Monday, April 11, 2011

20110411 1813 FCPO EOD Daily Chart Study.

FCPO closed : 3417, changed : +18 points, volume : lower.
Bollinger band reading : side way range bound little upside biased.
MACD Histrogram : rising, buyer staying.
Support : 3350, 3300, 3270, 3250 level.
Resistance : 3420, 3450, 3470, 3500 level.
Comment :
FCPO closed recorded marginal gain with decreased volume changed hand after MPOB reported not just a higher export figure but also a higher stock and output level(all export, stock and output reported are way above market estimation) while ITS and SGS export data release showing decline. On the other hand, soy oil last Friday closed rallied higher and are now having little pullback correction.
Daily chart formed a down bar candle with lower shadow positioned near upper Bollinger band and the bandwidth expanded by small margin after market opened gap up, testing little higher followed by profit taking activities pressed price tested lower recorded loss before recovered upward partially.
Chart reading still suggesting a side way range bound little 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.

20110411 1727 FKLI EOD Daily Chart Study.

FKLI closed : 1536 changed : -14.5 points, volume : higher.
Bollinger band reading : correction range bound upside biased.
MACD Histrogram : getting lower, buyer taking profit.
Support : 1540, 1530, 1515, 1500 level.
Resistance : 1550, 1565, 1580, 1590 level.
Comment :
FKLI closed recorded substantial losses with higher volume transacted doing 8 points discount compare to cash market while regional market closed mostly lower after China official reported the first quarterly trade deficit in 7 years while Japan having another 7.1 earthquake issued tsunami warning for Tohoku about 4.30 pm local time.
Daily chart formed a wide down bar candle closed nearer to middle Bollinger band level after market opened gap up tested little higher followed by profit taking selling pressure pressed price down to closed near the low of the day. 
Chart study still suggesting a correction range bound upside biased market development possibly correcting downward testing lower support level and this could be a substantial correction. Indicator wise, there could be a longer time frame MACD downward convergence taking place waiting for the MACD to cross down for confirmation(plotted downward lines).
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.

20110411 1245 Global Market & Commodities Related News.

GLOBAL MARKETS: Oil at 2-1/2 year high on supply concerns, euro shines
HONG KONG, April 11 (Reuters) - U.S. crude oil futures topped $113 a barrel on Monday for the first time since September 2008 on supply concerns while the euro climbed on increasing expectations of a rate hike by the European Central Bank in July.
"The KOSPI is expected to take a breather after it rose for four straight weeks. Oil prices have climbed and corporate earnings forecasts have been revised downwards," Kim Hak-kyun,   an analyst at Daewoo Securities, said. 

OIL: Crude rises above $113, highest since Sept. 2008
TOKYO, April 11(Reuters) - U.S. crude futures rose above $113 a barrel on Monday, their  highest level since September 2008, as a weak dollar continued to support a recent rally in commodities.
Top oil exporter Saudi Arabia would have "no problems" producing at its claimed 12.5 million barrels per day (bpd) capacity if the market needed the oil, a senior Gulf source told Reuters on Sunday.

NATURAL GAS: Natural gas falls for 6th day on weather, supplies
NEW YORK, April 8 (Reuters) - Front-month U.S. natural gas futures ended lower on Friday for a sixth straight day, undermined by mild weather forecasts, bearish technicals and concerns about high supplies.
"There's some support in the $4 area, but the weather doesn't look very bullish right now. If it still looks really mild on Monday, we could move a little lower," a southern-based commodity trading advisor said.

COMMODITIES: Gold hits record; CRB at 2-1/2 year high
NEW YORK, April 8 (Reuters) - Gold hit new record highs on Friday and a key commodities index scaled its highest levels since 2008 as a tumbling dollar made investors snap up inflation-sensitive raw materials as a hedge.
"Positive sentiment is feeding through," said Daniel Major, analyst at London-based investment bank RBS. "Investors' money is coming back into the sector after a risk aversion period."

China's top refineries to raise April runs moderately
BEIJING, April 8 (Reuters) - China's leading refineries will raise their crude oil throughput in April by 2 percent from the lowest daily volume in a year in March, as a major plant ramps up operations after maintenance and a fuel price hike eases the burden of soaring crude costs.
But industry officials still warned that the price hike was not big enough to boost refining margins.  

20110411 1226 Global Economic Related News.

