emerged as the frontrunner to buy three shopping complexes put up for sale by TMW Asia Property Fund. Cheung Kong, which also helps manage AmFirst REIT in Malaysia via its affiliate ARA, is said to be going through the books of Ipoh Parade in Perak, Klang Parade in Selangor and Seremban Parade in Negri Sembilan. Sources told Business Times that Cheong Kong was selected after its offer thumped those made by two other listed companies. However, it is unclear if Cheung Kong (Holdings) Ltd made the bid directly or through one of the funds affiliated to it. Li’s Cheung Kong conglomerate is one of Hong Kong's biggest property developers and owns the world's largest operator of container ports, among others. Seremban Parade has a nett lettable area of 316,847 sq ft and sits on 1.97ha, Ipoh Parade has a nett lettable area of 594,414 sq ft on 4.14ha and Klang Parade has 696,045 sq ft of space. (BT)

Japanese disaster jolts Perodua
Perusahaan Otomobil Kedua Sdn Bhd (Perodua) says its operations are affected by the recent earthquake and tsunami in Japan. In a statement yesterday, the country's largest car company by sales, said it is assessing the situation to better understand the impact of the natural disasters on its operations. It added that inventories at its plant as well as those of its vendors are enough to cover production until May, with some adjustments. "We are in direct and continued communication with our partner in Japan, Daihatsu Motor Co Ltd, as well as our local vendors to have a better and clearer picture of the problems and appropriate counter measures to be taken," Perodua managing director Datuk Aminar Rashid Salleh said. (BT)

Nippon Steel may raise stake in Tatt Giap unit
Nippon Steel Corp, the world’s fourth largest steelmaker, says it intends to raise its stake in Tatt Giap Group Bhd subsidiary Nippon EGalv Steel Sdn Bhd, which manufactures electro-galvanised steel. Nippon Steel planned to increase its stake in Nippon EGalv to 50.1% from 10% for USD6.5m (RM19.7m) by end-June. Nippon Steel was quoted to say that it planned to make Nippon EGalv its subsidiary to boost the supply of electro-galvanised steel sheet to Japanese electronics makers in Malaysia, given that its South Korean rival, the Pohang Iron and Steel Company (POSCO) was also tapping into the market. Nippon Steel revealed that it would start producing 100,000 tonnes of fingerprint-free electro-galvanised steel sheet annually, to be used in flat-screen TV and audio products manufacturing in Malaysia. (Financial Daily)

MRCB to acquire property firm
Malaysian Resources Corp Bhd (MRCB) has proposed to acquire the entire stake in 59iNC for RM110m cash, which effectively enables the group to own 27.4 acres (10.96ha) of land in Setapak, KL. MRCB told Bursa Malaysia that the land would be developed from 2012 over a period of eight years into a mixed development with an estimated gross development value of about RM1.5bn, and expected profits of RM300m. MRCB entered into a share sale agreement with Fadzil Ahmad, Usman Suratman and Mohd Shamir Mohd Hassan to acquire 200,000 shares of RM1 each in 59iNC for RM110m cash.(Financial Daily)

20110408 0941 Global Market Related News.

DJIA chart reading : correction range bound upside biased.
Hang Seng chart reading : upside biased with possible pullback correction.
Europe stocks up on Portugal bailout, ECB ahead (Source: Reuters)
European shares rose on Monday on hopes that Portugal's decision to seek financial aid could put a brake on the region's debt crisis, while the euro fell ahead of an expected interest rate rise by European Central Bank Portugal's caretaker government requested European Union aid on Wednesday night at the urging of leading bankers who wanted a bailout to help the economy and safeguard the country's banking system. "We all knew Portugal was going that way, Spain looks like it is in a better position," said Will Hedden, sales trader at IG Index.

BOJ Picks a Micro Response to Macro Challenge, Takenaka Says (Source: Bloomberg)
The Bank of Japan’s offer of credit to cash-strapped businesses falls short of what’s needed to bolster growth after last month’s record earthquake, according to the former minister who led a clean-up of the nation’s banks.

Trichet Leaves Door Open to More Interest-Rate Increases to Tame Inflation (Source: Bloomberg)
European Central Bank President Jean-Claude Trichet left the door open for further interest-rate increases to tame inflation after raising borrowing costs for the first time in almost three years.

