Wednesday, May 4, 2011

20100504 1838 FCPO EOD Daily Chart Study.

FCPO closed : 3265, changed : -6 points, volume : higher.
Bollinger band reading : side way range bound little downside biased.
MACD Histrogram : weakening, buyer leaving.
Support : 3250, 3200, 3150, 3100 level.
Resistance : 3270, 3300, 3350, 3420 level.
Comment :
FCPO closed marginally lower with better volume changed hand while soy oil overnight closed lower due to U.S. Dollar rebounded higher and currently trading nearly unchanged.
News wise, Reuters reported that Indonesia largest listed plantation firm recorded 25.7% higher production of palm oil for the period of 1st quarter this year compare to same period last year.
Daily chart formed a up doji bar candle similar to last Friday candle positioned lower in between middle and lower Bollinger band level after market opened gap down, traded lower hit 2 weeks low and recovered upwards all the way salvaging most of the intraday losses to closed near the high of the day. 
Technical reading remained interpreting a side way range bound little downside biased market development testing support and resistance level.
When to buy : buy at support or weakness with quick cut loss and profit target.
When to sell : sell at resistant or strength with quick cut loss and profit target.

20110504 1727 FKLI EOD Daily Chart Study.

FKLI closed : 1516 changed : -10.5 points, volume : higher.
Bollinger band reading : side way range bound little downside biased.
MACD Histrogram : falling, seller taking some exposure.
Support : 1515, 1500, 1485, 1470 level.
Resistance : 1530, 1540, 1550, 1565 level.
Comment :
FKLI closed recorded loss again with increasing volume participation doing about 12.5 points discount compare to cash market that closed little lower while regional markets traded mostly in red.
News reported that higher U.S. Dollar triggered sell down in commodities influencing investor to stay caution avoid taking higher risk.
Daily chart formed a down doji bar candle closed below middle Bollinger band level with the bandwidth getting narrow after market opened little lower, edge up slightly and sell down tested lower Bollinger band level before recovered partial of intraday losses to closed off the low of the day.
Technical reading turned to suggesting a side way range bound little downside biased market development testing support and resistance level. Market looks weak for the near term as price closed below plotted upward line with MACD indicators failed to do a positive cross up.
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.

20110504 1512 Global Market & Commodities Related News.

Asia stocks fall, dollar rises as risky positions cut
SINGAPORE, May 4 (Reuters) - Asian shares fell and the U.S. dollar rose on Wednesday, with falling commodity prices spooking investors and causing a broad pullback in risk taking.
"Risky assets are having a respite, having advanced rather quickly in more recent weeks," said Andy Ji, a currency strategist and economist with Commonwealth Bank of Australia in Singapore.  

Indonesia's Astra Agro says palm oil output rises in Q1
JAKARTA, May 4 (Reuters) - Astra Agro Lestari  produced 275,100 tonnes of crude palm oil (CPO) during the first quarter, up 25.7 percent versus the same period last year, Indonesia's largest listed plantation firm said on Wednesday.
The firm had a total of 263,608 hectares of palm oil plantations by the end of the first quarter, it said in a statement to Indonesia's Stock Exchange.

OPEC oil output hits 23-month low in April
LONDON, May 3 (Reuters) - OPEC output fell to a 23-month low in April as extra oil from Saudi Arabia and Nigeria did not make up for supplies lost due to fighting in Libya and oilfield maintenance in Angola, a Reuters survey found on Tuesday.
Supply from all 12 members of the Organization of the Petroleum Exporting Countries averaged 28.42 million barrels per day (bpd), down from a revised 28.48 million bpd in March, the survey of oil companies, OPEC officials and analysts found.

U.S. corn gains as focus returns to tight supplies
SYDNEY, May 4 (Reuters) - Nearby U.S. corn futures posted modest gains in early Asian trade on Wednesday as focus returned to tight old crop supplies, while the December harvest month contract held firm on slow planting progress in the U.S. corn belt.
Corn's rise in early trade followed a 1.5 percent fall on Tuesday as the dollar rose and oil prices dropped more than 2 percent.