China: Export growth shows economy tolerating rate increases
China’s faster-than-expected growth in exports and imports last month may allow Premier Wen Jiabao to strengthen his fight against inflation, which probably exceeded his target for the ninth straight month in March. Overseas shipments jumped 35.8% last month while imports climbed 27.3% to a record, pulling the trade balance unexpectedly into surplus after a USD7.3bn shortfall in February, the customs bureau said yesterday. Inflation accelerated to 5.2% in March, exceeding the government’s 2011 target of 4% for the third month, according to the median estimate in a Bloomberg News survey. (Bloomberg)

China: Reports first quarterly trade deficit in seven years
China’s first quarterly trade deficit in seven years may ease pressure on the world’s biggest exporter to allow faster appreciation of the yuan. Asia’s largest economy had a deficit of USD1.02bn in the first three months of the year compared with a surplus of USD13.9bn a year earlier, the customs bureau said on its website today. Imports jumped 32.6% to a quarterly record of USD400.7bn, helped by stronger domestic demand and higher global commodity prices, the bureau said. China’s trading partners, including the U.S., say faster yuan appreciation is needed to help address global imbalances that contributed to the financial crisis. Premier Wen Jiabao said last month exchange-rate reform must be gradual to maintain social stability, and that boosting domestic demand is the best way the nation can contribute. (Bloomberg)

China: Wen urges regions to curb real estate in drive to restrain inflation rate
Chinese Premier Wen Jiabao asked local governments to take responsibility to keep housing affordable and said stabilizing consumer prices in the country is the top priority. The Chinese government is intensifying efforts to curb speculation in the real-estate market after housing prices gained for 19 consecutive months through December. Consumer prices in February climbed 4.9% from a year earlier, exceeding the government’s annual inflation target of 4%. (Bloomberg)

Japan: Edano says Japan doesn’t need BOJ to help fund disaster relief
Chief Cabinet Secretary Yukio Edano said Japan can fund earthquake rebuilding without the central bank purchasing government bonds, the clearest signal yet that Prime Minister Naoto Kan won’t embrace more aggressive plans for stimulating the economy after last month’s disaster. We will secure necessary funding for reconstruction,” Edano said in a roundtable interview yesterday in Tokyo. “There will be difficulties, but I believe we can secure enough funding without the Bank of Japan underwriting bonds.” Some lawmakers have called for the BOJ to directly purchase bonds to fund rebuilding from the 11 March earthquake and tsunami that devastated the country’s northeast, a proposal central bank Governor Masaaki Shirakawa has rejected. While Edano last week said an initial spending package could be as much as JPY4tn (USD47bn), he gave no specifics yesterday as to where the funding will come from. (Bloomberg)

US: Retail sales in US probably rose as job gains overcame surge in gasoline
U.S. retail sales probably climbed in March, indicating an improving labour market is helping Americans cope with rising gasoline prices, economists said before a report this week. A 0.5% gain would follow a 1% increase in February, according to the median forecast in a Bloomberg News survey ahead of Commerce Department figures 13 April. Data this week on consumer and producer prices will probably show food and energy costs rose. (Bloomberg)

20110411 1225 Malaysia Corporate Related News.

KLCI chart reading :
correction range bound upside biased.

Private equity eyes Notion again?
Market talk of possible corporate exercises has resurfaced at Notion VTec. Rumours include the potential entry of a major US-based private equity firm into the company and Nikon Corp, a current strategic shareholder in Notion, considering upping its stake in the hard disk drive (HDD) components and camera parts manufacturer. A source said talk of a private equity firm’s entry was not new, but Notion’s board was believed to have been negotiating for a higher price before it would table any proposal to shareholders. He told The Edge Financial Daily that the private equity firm was valuing Notion at about 1.7 times book. Notion’s net tangible assets (NTA) per share stood at RM1.55 per share as at 31 Dec 2010. (Financial Daily)

MAHB ‘serious’ on more overseas ventures
Malaysia Airports Holdings (MAHB) is “seriously” on the lookout to build and manage overseas airports in line with its aspiration to become a global leader in airport investment and management. In its financial year ended 31 Dec 2010 annual report released last week, MAHB chairman Tan Sri Aris Othman said the group was seriously looking at new, yet viable opportunities globally, particularly in Asia.( Financial Daily)

Khazanah eyes more of Apollo
Khazanah Nasional may raise its stake in India's largest hospital chain, Apollo Hospitals, as it seeks to benefit from the country's growing healthcare market. The state investment arm holds some 12.1% of Apollo, which is close to the general offer trigger of 15%. This means that once it has 15%, it must buy another 20% under Indian takeover rules. "All I can say is, watch this space," said a Khazanah spokesperson. Khazanah will soon make some RM1.32bn from the sale of a 12% block in Integrated Healthcare Holdings SB (IHH), its healthcare holding company, to Japan's Mitsui & Co Ltd. Mitsui is also buying another 18% of IHH in a new share sale for some RM1.98bn. The two deals would bring its total stake to 30%. (Business Times)