Consumer Comfort in U.S. Rises for Second Consecutive Week on Job Outlook (Source: Bloomberg)
Consumer confidence in the U.S. rose for a second consecutive week as an improving job market helped ease the burden of higher fuel costs.

Portugal Set to Start Talks on $107 Billion Bailout as Spain Threat Eases (Source: Bloomberg)
Portugal is set to start hammering out a bailout package that may total 75 billion euros ($107 billion) as it becomes the third euro-region country to seek European Union aid.

Jobless Claims in U.S. Fell 10,000 Last Week to 382,000 (Source: Bloomberg)
Fewer Americans filed first-time claims for unemployment insurance last week, indicating the labor market is recovering. Applications for jobless benefits fell 10,000 in the week ended April 2 to 382,000, the fewest since Feb. 26, Labor Department figures showed today. Economists projected claims would be little changed at 385,000, according to the median estimate in a Bloomberg News survey. The number of people on unemployment benefit rolls and those collecting extended payments decreased.

Consumer Credit in U.S. Rises More Than Forecast on Higher Student Loans (Source: Bloomberg)
U.S. consumer borrowing rose for a fifth straight month in February on an increase in non-revolving credit as education loans expanded, the Federal Reserve reported today. Credit climbed $7.62 billion, the most since June 2008, to $2.42 trillion after increasing a revised $4.45 billion in January, the Fed said in Washington. The February figure exceeded the median economist forecast of a $4.7 billion increase in the measure of credit card debt and non-revolving loans, according to a Bloomberg News survey.

Treasury Two-Year Yield Below Decade Average Belies Fiscal-Crisis Concern (Source: Bloomberg)
As the political debate over budget cuts in Washington threatens to bring the government to a partial shutdown, bond markets are showing little concern about the nation’s fiscal health. Yields on two-year Treasury securities fell one basis point to 0.82 percent at 9:07 a.m. in New York, below the average yield of 2.59 percent in the last decade, according to Bloomberg Bond Trader prices. Bond prices reflect expectations that lawmakers will resolve differences over the budget and avoid a crisis of confidence in U.S. assets, said John Lonski, chief economist at Moody’s Capital Markets Group.

ECB Raises Rates for First Time Since 2008 as Inflation Looms (Source: Bloomberg)
European Central Bank President Jean-Claude Trichet said the bank will continue to monitor inflation risks “very closely” after raising interest rates today for the first time in almost three years. Monetary policy remains “accommodative,” Trichet said at a press conference in Frankfurt today after the ECB raised its benchmark rate by a quarter percentage point to 1.25 percent. “It is essential that recent price developments do not give rise to broad-based inflationary pressures over the medium term.”

ECB Raises Key Interest Rate to 1.25% to Stem Faster Inflation (Source: Bloomberg)
The European Central Bank lifted interest rates for the first time in almost three years to quell inflation even as Portugal became the third nation to succumb to the region’s sovereign debt crisis. ECB policy makers meeting in Frankfurt today raised the benchmark interest rate to 1.25 percent from a record low of 1 percent, as predicted by all 57 economists in a Bloomberg News survey. It also raised the marginal lending rate to 2 percent from 1.75 percent and increased the deposit rate to 0.5 percent from 0.25 percent, maintaining 75 basis-point corridors either side of the benchmark.

Australia’s Swan Rejects Singapore Exchange Takeover of ASX (Source: Bloomberg)
Australian Treasurer Wayne Swan today officially rejected Singapore Exchange Ltd.’s bid for ASX Ltd., saying the deal was not in his nation’s interest and would have left the local bourse operator as a junior partner.

Japan’s Bonds Snap Two-Day Loss as Magnitude-7.1 Quake Weighs on Stocks (Source: Bloomberg)
Japan’s 10-year bonds snapped a two- day loss following the biggest aftershock since the day of the nation’s record earthquake on March 11, boosting the appeal of the relative safety of debt.

Most Japanese Stocks Retreat After Magnitude 7.1 Earthquake Shakes Nation (Source: Bloomberg)
Most Japanese stocks retreated, with the Nikkei 225 Stock Average headed for a weekly decline, after a magnitude 7.1 earthquake hit the country less than a month following the nation’s worst temblor on record.