Ivorian cocoa exports to start soon, midcrop worry
ABIDJAN, May 3 (Reuters) - Ivory Coast cocoa exports are likely to resume by Friday, but forecasts for its mid-crop harvest may be cut by a third from the expected 300,000 tonnes over security and logistics concerns in the hinterland.
Cocoa exporters said on Tuesday they were making final preparations to resume exports after resolving a row with the new government of president Alassane Ouattara last week over taxes.

Ghana poised to crush cocoa output target
ACCRA, May 3 (Reuters) - Ghana's cocoa output is running more than 50 percent higher than a year ago, easing the market impact of delayed shipments from neighbouring Ivory Coast and putting the country on track to beat its full-season target.
Purchases declared by private buyers to industry regulator Cocobod -- the best reflection of output from the world's No. 2 grower -- hit 797,847 tonnes by April 21 since the start of the season in October, according to official data seen on Tuesday.

Dry weather still significant concern for EU wheat
LONDON, May 3 (Reuters) - Dry weather threatens to reduce wheat yields in parts of western Europe with the need for showers getting more urgent, crop analysts said on Tuesday.
"Concerns are starting to grow, certainly as we are expecting to see another largely dry week ahead of us. It is likely to impact yields," Jack Watts, analyst with the Home Grown Cereals Authority said, referring to crops in Britain, the European Union's third largest wheat producer.

Kazakhs cut wheat export forecast to 5.5 mln T
ASTANA, May 3 (Reuters) - Kazakhstan has cut its wheat export forecast for the current marketing year to around 5.5 million tonnes, its second downward revision since March, the newly appointed agriculture minister said on Tuesday.
Asylzhan Mamytbekov, former chairman of state agricultural holding Kazagro, did not give a reason for the forecast decline in shipments from Kazakhstan, the world's seventh-largest wheat exporter. The ministry's previous forecast was 6 million tonnes.

Philippines sees record dry season rice harvest
MANILA, May 3 (Reuters) - The Philippines' rice harvest in the current dry crop season may touch record high levels due to early rains in the first quarter, putting less pressure on the government to import more of the staple, Agriculture Secretary Proceso Alcala said.
Manila said last month it expects to surpass its rice production forecast of 7.6 million tonnes in the first half, which covers the dry crop period. It estimates total production this year to reach a record 17.46 million tonnes, more than 10 percent higher than last year's output.

Shanghai copper falls on dollar rebound, global outlook
SINGAPORE, May 4 (Reuters) - Shanghai and London copper fell on Wednesday, weighed down by fears of further rebounds in the dollar and global economic uncertainty, shrugging off comments by a China central bank official that inflation will moderate in the second half.
"Uncertainties that the dollar may rebound are putting pressure on commodity prices," China Futures Co analyst Yang Jun said.

US silver headed for third day of loss, dragging down gold
SINGAPORE, May 4 (Reuters) - COMEX silver dropped 3 percent on Wednesday, down for a third straight session, and gold faltered as precious metals came under pressure to correct after a strong rally in the last few weeks.
"On the way up, it (silver) was too fast and now we are seeing a general liquidation of long positions," said a Singapore-based trader.

20110504 1139 Global Market & Commodities Related News.

GLOBAL MARKETS: Commods dive, pulling stocks down; dollar jumps
NEW YORK, May 3 (Reuters) - Commodities suffered their biggest one-day loss in two weeks on Tuesday, pulling stocks on Wall Street down as well, after fear that huge price gains last month had made everything from oil to silver too costly.
"You've had a tremendous run-up here, so you've got some profit-taking and an underlying rotation" out of commodity shares into more defensive sectors, said Paul Mendelsohn, chief investment strategist at Windham Financial Services in Charlotte, Vermont.

OIL: Oil falls as India, dollar spark sell-off
NEW YORK, May 3 (Reuters) - Oil prices dropped more than 2 percent on Tuesday as an interest rate increase by India added to concerns about demand and gains in the dollar helped spark a technical sell-off.
"The slide in oil has come in response to equities losses and the dollar entering positive territory," said Matt Smith of Summit Energy in Louisville, Kentucky.