ABASS offered RM82.5m in loan for refinancing
Perangsang Selangor (KPS) last Friday announced that its 55% subsidiary Konsortium Abass SB (ABASS) had recently received a letter of offer from financial institutions for a syndicate term loan facility of up to RM82.5m. The loan would be to partly refinance its existing borrowings under its proposed refinancing exercise. (Malaysian Reserve)

IOI Corp invests SGD114.77m in JV for Singapore property development
IOI Corp is investing SGD114.77m in a Singapore property company which will develop premium office space, luxury hotel, high-end retail outlets and prestigious city residences along Beach Road in the island republic. IOI Corp said on Friday, 8 April the land, measuring 376,295 sq ft (8.64 acres), had a leasehold tenure of 99 years. IOI Corp said the investment would be via its unit, IOI Consolidated (Singapore) Pte Ltd, which had subscribed for a 49% stake in Singapore’s Scottsdale Properties Pte Ltd for cash consideration of SGD114.77m. (Financial Daily)

Parkson ventures into Indonesia
Parkson Holding’s unit East Creat International Ltd (ECI) has entered into a conditional joint-venture agreement with PT Mitra Samaya and Parkson Retail Asia Pte Ltd (Parkson Asia) to combine its Malaysian and Vietnam retail business with the Indonesian retail business of PT Tozy Bintang Sentosa (TBS). Parkson Asia is a wholly owned subsidiary of ECI. Parkson said on Friday, 8 April that collaboration involved the acquisition of the entire 100% shareholding of PT Tozy Sentosa, a unit of TBS by Parkson Asia for USD13m. Upon completion of the acquisition, Mitra Samaya will subscribe for shares in and become a 9.9% shareholder in Parkson Asia. The collaboration also involves the injection of Parkson Corporation Sdn Bhd by ECI into Parkson Asia, it said. Parkson said the financing for the collaboration would be sourced from internally generated funds. (Financial Daily)

Mamee shareholders propose to privatise company
Major shareholders of Mamee-Double Decker (M) Bhd have proposed to privatise the company from Bursa Malaysia by undergoing a capital reduction and repayment exercise under Section 64 of the Companies Act, 1965. Under the plan, major shareholders of Mamee who control the company would repay RM179.8m or RM4.39 a share to minority shareholders. The controlling shareholders would waive their entitlement from receiving cash under the capital reduction and repayment exercise. Shares of Mamee are suspended but last traded at RM3.60 a share. The company said in a statement to Bursa Malaysia the proposal for the exercise was from Tanah Subor SB, which represented the controlling shareholders of the company having 71.9% of the company's shares. (StarBiz)

Bank Islam buys 20% stake in Sri Lanka bank
Bank Islam Malaysia Bhd is now the single largest shareholder in Sri Lanka-based Amana Bank Ltd after completing its share-subscription exercise that gives the group a 20% stake in bank. “The 20% stake is acquired via a share swap of Bank Islam's existing shareholdings in Amana Investment Ltd for Amana Bank's shares and the subscription of the bank's new shares for a total consideration of about RM21.26m,” he told reporters at the completion of share subscription and technical advisory services agreement (TASA) signing between the group and Amana Bank. Zukri said the business venture was Bank Islam's maiden overseas banking venture in line with its regional expansion plan. (StarBiz) 

20110411 0936 Global Market Related News.

 DJIA chart reading : correction range bound upside biased.

 Hang Seng chart reading : upside biased with possible pullback correction.

Seven reasons why the Fed won't follow the ECB
WASHINGTON, April 7 (Reuters) - The U.S. Federal Reserve is in no hurry to follow Europe down the interest rate-hike trail and probably won't budge from its ultra-easy policy stance until inflation and employment draw nearer to its goals.
The European Central Bank's well-telegraphed rate hike on Thursday may be the first of several this year as high oil costs drive consumer prices above the ECB's target.

Dollar falls against euro, oil at 2-1/2 year high
SINGAPORE, April 8 (Reuters) - The euro rose to a near 15-month high against the dollar on the single currency's widening yield advantage, while oil surged to a two-and-a-half year high on worries that war in Libya and unrest in the Middle East will disrupt supplies.   "So far this year commodities are relatively unshaken by bad news on the macro front," said Yingxi Yu, an analyst at Barclays Capital. "The market is comfortable with the expectations of a recovering global economy with an emphasis on the developed world rather than the developing world." .