China Sold Net 334.5 Billion Yen of Japanese Short-Term Debt in February (Source: Bloomberg)
China was a net seller of 334.5 billion yen of short-term Japanese debt in February, according the Ministry of Finance in Tokyo today. China bought a net 165.2 billion yen of long-term debt and sold 169.4 billion yen in securities overall in February, the data showed.

Yen Is Set for Weekly Loss Versus Euro, Pound Before German and U.K. Data (Source: Bloomberg)
The yen headed for a fourth weekly loss against the euro, the longest losing streak in 1 1/2 years, before a report that may show German exports rebounded. The yen is set for a second weekly decline versus the pound before a report forecast to show U.K. producer prices accelerated, sapping demand for the relative safety of Japan’s currency as it adds to evidence that the world’s economic recovery remains intact. The Dollar Index rose for the first time in three days yesterday after Federal Reserve Bank of Richmond President Jeffrey Lacker said the central bank could begin unwinding record stimulus by year-end.

20110408 0938 Global Commodities Related News.

Corn (Source: CME)
US corn futures close slightly lower in a modest setback from record highs. Traders remain nervous about strong demand draining low supplies ahead of next fall's harvest and expect federal forecasters to slash their end-of-season inventory outlook in a crop report Friday. The government shocked traders and sent futures soaring starting a week ago by estimating supplies as of March 1 were lower than expected. "There's a general fear of selling [corn] in front of report, especially given what happened a week ago," says Chad Henderson at Prime Agricultural Consultants. CBOT May corn slips 4c to $7.59/bushel.

Wheat (Source: CME)
US wheat futures finish lower on profit-taking and a lack of spillover support from the corn market. Traders took money off the table after prices climbed recently with corn, which hit all-time highs. Corn closed lower, opening the door for wheat to pull back, traders say. Another strong earthquake in Japan added pressure by introducing uncertainty into the markets and raising concerns about a slowdown in demand, an analyst notes. CBOT May wheat falls 9c to $7.73 1/4 a bushel, KCBT may loses 16 3/4c to $9.22 3/4, MGE May sinks 13 3/4c to $9.40 3/4.

Rice (Source: CME)
US rice futures finish sharply lower on profit-taking and a lack of spillover strength from other markets. Rice seems overpriced as global supplies are ample, says a CBOT floor trader. Meanwhile, market participants on Friday will review the USDA's latest monthly crop report for a possible reduction in the government's export forecast. Rice had been climbing with wheat, but it fell 1.2%. CBOT May rice sinks 3.2% to $13.62 1/2 per hundredweight.

FAO: Food Prices Fall In March But Seen Rising Further (Source: CME)
World food prices fell in March for the first time in eight months, the United Nations' food body said, but it warned that prices may continue to rise this year as higher output may not be enough to replenish low stock levels. The Food and Agriculture Organization's food price index, which tracks a basket of food commodity prices, fell to 230 points last month, down 2.9% from its record peak in February but still 37% above the same time last year. International prices of oils and sugar dropped the most, with the oil and fat index falling 7% on month and the sugar index down 10% from the highs of January and February. The FAO's index of cereal prices also fell by a more muted 2.6% in March, in line with a slump in international grain futures markets after Japan's earthquake and ongoing concerns over turmoil in the Middle East. But David Hallam, director of the FAO's Trade and Market Division, said the respite doesn't mean a reversal of the trend that has seen world food prices hit successive highs this year.
Wheat prices, for example, have risen more than 25% from their March lows and corn futures hit a record high this week. "All of the factors which were leading to the prices going up over the last few months are all still there," he said. "We had something similar in 2007-08, when the stocks were run down to such a level when there are shocks in the market there's no safety valve there." Food price inflation has climbed to the top of the international political agenda after contributing to protests that have rocked the Arab world and toppled the rulers of Tunisia and Egypt earlier this year. The World Bank estimates 44 million people may have been pushed into poverty by the price rises, and aid agencies warn high food costs threaten millions more.
"With many poor communities already feeling the effects of higher food prices and grain stocks in the main food exporting countries at dangerously low levels, sighs of relief in response to today's announcement by the FAO would be premature," said Oxfam's policy advi sor Luca Chinotti. Yet while every major forecasting agency is expecting a rise in world food production next year, particularly in grains, doubt remains as to whether this will be enough to sate demand given low stock levels. The FAO said it expects world wheat production to rise 3.4% to 676 million tons in 2011-12, a more optimistic prediction than the International Grain Council's forecast of 673 million tons, but the FAO warned even this may not be sufficient to replenish inventories. "I think the market's pretty tight and because of this prices will stay high and volatile," said Prabhu Pingali, the deputy director of the agriculture development initiative at the Bill & Melinda Gates Foundation.
"Growth rates have been stagnant for so long that supply hasn't been keeping up with demand and we don't have enough buffer to manage the shocks coming into the system." And even with hopes currently high for next year's output, as farmers expand production in a bid to cash in on higher prices, further weather problems could still cause more production issues this season as they did last year, the FAO's Hallam said. "If you look back to this time last year everyone was looking forward to record harvests and even in the autumn some of the major producers and exporters where still expecting major harvests," he said. "It's still a bit premature until we get more hard information about plantings to say what's going to happen."