100 yrs after boom, shale makes Texas oil hot again
NEW YORK, May 3 (Reuters) - A century after a gusher at the Spindletop field in Beaumont, Texas, ushered in the first U.S. oil boom, a quieter oil craze is underway 300 miles west in a chain of counties more famous for cattle than crude.
Over the past two years, some 30 companies have moved in to a shale prospect in South Texas called the Eagle Ford that could add 420,000 barrels per day (bpd) to U.S. crude oil production, nearly matching the output of OPEC member Ecuador.

NATURAL GAS: NYMEX natgas futures open interest hits record high
NEW YORK, May 3 (Reuters) - Natural gas futures open interest hit a record high this week as prices crept higher, backed by a firm physical market and some new buying as sentiment gradually grew more bullish.
Open interest (OI), or the number of longs or shorts outstanding, in New York Mercantile Exchange natural gas futures hit a record high 992,434 on Monday, easily eclipsing the previous benchmark high of 983,802 set on April 18, 2011.

EURO COAL: DES ARA Jly trades at $127.75, down $1.00
LONDON, May 3 (Reuters) - Prompt European delivered physical coal fell by around $1.00 a tonne on Tuesday after a fall across most commodity and energy prices.
"We're seeing a lot more enquiry from China for all grades of Indonesian coal," one trader said.

COMMODITIES: Copper rises, bucks trend as silver slumps
NEW YORK, May 3 (Reuters) - Copper futures rose on Tuesday, bucking the weak trend in commodities after U.S. data showed strong factory orders, while silver fell on heavy speculative selling that sent it to its biggest two-day loss since 1987
"I think that economic news is helping copper and base metals," said Justin Lennon, analyst with Mitsui Bussan Commodities in New York.

20110504 1050 Global Economic Related News.

India: Central bank raised benchmark interest rates by 0.5 percentage points after forecasting inflation will stay at an "elevated level" until at least September. The Reserve Bank of India lifted the repurchase rate to 7.25% from 6.75%, according to a statement in Mumbai. The central bank boosted the reverse repurchase rate to 6.25% from 5.75%. (Source: Bloomberg)

Australia: RBA holds key rate at 4.75% as currency gain tempers prices. "The rising exchange rate will be helping to hold down prices for some consumer products over the coming few quarters," RBA Governor Glenn Stevens said in a statement after holding the overnight cash rate target at 4.75%, as forecast by 21 of 22 economists surveyed by Bloomberg News. (Source: Bloomberg

SEA: Philippines, Malaysia will consider rate rises to damp inflation
The Philippine and Malaysian central banks will consider raising interest rates as Asia fights accelerating inflation stoked by surging oil and food prices. Bangko Sentral ng Pilipinas will increase its benchmark rate by a quarter of a percentage point to 4.5% tomorrow, according to 12 of 16 economists surveyed by Bloomberg News. Bank Negara Malaysia may end its rate-rise pause the same day with a quarter-point advance to 3%, seven of 16 economists said in another Bloomberg survey, the highest number expecting an advance since the last boost in July 2010. (Bloomberg)

US: Orders placed with factories climb more than forecast
Orders placed with US factories rose more than forecast in March on increasing demand for machinery and computers that points to further gains in business spending. Bookings for manufacturers’ goods climbed 3%, a fifth consecutive increase, after a 0.7% February advance, the Commerce Department said today in Washington. The report also revised up estimates for capital equipment bookings issued last week. (Bloomberg)

UK: Manufacturing Index dropped to seven-month low in April
UK manufacturing index fell to a seven-month low in April amid declining consumer confidence and falling construction orders. The gauge based on a survey by Markit Economics and the Chartered Institute of Purchasing and Supply fell to 54.6 from a revised 56.7 in March, according to a report published in London today. The median forecast of 19 economists in a Bloomberg News survey was for a decline to 57 from a previous March reading of 57.1. A measure above 50 indicates expansion. (Bloomberg)

EU: Producer-Price Inflation unexpectedly accelerates
European producer-price inflation unexpectedly accelerated to the fastest in 2 1/2 years in March, adding to concerns that surging energy costs will feed through to consumers and prompt the European Central Bank to raise interest rates further. Factory-gate prices in the euro region jumped 6.7% from a year earlier, the fastest since September 2008, after a 6.6% gain in February, the European Union’s statistics office in Luxembourg said today. Economists had projected a March increase of 6.6%, according to the median of 13 estimates in a Bloomberg news survey. In the month, prices advanced 0.7%. (Bloomberg)