Retail Sales in U.S. Probably Rose as Job Gains Overcame Surge in Gasoline (Source: Bloomberg)
U.S. retail sales probably climbed in March, indicating an improving labor market is helping Americans cope with rising gasoline prices, economists said before a report this week.

Obama to Propose New Deficit-Cutting Plan, Plouffe Says (Source: Bloomberg)
President Barack Obama, following up on the budget deal he reached with congressional leaders that averted a government shutdown, will announce long-term proposals this week for cutting the federal deficit, White House adviser David Plouffe said.

Dollar Advances as U.S. Lawmakers Agree to Spending Cuts to Avert Shutdown (Source: Bloomberg)
The dollar gained, snapping a two- day drop versus the yen, after U.S. lawmakers pulled the government back from the brink of a shutdown by agreeing to cut about $38 billion from federal spending this year.

Treasuries Decline Before Inflation Reports, Three Debt Auctions This Week (Source: Bloomberg)
Treasuries fell, extending a three- week loss, as economists said three government reports this week will show inflation is quickening.

China’s Export Growth Shows Economy Tolerating Rate Rise (Source: Bloomberg)
China’s faster-than-expected growth in exports and imports last month may allow Premier Wen Jiabao to strengthen his fight against inflation, which probably exceeded his target for the ninth straight month in March.

China 2011 Car Sales May Grow Slower Than Automakers’ Estimates (Source: Bloomberg)
China’s passenger-car sales may grow at a slower pace this year than was earlier estimated by a group of the nation’s automakers after the government ended incentives for purchases and raised fuel prices.

China’s March Car Sales ‘Below’ Expectations as Incentives End (Source: Bloomberg)
China’s passenger-car sales grew in March at a pace that was below forecasts after incentives ended and fuel prices rose, the China Association of Automobile Manufacturers said.

China Reports First Quarterly Trade Deficit in Seven Years (Source: Bloomberg)
China’s first quarterly trade deficit in seven years may ease pressure on the world’s biggest exporter to allow faster appreciation of the yuan.

Stiglitz Calls for New Global Reserve Currency to Prevent Trade Imbalances (Source: Bloomberg)
The world economy needs a new global reserve currency to help prevent trade imbalances that are reflected in the national debt of the U.S., said Nobel-prize winning economist Joseph Stiglitz .

Edano Says Japan Doesn’t Need BOJ to Help Fund Disaster Relief (Source: Bloomberg)
Chief Cabinet Secretary Yukio Edano said Japan can fund earthquake rebuilding without the central bank purchasing government bonds, the clearest signal yet that Prime Minister Naoto Kan won’t embrace more aggressive plans for stimulating the economy after last month’s disaster.

Japanese Stocks Drop as Oil Prices Surge, Citigroup Downgrades Carmakers (Source: Bloomberg)
Japanese stocks fell, led by carmakers, as Citigroup Inc. lowered its rating on the country’s auto sector, and after oil prices rose, sparking concern higher energy costs will damage corporate earnings.

Germany Reignites Debt Concerns With Greek Warning as Portugal Seeks Aid (Source: Bloomberg)
Germany warned that deficit-scarred Greece might need more financial relief, reviving European debt concerns just as Portugal seeks an 80 billion-euro ($116 billion) aid package. German Finance Minister Wolfgang Schaeuble said it is unclear whether Greece, the root of the year-old debt crisis, will need another cut in its bailout rate or a further extension of repayment terms to return to fiscal health.

Portugal must agree "harder" reforms to get aid
BUDAPEST, April 8 (Reuters) - Euro zone finance ministers told Portugal on Friday that it would have to implement new economic reforms that went beyond those proposed by its outgoing government if it hoped to secure aid from the EU and IMF.
Portugal bowed to intense pressure from financial markets and its European partners this week and became the third euro zone country after Greece and Ireland to request financial help from the European Union and the International Monetary Fund.

Indonesia Central Bank May Delay Interest-Rate Increase as Inflation Eases (Source: Bloomberg)
Indonesia’s central bank will probably extend a pause in raising interest rates after inflation slowed for a second month in March.

FOREX-Euro at 15-month high vs dollar on rate view
NEW YORK, April 8 (Reuters) - The euro rose to a 15-month high against the dollar on Friday, supported by expectations of more euro zone interest rate hikes, while the prospect of a U.S. government shutdown pushed the dollar broadly lower.
The euro was also helped by reported Middle East sovereign demand, though traders expected the single currency to struggle to breach $1.4430, where there was talk of a large option barrier being defended.

20110411 0933 Global Commodities Related News.