USDA Considers Cutting Weekly Crop Reports, Other Data (Source: CME)
The U.S. Department of Agriculture may cut its weekly crop progress reports, among other possible cutbacks, a government official said. Cutting the weekly reports, which give grains traders a sense of the development of the crop throughout the season, is "on the table," Jacqueline Moore, head of the USDA's National Agricultural Statistics Service's field crops division, confirmed in an interview. She said some cuts to NASS are a foregone conclusion, and that the department has a list of possible cuts. The weekly crop progress reports detail planting rates, crop development, harvest, as well as subjective condition ratings. "The concern is if does get cut, will it come back at all?" Moore said. "Because next year's budget doesn't get any better." The agency is also looking at cutting back on its June crop report, which gives a clearer picture of how many acres farmers planted of various crops. The agency might curtail the amount of surveying it does for that report, she said.
Government officials are bracing for a shutdown assuming Congress does not pass a budget by the end of the day Friday. Moore said the extent of the agency's cuts depend on the government's final budget, which remains up in the air. "Do we cut back on the samples we do, or do we not do the first month of a forecast?" she asked. Although the weekly reports are monitored by traders, they sometimes have little effect on the markets. Some traders criticized the reports last year, saying the subjective "good to excellent" ratings for various crops did not prove to be an accurate indicator of final yields. Still, Dan Basse, president of advisory firm AgResource Co., who first raised the issue at the conference, said the reports provide vital data for a breadth of market participants. Without such reports, the market would revert "back to the 1970s, when three or four major grain companies had all the information, and the rest of us are on the outside looking in."
Basse, presenting at an agriculture conference hosted by MDA EarthSat Weather, said he was lobbying the USDA not to cut the reports and asked participants to do the same. He said in an interview the USDA was considering cuts to a variety of other reports as well, ranging from cattle and pigs to nuts.

Favorable Summer Forecast For US Corn, Soy - MDA EarthSat (Source: CME)
U.S. corn and soybean farmers should enjoy favorable growing weather this summer, meteorologists said in long-range forecasts. Temperatures won't be as hot as they were last year in the heart of the U.S. corn and soybean belt, Kyle Tapley, a senior meteorologist with MDA EarthSat Weather, said at a conference on agriculture. Hot nighttime temperatures in the central U.S. helped cause disappointing crops in 2010, particularly for corn. The summer forecast also indicates favorable precipitation, Tapley said. His forecast was echoed by Citigroup meteorologist Jeff Manna. Both also agreed that drought in the southern U.S. Plains, which is causing problems for the current winter wheat crop, will persist. "I think the big concerns are going to be across the Southern Plains, where it's going to remain warm and dry," Tapley said. With U.S. corn supplies nearing their lowest level on record, analysts say U.S. farmers must produce strong crops both this year and next to replenish supplies.
While the winter wheat crop will already be harvested by summer, a drought in the South would stress corn, soy and cotton crops. Tapley said weather in the U.S. Delta would also be hot and dry this summer. Based on the forecast, corn yields will likely be higher this season, while wheat yields will be lower, Tapley said. He said total soybean production would be down this year due to reduced acreage, not weaker yields. Tapley added that China's corn and soybean yields will likely be lower this year due to dry conditions, and that a relatively weak monsoon season in India could hurt soybean yields.