China: PBOC signals tightening may come even as growth cools
China’s central bank said controlling inflation is its top priority, even after a manufacturing survey indicated that growth may slow in the second-biggest economy. “Stabilizing prices and managing inflation expectations are critical,” the People’s Bank of China said in a first- quarter monetary policy report published on its website today. Bank reserve requirements have no “absolute ceiling,” the report said, restating a 16 April comment from Governor Zhou Xiaochuan. (Bloomberg)

Portugal: Agrees on USD116bn bailout with wider deficits
Portugal reached an agreement with officials preparing its European Union-led bailout that will provide as much as EUR78bn (USD116bn) in aid and allow more time to reduce the country’s budget deficit. The three-year plan set goals for a budget deficit of 5.9% of gross domestic product this year, 4.5% in 2012 and 3% in 2013, Prime Minister Jose Socrates said in Lisbon today. The government in March targeted a deficit of 4.6% this year, 3% in 2012 and 2% in 2013. (Bloomberg)

20110504 1049 Malaysia Corporate Related News.

 KLCI chart reading : 
side way range bound littel downside biased.

Axiata: Dialog, Firstsource in JV. Sri Lanka-based Dialog Axiata, a subsidiary of Axiata, announced a business process outsourcing (BPO) joint venture with India's Firstsource Solutions. Firstsource Solutions and Dialog will hold a 74% and a 26% stake respectively in Dialog Business Services (DBS). The JV will manage Dialog's customer contact management operations across its mobile, fixed line, pay television and broadband businesses. (Source: Business Times)

EonCap: Restraining order unlikely by Primus as such move may result in legal suit by HLB. Primus Pacific Partners Ltd, which last week lost its legal case against EON Capital Bhd's (EON Cap) directors and shareholders, is unlikely to file a restraining order or injunction to stop the sale of EON Cap's assets to Hong Leong Bank Bhd (HLB) for fear of opening itself up to a legal suit. (Source: The Star)

MSM listing set to be sweetest IPO this year at RM2.5b
The price discovery process for the initial public offering (IPO) of MSN Malaysia Holdings Bhd, the Felda Group controlled sugar refiner, has yielded an indicative price of RM3.50 a share, according to people familiar with the exercise. The indicative price thus values MSM at about RM2.46bn (702:98 million shares), making it the largest IPO on Bursa Malaysia so far this year. The listing exercise is being managed by CIMB Investment Bank Bhd.(Malaysian Reserve)

Motor cover for all motorists with immediate effect
All general insurers must provide motor cover to all motorists including those “displaced vehicles” -- mainly comprising private vehicles exceeding 10 years old, Bank Negara Malaysia said. The central bank’s directive, issued on Tuesday, May 3 and coming into effect immediately, was also to ensure motorcycles currently underwritten by the Malaysian Motor Insurance Pool (MMIP) would be provided motor cover.(Financial Daily)

ADCB eyes 2 times book value for RHB stake
Abu Dhabi Commercial Bank is looking at two times book value, or about RM10 per share, for its 25% stake in RHB Capital Bhd, sources told StarBiz. RHB Capital, which closed at RM8.87 yesterday, is currently trading at about 1.7 times book value. “Looking at the interest so far, they may be able to get that price” a source opined. Of the 12 enquiries made, four or five were “very serious”, having put in their bids already, the sources added.(StarBiz)

KPS gets extension for Syabas deal
Kumpulan Perangsang Selangor Bhd (KPS) has been granted a further 18 months extension to acquire a 15% stake in Syarikat Bekalan Air Selangor Sdn Bhd (Syabas) by Kumpulan Darul Ehsan Bhd (KDEB). In a filing with Bursa Malaysia yesterday, KPS said it had on 29 April entered into a supplemental agreement with KDEB to vary the terms of the share sale agreement. With the new agreement, the expiry of the put option granted to KPS by KDEB pursuant to the acquisition, was extended for a further 18 months Dec 30 Dec 2012 from 30 Jun 2011 .(StarBiz)