Corn (Source: CME)
US corn futures close higher as traders discount USDA's steady season-end supply forecast to focus on concerns about strong demand draining low inventories. Market participants had expected supplies to drop to a fresh 15-year low after USDA's report on March 1 stockpiles, issued last week, indicated demand had been stronger than expected. Futures prices still need to rise to curb demand, analysts say. "We haven't rationed anything yet. That's a little unnerving," says Bill Gentry of Risk Management Commodities. Surging crude oil prices and a weak dollar added support, traders note. CBOT May corn jumps 9c to $7.68 a bushel.

Wheat (Source: CME)
US wheat futures finish firmer, with CBOT prices rallying sharply. Market participants unwound long KCBT wheat/short CBOT wheat spread trades to take profits after KCBT wheat climbed recently on concerns about a drought reducing production in the Plains, traders say. USDA signaled demand may improve for soft red winter wheat, traded at CBOT, as livestock producers increasingly feed wheat to animals instead of expensive corn. CBOT May wheat climbs 24 1/4c at $7.97 1/2 a bushel; KCBT May rises 10c to $9.32 3/4; and MGE May jumps 12 1/2c to $9.53 1/4.

Oats (Source: CME)
US oat futures climb the daily, exchange-imposed limit of 20c/bushel on poor weather threatening the next harvest. Drought is stressing the crop in Texas while cool, wet weather could delay planting in the northern Plains and Canada. Oats for May delivery rose 20 cents or 5.4% to $3.93 1/2 a bushel.

Rice (Source: CME)
US rice futures settle modestly higher in a rebound from a one-week low. Futures felt spillover support from gains in the neighboring wheat, corn and soy markets, traders say. The USDA's April crop report was a bit of a mixed bag today, as it cut the forecast for world rice production and season-end supplies but raised the forecast for domestic season-end stocks. CBOT May rice closes up 6c at $13.68 1/2 per hundredweight.

USDA Seeks To Spur Ethanol Pumps At Gasoline Stations (Source: CME)
The U.S. Department of Agriculture will soon begin helping gasoline stations install new pumps that can dispense ethanol in an effort to curtail the nation's dependence on petroleum-based fuel, USDA Secretary Tom Vilsack said. The USDA will soon begin handing out grants and loan guarantees to gasoline stations that want to install costly new "blender pumps" that would allow drivers to buy fuel with a higher ratio of corn-based ethanol. Most gasoline sold in the U.S. is mixed with 10% ethanol, but there is a growing fleet of flexible fuel vehicles that can run on an 85%-ethanol blend, or E85, in the U.S. but not enough pumps that dispense it, Vilsack said. There are only about 2,350 fueling stations out of more than 110,000 that offer E85 pumps in the U.S., according to the USDA. Vilsack said it costs about $120,000 to install a blender pump.
New blender pumps would also make it easier for drivers of conventional cars to increase the ethanol content of the gasoline they buy. The Environmental Protection Agency released a decision that newer vehicles can safely run on gasoline with a 15% blend of ethanol. Vilsack said the grants and loan guarantees represent a role the USDA is playing in President Barack Obama's pledge to cut U.S. dependency on foreign oil by one-third by 2025. The USDA goal, Vilsack said, is to increase the number of flexible fuel pumps across the country by 10,000 over the next five years. There is opposition to the government's support of corn-based ethanol. Livestock producers argue that the ethanol industry pushes corn prices higher by consuming so much of the commodity that is also used to feed animals. The ethanol industry is expected to consume 5 billion bushels of corn this year, almost as much as the 5.2 billion bushels that will be used to produce livestock feed, according to USDA data.
Farmers produced 12.4 billion bushels of corn last year. Congress also provides hefty support for the ethanol industry with a 45-cent-a-gallon subsidy that is paid to gasoline blenders that include ethanol into fuel.