Biofuel Makers Bounce Back From Bumps In The Road (Source: CME)
When Royal Dutch Shell PLC announced its $12 billion joint venture with Brazilian sugar-cane-ethanol producer Cosan Ltd. last year, it was a massive vote of confidence in a sector that has taken a battering over the last few years. Biofuel -- gasoline substitutes made from biological sources, such as sugar cane, corn and wheat -- enjoyed a big boom in the middle of the decade as concerns grew about greenhouse-gas emissions, oil-price spikes and energy security. But the global recession of 2008 hit biofuels badly by drying up investment and putting a lot of ethanol producers out of business. A huge spike in prices that year for food crops used to make the fuel also triggered a political backlash. The sector has recently begun to stabilize, and it attracted nearly $650 million in venture capital last year. World-wide production grew to more than 100 billion liters in 2010 from 16 billion liters in 2000.
Shell says biofuels could make up as much as 20% of all transportation fuels in 30 years, up from about 3% now. The original biofuel was ethanol, made by fermenting sugar components of plant materials. Brazil has been producing it from sugar cane for decades. Ethanol largely made from corn sugars comprises nearly 10% of the gasoline pool in the U.S. As part of the post-2008 shake-out, much more research money is now flowing into so-called second-generation biofuels that, unlike ethanol, aren't made from food crops. They instead use feedstocks such as algae, municipal waste and grasses like miscanthus. While placing its big bet on ethanol, a fuel with its roots in the 1970s, Shell has backed away from more daring investments in algae-to-diesel and biomass-to-liquids. That reflects a hard-nosed calculation that such cutting-edge technologies are years, perhaps decades, away from being commercially viable.
Shell's head of downstream products, Mark Williams, said in a strategy update last year the company was faced with the "difficulty of taking these advanced biofuels to anything of scale." Great strides have been made on technology that converts sugars in plants into fuel. Although some demonstration projects for second-generation fuels are up and running, no commercial-scale conversion facilities have been built so far. Many analysts don't expect any before 2014 at the earliest. That has led to fears technical problems and cost issues may prevent advanced biofuels from becoming a viable form of energy, in the same league as solar and wind power. Such concerns could also deprive the industry of the kind of support from corporations or governments that will help it to grow. A key challenge is building a supply chain from scratch. "It's proving hard to develop the feedstock at an acceptable cost," says Susan Hansen, an analyst at Rabobank International.
"And the other problem is: where do you grow crops like miscanthus? How do you organize the logistics and transport from farmer to processing plant?" Policies have changed to reflect the scaling back of industry ambitions. In 2007, Congress passed a Renewable Fuel Standard which established a 100 million gallon nation-wide mandate for more advanced, or cellulosic, biofuel by 2010 rising to 16 billion gallons by 2022. Later, when it became clear U.S. producers would never meet that target, the 2010 mandate was slashed to 6.5 million gallons. Of the major oil companies, Shell has been one of the most aggressive investors in green alternatives to gasoline and diesel fuel, building up one of the largest portfolios of biofuels R&D projects in the business. It currently spends about $1.3 billion a year on R&D, with a significant chunk of that spent on biofuels.
Shell has invested in a Canadian cellulosic-ethanol company called Iogen Energy Corp., a biofuels start-up called Codexis Inc. and Wisconsin-based Virent Energy Systems, which transforms plant sugars from switch grass or wheat straw into fuel. But the Anglo-Dutch oil major has pulled back from some of its investments. In 2009 it sold its stake in Choren, a German biomass-to-liquids company after the full cost of scaling up its capital-intensive gasification technology became clear. "We realized the scale of these plants would be very, very big," said Mark Gainsborough, Shell's head of alternative energies. Then last year it pulled out of an algae-to-diesel venture called Cellana. Instead, its big bet has been on sugar-cane ethanol. In February last year, it announced its joint venture with Brazil's Cosan, the world's biggest producer of ethanol from sugar cane.
The move gave Shell exposure to the huge biofuels market in Brazil, where more than 80% of all new cars sold are flex-fuel models that can run on any mixture of ethanol and gasoline, and where as much as 21% of all transport fuel is from biofuels, compared with 4% in the U.S.