KPJ to raise RM500m for projects
KPJ Healthcare Bhd has launched its Islamic commercial papers/Islamic medium term notes (ICP/IMTN) programme to raise RM500m to finance hospital and healthcare projects. Affin Investment Bank Bhd has been appointed by Point Zone Sdn Bhd, wholly owned subsidiary of KPJ as principal adviser and lead arranger for the programme. (StarBiz)

Ramunia proposes capital revamp
Ramunia Holdings Bhd is proposing a capital reconstruction and a rights issue as part of its proposed regularization plan to uplift the company from its PN17 status. In its filing with Bursa Malaysia yesterday, the oil and gas service provider announced it s proposed regularization plan involving a reduction of its entire share premium account and the cancellation of 25 sen in the par value of the existing ordinary share of 50 sen each.(Financial Daily)

Sunway REIT records 3Q pre-tax profit of RM44m
Sunway Real Estate Investement Trust (Sunway REIT) posted a pre-tax profit of RM43.7m and a revenue of RM82.3m for the third quarter ended 31 March 2011. In a filing with Bursa Malaysia yesterday, the company said it registered a gross revenue of RM240.1m and a net property income of RM179m for year to date ended 31 March 2011.(Financial Daily)

TRC clinches RM45m naval contract
TRC Synergy Bhd, via its wholly-owned construction arm Trans Resources Corp Sdn Bhd, has clinched a RM45m construction arm contract from Boustead Penang Ship yard Sdn Bhd, adding its orderbook of RM1.3bn for the next three years. The company, in a statement, said the project entails the design, construction, outfitting, integration, testing and commissioning of submarine hanger and workshop facilities in relation to the Royal Malaysian Navy (RMN) contract of the in service support for two unites Scorpene class submarines.(Malaysian Reserve)

RM300m for green tech ventures
In order to drive the government’s green technology development agenda, Malaysia Debt Ventures Bhd (MDV) plans to disburse RM300m in loans over the next year for both start-ups and existing companies that produce green tech products, said managing director and CEO Md Zubir Ansori Yahaya. Speaking after the launch of MDV’s Green Technology Financing Programme here by Deputy Finance Minister Datuk Donald Lim Siang Chai yesterday, Zubir said three companies had applied for loans amounting to RM60m. (Financial Daily)

20110504 1022 Global Market Related News.

 DJIA chart reading : pullback correction upside biased.

Hang Seng chart reading : side way range bound little downside biased. 

Asian Stocks Decline as Raw Material Producers, Australian Banks Retreat (Source: Bloomberg)
Asian stocks declined, with a regional benchmark index falling for a second day, as raw material producers fell and Westpac Banking Corp. posted earnings that missed analysts’ estimates. BHP Billiton Ltd. (BHP), the world’s biggest mining company and Australia’s second-largest oil and gas producer, slipped 0.7 percent in Sydney as oil and copper futures declined. Woodside Petroleum Ltd. fell 1.7 percent. Westpac Banking Corp., Australia’s No. 2 lender, decreased 1.6 percent after posting first-half earnings. Smaller rival Australia & New Zealand Banking Group Ltd. (ANZ), which reported earnings that missed estimates yesterday, extended its decline for a second day.

IMF Raises Latin America Growth Forecast to 4.7% Amid Overheating Signs (Source: Bloomberg)
Economies in Latin American are showing signs of overheating as growth this year is poised to be faster than previously estimated, the International Monetary Fund said in a report today. Driven by high commodity prices and abundant global liquidity, Latin America and Caribbean economies should expand 4.7 percent this year, up from the 4 percent forecast made in the IMF’s previous regional outlook in October. Peru and Argentina will lead South America’s expansion at 7.5 percent and 6 percent respectively as Brazil, the region’s biggest economy, climbs 4.5 percent. Mexico will grow 4.6 percent, the IMF said.