High Corn Prices Here To Stay (Source: CME)
It's a good year for ears. U.S. farmers expect to plant 92.2 million acres of corn in 2011, the second most since 1944. Yet corn futures hit an all-time high of $7.73 1/4 a bushel this week, more than double a year ago, driven by soaring demand for corn for use as animal feed and in ethanol production. There may be further grain gains. Normally, higher corn plantings in the U.S. - the world's largest corn producer -- would dampen prices. And higher corn prices would dampen demand. But so far there is little evidence of either. Instead, U.S. corn stocks have fallen 15% year-on-year, leaving them equal to around 5% of annual demand - enough to cover 18 days of U.S. consumption - sharply down from over 13% in the last two years. Prices will have to rise much higher before demand starts to fall. With meat prices also high, livestock farmers may only lower demand or seek feed substitutes like wheat when corn prices reach $8.60 per bushel, Goldman Sachs estimates.
Similarly, oil prices are also rising faster than corn, so ethanol producers - who consume 40% of corn output - are also unlikely to cut demand, particularly as gasoline blenders receive a tax credit of $0.45 per gallon for gasoline containing ethanol. Corn prices will need to rise above $10 per bushel before ethanol production costs rise above gasoline prices, Goldman says. Meanwhile supply constraints could re-emerge. The Department of Agriculture forecasts corn yields this year at 160 bushels per acre, up from 153 last year, but that assumes good growing conditions. Even then, the stocks-to-demand ratio, says Rabobank, would only improve to 6.9%, still the lowest since 1995-6. Fallow land is scarce - planned increased corn acreage comes at the expense of crops like soy beans, where prices are also rising. What might help prices lower? A reassessment of the market-distorting ethanol subsidy seems unlikely given the U.S. desire to increase ethanol's role in the energy mix.
Sharply lower oil prices would help as would a long, hot summer that boosts yields. In the meantime, high corn prices look here to stay.

Corn jumps 1 pct, nears record peak ahead of USDA data
SYDNEY, April 8 (Reuters) - U.S. corn futures rose 1 percent, closing in on 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.

Corn traders reevaluate demand with prices at record
CHICAGO, April 8 (Reuters) - With corn prices at record highs, grain traders are paying more attention to the demand outlook, to gauge how big the U.S. corn supply will be in the coming months.
Rising ethanol production, which now consumes about 40 percent of the U.S. corn crop, has complicated the task of predicting when users will start to cut back purchases in the face of high prices.

METALS-Copper up, tin hits record on demand prospects
LONDON, April 8 (Reuters) - Copper rose about 2 percent to its highest level in a month on Friday as a weaker dollar and expectations for increasing demand boosted investor sentiment.
Amid a broad rally in the metals complex, three-month tin on the London Metal Exchange  reached a record $33,000 per tonne, lead  a three-year high of $2,861.75 and aluminium  its highest since August 2008 at $2,713.25 a tonne.

Bloated Prices Mean Thin Margins For China's Food Producers (Source: CME)
China's food manufacturers are suffering from indigestion. The cause? Sustained high prices for agricultural products and government controls on retail prices. At the end of 2010, Beijing was claiming success in the fight against rising food prices. Months later, they remain stubbornly high. The Ministry of Agriculture's index of wholesale food prices has ticked down only slightly from a holiday-induced peak at the end of January. That's bad news for Beijing as it struggles to stem inflation. Food is the largest component of the consumer price index, and if March's reading goes above 5%, as expected, food will have played a large role. Higher agricultural prices, and the government's attempt to control them, are also bad news for food manufacturers. Tingyi (Cayman Islands) Holding Corp, China's largest producer of instant noodles, and Want Want China Holdings Ltd, a major producer of snack foods, both saw gross margins shrink in 2010 due to rising input prices.
Tingyi announced plans to increase retail prices on its instant-noodle product by 14% as of April 1. But the powerful National Development and Reform Commission has signaled manufacturers to go slow. Prices for cooking oil and flour were capped at the end of last year. Now Tingyi and some other manufacturers of household goods, including Unilever, have delayed plans to raise prices. Direct controls on prices don't address the problem of excess demand. Indeed, they make it worse, encouraging consumption while eroding incentives to increase supply. But in the short term they do have a certain brutal effectiveness, which makes them appealing to politicians keen to be seen on the side of the consumer. The question for investors is whether the increase in input prices for food manufacturers is the result of a supply-side blip-gone with the next harvest-or a long-term effect of rising demand. The answer is, the latter.
Higher incomes in China and other emerging markets will increase demand for processed food, helping expand the market for manufacturers. Both Tingyi and Want Want, as prestige brands, can expect to take market share from less glamorous competitors. But the same higher incomes will also drive demand for the grains that are the main input for processed food products. Normally, the rising cost for these raw materials would be passed through to consumers. But with that outcome politically unacceptable, it is food processors' profit margins that will take the strain.

China copper scrap imports set to rise - trade
HONG KONG, April 8 (Reuters) - Copper scrap arrivals into China will likely rise in late April and May after importers placed more spot orders in the past month as domestic stocks fell, supplier and buyer sources said on Friday.
More arrivals to the world's top copper scrap importer would weigh on domestic prices and widen the spread between scrap and refined copper prices, an incentive for fabricators to use scrap to replace refined copper.

METALS-Copper up, tin hits record on demand prospects
LONDON, April 8 (Reuters) - Copper rose about 2 percent to its highest level in a month on Friday as a weaker dollar and expectations for increasing demand boosted investor sentiment.
Amid a broad rally in the metals complex, three-month tin on the London Metal Exchange  reached a record $33,000 per tonne, lead  a three-year high of $2,861.75 and aluminium  its highest since August 2008 at $2,713.25 a tonne.