Putin: Russia To Restore Image As Reliable Grain Exporter - Report (Source: CME)
Russia will do everything possible to restore its reputation as a reliable grain exporter, the Interfax news agency reports, citing the country's Prime Minister Vladimir Putin. "I want to assure you that we will do everything possible to amend the situation on the grain market, to compensate supplies over the next few years and to restore our image as a reliable partner," Putin said. Russia--previously the world's third-biggest grain exporter--banned grain exports last summer, after the worst drought in more than a century slashed the Russian harvest by one-third and sent domestic food inflation soaring.

Corn closes in on record peak, U.S. data eyed (Source: Reuters)
Chicago corn futures edged up to near record highs, as thin U.S. stocks and expectations of firm Chinese demand helped purge early losses ahead of key U.S. data later this week. "Corn prices will certainly remain elevated until the U.S. finds a way to ration demand" to deal with tight supplies, said Victor Thianpiriya, agricultural commodity analyst at ANZ in Melbourne.

Ukraine 2011 spring grain 30 pct sown - report
KIEV, April 7 (Reuters) - Ukrainian farms have sown 1.3 million hectares of early spring grain for the 2011 grain harvest or 30 percent of the forecast area, a senior agriculture ministry official was quoted as saying on Thursday.
Government newspaper Uryadovy Kurier quoted the head of the ministry's planting department Oleksander Demydov as saying farms planned to sow a total of 4.0 million hectares of early spring grains this year.

Argentina wheat output seen at 13 mln tonnes-attache
WASHINGTON, April 6 (Reuters) - Following are selected highlights from a report issued by a U.S. Department of Agriculture attache in Argentina:"Wheat production for 2011/12 is projected at 13 million tonnes, lower than in 2010/11. Harvested area is expected to increase by 300,000 hectares, but yields are estimated lower than last year's record. Harvested area with corn is also expected to grow in 2011/12, to 3.4 million hectares. Production is forecast to increase significantly at 25 million tonnes estimating average weather and yields.

Little rain in sight for parched US Plains wheat
CHICAGO, April 6 (Reuters) - The U.S. Plains wheat belt was warm and dry the past day with little to no rain expected the next week, adding more stress to a crop that is struggling from a lack of moisture, a forecaster said Wednesday.
"It's a terrible situation and it continues to worsen. We are looking at another surge in hot weather by the end of the week," said Mike Palmerino of Telvent DTN weather service.

Cocoa ends up as Ivory Coast's Gbagbo holds on
Cocoa futures ended firmer on Wednesday, recouping recent losses as the prolonged conflict between presidential rivals in top grower Ivory Coast failed to be resolved as quickly as hoped. Sugar futures reeled from investor liquidation, spread trade and arriving supplies from the harvest in the important center-south region of top grower Brazil.

India may consider allowing further cotton exports
NEW DELHI, April 6 (Reuters) - India is likely to consider allowing further exports of cotton due to prospects of a bumper crop this year, Farm Minister Sharad Pawar said on Wednesday, less than a week after the trade ministry withdrew incentives for overseas sales. India, the world's second-biggest cotton producer, has already allowed export of 5.5 million bales this season, a quota which has now been exhausted.

Brazil eyes ethanol reform, sugar companies hit
BRASILIA/SAO PAULO, April 6 (Reuters) - Brazil wants to tighten regulation of the domestic ethanol market to protect fuel supplies, a senior government official said on Wednesday, a move that could ripple through global sugar markets.
But a more appealing ethanol market could in theory hit sugar output as the two products compete for the same feedstock -- cane.

Mexico sees record 10/11 sugar exports on US demand
MEXICO CITY, April 6 (Reuters) - Mexico sugar exports will soar to record highs this season as cane growers and millers aim to meet increased demand from the United States, which is expecting a supply squeeze.
Carlos Blackaller, head of the national cane growers union, said sugar exports in the 2010/11 growing year would reach 1.3 million tonnes, slightly above U.S. Department of Agriculture (USDA) forecasts of 1.232 million tonnes.