Steel scrap price steady, poor steel sales weigh
LONDON, April 7 (Reuters) - Steel scrap prices were little changed this week but market players expected prices to fall soon as demand from top importer Turkey remained poor.
Steel scrap sold at $440-450 per tonne cost-and-freight Turkey this week, similar to last week, when it fell $5-15 per tonne.

Nippon Steel to take control of Malaysia JV
TOKYO, April 7 (Reuters) - Nippon Steel Corp , the world's No.4 steelmaker, said it is in talks with Tatt Giap  to boost its stake in their Malaysian joint venture.
It said it will increase its stake in Nippon EGalv Steel Sdn to 50.1 percent from 10 percent now for $6.5 million by the end of June.

PRECIOUS-Gold hits record high as dollar slides
LONDON, April 8 (Reuters) - Gold hit record highs on Friday and silver its strongest since early 1980 as the dollar slid to 15-month lows versus the euro, with concerns over euro zone debt and unrest in the Middle East region further supporting buying.
Spot gold  rose as high as $1,468.81 an ounce and was bid at $1,468.70 an ounce at 0857 GMT, against $1,457.45 late in New York on Thursday. Silver  was bid at $40.18 an ounce against $39.51, having earlier risen as high as $40.22.

Cocoa steady, Ouattara urges sanctions end (Source: Reuters)
ICE cocoa futures were little changed in early trading after Ivory Coast presidential claimant Alassane Ouattara called for an end to sanctions and sought to return the war-torn country to normal, despite a standoff with rival Laurent Gbagbo. Arabica coffee futures on ICE edged higher in early trade supported by a weaker dollar, having surged to close up 3 percent in heavy volume on Thursday as funds added positions. The arabicas market is underpinned by tight global supplies of high quality beans.

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.

Pakistan sees at least 25 mln T wheat from 2010/11 crop
ISLAMABAD, April 8 (Reuters) - Pakistan is expected to produce at least 25 million tonnes of wheat in its 2010/11 crop, Finance Minister Hafiz Shaikh said on Friday, higher than the initial estimate.
"We are expecting that our wheat crop this year will cross 25 million tonnes," he told reporters.

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. 

Cosan sugar retail unit not part of joint venture
SAO PAULO, April 7 (Reuters) - Cosan , Brazil's largest sugar and ethanol producer, said on Thursday its sugar retail unit will remain out of its Raizen joint venture with Royal Dutch Shell .
Cosan will put all of its 24 sugar and ethanol mills and its energy generation operations into the venture as well as the fuel distribution assets it bought from Exxon Mobil Corp  in 2008.

Oil Advances a Fourth Day in New York on Libyan Conflict, Mideast Unrest (Source: Bloomberg)
Oil advanced for a fourth day in New York as NATO escalated its air campaign over Libya and on concern unrest may spread to other energy-exporting countries in the Middle East.

20110411 0932 Soy Oil & Palm Oil Related News.

 Soy Oil chart reading : upside biased with possible pullback correction.

ITS CPO export down 21.5% to 277,698 tonnes for the period of 1~10 Apr 2011.
SGS CPO export down 8% to 327,062 tonnes for the period of 1~10 Apr 2011.

MPOB Official Data for the month of Mar 2011 vs Feb 2011
Export up 10.8%
Stock up 8.95%
Output up 29.4%

Soybeans (Source: CME)
U.S. soybeans rally, managing to shake off the effects of bearish government crop data on tight supply outlooks. Futures garner strength from traders unwinding long corn/short soybean spreads made after March 1 inventory reports, with weakness in U.S. dollar and surging crude oil futures attracting investor buying, says John Kleist of A firmer cash basis in Brazil provides further strength, but fails to challenge recent highs as South American supplies are poised to relieve the strain on tight U.S. supplies, Kleist says. CBOT May soy ends 28 3/4c or 2.1% higher at $13.92 1/4.

Soybean Meal/Oil (Source: CME)
Soy product futures soared Friday, with soyoil futures leaping to an 8-week high on spillover support from crude oil futures. The surge in crude oil above the $112 a barrel dragged soyoil futures to its high, analysts said. Crude oil influences soyoil due to their use in making renewable fuels. Soymeal followed soybeans higher, in a recovery from recent declines. CBOT May soyoil finished up 1.45c or 2.5% at 59.77 cents per pound, and May soymeal settled $6.30 or 1.8% higher at $357.20 per short ton.

China Extends Cooking Oil Price Caps; CPI Fears - Wilmar (Source: CME)
Chinese government officials have asked Singapore-based agribusiness giant Wilmar International Ltd. to hold off increasing prices of cooking oil, a Wilmar spokesman said. The policy, which also affects Chinese producers of the household essential including Cofco Ltd. and Chinatex Corp., effectively extends a price cap first imposed in November that the companies at the time had believed would expire around March. The government's move is a sign that Beijing is ramping up efforts to check soaring inflation that has fanned widespread public discontent, even as economists widely anticipate March inflation to top two-year-high levels reached in February. "The Chinese government has requested that we hold off on price increases," a spokesman for Wilmar, which operates in China as Yihai Kerry Group, said. Still, Beijing has also indicated it is mindful of the need to accommodate companies' thinning margins even as it seeks to contain sharply rising food inflation.
The government has been working with affected companies and has tried to accommodate producers' needs, said the spokesman, who didn't wish to be named. In the past, Beijing has released subsidized edible oil to refiners to help producers tide over such periods. Last week, Beijing asked major downstream food producers including instant noodles maker Tingyi (Cayman Islands) Holding Corp. and snack producer Want Want China Holdings Ltd. to hold off on similar price hikes. Anglo-Dutch consumer goods producer Unilever PLC had also planned to raise the prices of detergent and shampoo late last week, but a company spokesman said it was dissuaded by officials from the National Development & Reform Commission, China's economic planning agency. "We were asked, and we chose to comply," the spokesman said. In December, the commission requested major flour producers put a lid on prices. The duration of the caps isn't clear.
Company executives generally believe they would have to reapply to the commission for permission to raise prices. China's price caps are an informal reintroduction of a controversial year-long policy that went into effect in January 2008. The policy was broadly applied, hitting pork, cooking oil, eggs, flour and liquefied petroleum gas among other products. Companies were instructed on how and when to report price increases. The policy also allowed the government to reset prices as it deemed necessary. Cofco and Chinatex officials couldn't be reached Friday. The move will almost certainly hurt corporate margins. In December, as soyoil prices rose 13% from October levels, crushers were still able to rely on a margin of around $20-$50 a metric ton.
Global soybean prices, which feed into imports that are largely used to manufacture cooking oil, have surged since, reaching two-and-a-half-year highs this year, with upward pressure still present as U.S. soybean acreage appears set to decline in the current crop year.

Argentina Soy Harvest Pace Increases (Source: CME)
The pace of Argentina's soy harvest picked up over the last week, with conditions mixed, but surprisingly good in many areas, the Buenos Aires Cereals Exchange said in its weekly crop report. To date, over 14% of the soy crop has been harvested, with final production estimated at 48.8 million metric tons, according to the exchange. Argentina is the world's third largest soybean exporter and leads soymeal and soyoil exports. Meanwhile, the corn harvest has slowed, as farmer focus on bringing in soybeans and due to early planting delays due to drought, the exchange said. The harvest pace is about 20 percentage points behind what it was at this point last year, according to the exchange. About 30% of the corn crop has been harvested so far, with production seen at 19.5 million tons. Argentina is the world's second largest corn exporter. The exchange also slightly raised its forecast for sunflower seed production to 3.4 million tons from 3.3 million, with almost 96% of the crop harvested so far.
The country ranks among the world's leading sunflower seed oil exporters.

Rosy demand outlook boosts palm oil futures
KUALA LUMPUR, April 8 (Reuters) - Malaysian palm oil futures rose 0.7 percent on hopes of higher exports this month as consumers shift to the tropical oil since competing soyoil prices rise in tandem with soaring grains markets.  "Technically, the market is trading sideways. So long as the spread is wide we won't see drastic movement," said another trader in Kuala Lumpur.

Robust demand lifts India 2010/11 oilmeal exports
NEW DELHI, April 8 (Reuters) - India's oilmeal exports in 2010/11 rose by more than half to 5.1 million tonnes as higher output helped meet growing demand from traditional buyers such as Japan and Vietnam where improving economic conditions led to more purchases.
Soymeal exports rose in the year despite rejection of some cargoes by Vietnam in the last few weeks over quality issues. Vietnam has since started taking deliveries.

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.

China's Soybean Imports Soar 51% on Month, Fall 13% on Year on Low Margins
Soybean imports by China, the world’s biggest, climbed 51 percent in March from the lowest level in more than two years. Shipments fell 13 percent from the same month last year. Inbound movements were 3.51 million metric tons compared with 2.32 million tons in February and 4.01 million tons in March last year, according to customs data released today. The February total was the least since October 2008.