Cocoa stores in Ivory Coast still useable
LONDON, April 6 (Reuters) - The almost half a million tonnes of cocoa that has piled up in top producer Ivory Coast, as months of sanctions halted shipments, is expected to still be fit for export despite heat and humidity, analysts said.
There have been fears that the cocoa was at risk of rotting.
Jonathan Parkman, joint head of agriculture at brokerage Marex Financial, told Reuters Insider television on Wednesday that 100,000-150,000 tonnes of cocoa was unhedged and that this could have a bigger impact on prices than the resumption of shipments.

Oil Trades Near 30-Month High in New York on Libya, Middle East Conflict (Source: Bloomberg)
Oil traded near the highest in 30 months in New York as a fire burned at Libya’s Sarir field, heightening concern that the conflict in North Africa and the Middle East will spread and curtail supplies from the region.

20110408 0937 Soy Oil & Palm Oil Related News.

Soy Oil chart reading : correction range bound little upside biased.

Soybeans (Source: CME)
US soybean futures end lower, retreating after early gains following reports of another earthquake in Japan. The strong quake reignited worries about the ongoing disaster and its possible effect on the economy as well as commodity demand, analysts say. Traders are also positioning ahead of Friday's USDA supply and demand report, which gave the market early strength. But traders are expecting just minor cuts to projected soybean supplies. May CBOT soybeans close down 13 cents, or 0.9%, to $13.63 1/2 per bushel.

Soybean Meal/Oil (Source: CME)
US soy products end lower in tandem with losses in soybeans, as another earthquake in Japan fuels worries about the world economy and commodity demand. Markets retreated during the session on news of the quake. Traders are awaiting a supply and demand report Friday that will give a fresh look at soybean demand and is expected to be mildly supportive to prices. May CBOT soyoil closed down 0.46 cent, or 0.8%, to 58.32 cents per pound while May soymeal closed down $4.70, or 1.3%, to $350.90 per short ton.

Growing Malaysian supply pressures palm oil
Malaysia palm oil futures fell 1.5 percent as traders keep their focus on higher March production of the tropical although some market players point to improving demand this month. A Reuters survey showed plantations are looking at Malaysian palm oil stocks hitting a 3-month high in March and double-digit production growth as yields recover after two years of lacklustre growth."The MPOB report is likely to be bearish. We will see higher production and weaker exports," said a trader in the Malaysian capital.

Palm oil body criticises Malaysia's IOI for environment, social damage
KUALA LUMPUR, April 7 (Reuters) - An industry body for eco-friendly palm oil has censured Malaysia's second largest palm oil planter, IOI Corp , alleging it has drained peatlands and felled forests on Borneo island to expand and that it could face further sanctions.
"This ruling reinforces RAN's demand that Cargill institute basic safeguards on its supply chain to ensure it is not selling palm oil from stolen indigenous lands to American consumers," said Lindsey Allen, RAN forest programme director.

Canada oilseed output seen at 9 mln tonnes-attache
WASHINGTON, April 6 (Reuters) - Following are selected highlights from a report issued by a U.S. Department of Agriculture attache in Canada:"Expectations that Canadian farmers will seed a record amount of canola in 2011/2012 are forecast to boost Canada's total oilseed production to nearly 9 million tonnes, 11 percent above 2010/2011 production. Large crops, prospects of good prices, and increased crush capacity are expected keep crush at the high levels being experienced in 2010/2011. Total crush in 2010/2011 is expected to reach 7.5 million tonnes. High production will continue to support oilseed, meal and oil exports in 2011/2012. A reduction to normal yields is forecast to increase imports of soybeans in 2011/2012."

Brazil soy yields, area point to record output-govt
SAO PAULO, April 6 (Reuters) - Brazil's soybean crop surged deeper into record territory in the government's seventh forecast, as improved yields and greater planted area more than offset losses due to excess rains in some states.
Brazil's 2010/11 soybean crop is seen at a record 72.2 million tonnes, up sharply from a forecast of 70.3 million tonnes in March, government crop supply agency Conab said on Wednesday.

Malaysia's March palm oil stocks hit 3-month high
KUALA LUMPUR, April 7 (Reuters) - Malaysia's palm oil stocks likely hit three-month highs in March as a strong recovery in production outstripped weak growth in overseas demand, a Reuters survey showed on Thursday.
Inventories in the world's No. 2 producer probably rose 5.4 percent to 1.56 million tonnes from February, marking the highest level since last December, the median survey of five plantation houses found.