Orders Placed With U.S. Factories Increased More Than Forecast in March (Source: Bloomberg)
Orders placed with U.S. factories rose more than forecast in March on increasing demand for machinery and computers that points to further gains in business spending. Bookings for manufacturers’ goods climbed 3 percent, a fifth consecutive increase, after a 0.7 percent February advance, the Commerce Department said today in Washington. The report also revised up estimates for capital equipment bookings issued last week. Exports to emerging economies like China, investing in new equipment and the need to increase stockpiles are driving the factory rebound at the forefront of the recovery. Federal Reserve policy makers last week said the expansion was “proceeding at a moderate pace,” boosted by stronger business spending.

U.S. factories hold up despite slower growth
NEW YORK/WASHINGTON, May 2 (Reuters) - Business at U.S. manufacturers grew a bit more slowly for a second straight month in April but their costs rose to the highest level in nearly three years, an industry report showed on Monday.
The economy showed other signs of crawling back to health, including a pickup in spending on construction, albeit too slowly to generate brisk employment gains.

Dollar Index Holds Gains Before U.S. Reports on Jobs, Service Industries (Source: Bloomberg)
The Dollar Index held onto yesterday’s gains on speculation U.S. reports will show employers added jobs for a 15th month and growth in service industries quickened, underpinning the appeal of American assets. The yen weakened versus all of its 16 major counterparts as signs that the U.S. recovery remains on track sapped demand for Japan’s currency as a refuge. The pound traded 0.2 percent from a one-week low versus the dollar before a U.K. report that may show a construction index fell for a third month, supporting the case for the Bank of England to keep interest rates low.

Dollar clambers off 33-month low, stocks fall
LONDON, May 3 (Reuters) - World stocks fell on Tuesday as investors pocketed gains after a five-session winning run, while the dollar edged off a 33-month low, sending crude and copper prices lower.
Equities have been buoyed by robust company earnings in the United States and Dollar clambers off 33-month low, stocks fall commodity prices, driven by ultra-loose U.S. monetary policy and turmoil in oil-producing Middle East and North Africa, could threaten company margins.

China’s Central Bank Signals Tightening May Continue Even as Growth Cools (Source: Bloomberg)
China’s central bank said controlling inflation is its top priority, even after a manufacturing survey indicated that growth may slow in the second-biggest economy. “Stabilizing prices and managing inflation expectations are critical,” the People’s Bank of China said in a first- quarter monetary policy report published on its website today. Bank reserve requirements have no “absolute ceiling,” the report said, restating an April 16 comment from Governor Zhou Xiaochuan.

China manufacturing growth slows in April, hit by tightening
BEIJING, May 1 (Reuters) - China's manufacturing growth slowed in April, a survey showed on Sunday, suggesting that the government's tightening efforts have weighed on the world's second-largest economy more heavily than expected.
The official purchasing managers' index for China fell to 52.9 in April from 53.4 in March, well shy of market forecasts for an increase to 54.0.

China slashes 2011 rail investment plan -media
BEIJING, April 29 (Reuters) - China's railway ministry has decided to cut its planned investment for 2011 to 400 billion yuan from the original 700 billion yuan after its chief was ousted on suspicion of wrongdoing, the Economic Observer, a local newspaper, reported on its website on Friday.
The sharp reduction in railway spending will weigh on China's overall level of investment, the single most important growth engine for the world's second-largest economy.

Subbarao Tweaks India’s Rate-Rise Playbook as Inflation Undermines Bonds (Source: Bloomberg)
The Reserve Bank of India’s decision to double the magnitude of interest-rate increases signals it is ready to step up the battle against inflation even at the risk of damping the nation’s economic growth.

Pound Weakens to Beyond 90 Pence Per Euro For First Time Since March 2010 (Source: Bloomberg)
The pound slumped to weaker than 90 pence per euro for the first time in more than a year. Britain’s currency lost as much as 1.1 percent to 90.016 pence per euro, the first breach of the 90 pence level since March 30, 2010, before trading at 89.9993 as of 3:27 p.m. in London. The pound also fell 1 percent to $1.6482.

Portugal Agrees on Aid Plan With Wider Deficit Targets (Source: Bloomberg)
Portugal reached an agreement with officials preparing its European Union-led bailout that will provide as much as 78 billion euros ($116 billion) in aid and allow more time to reduce the country’s budget deficit.

Russian Inflation Probably Accelerated to Fastest Pace Since October 2009 (Source: Bloomberg)
Russian inflation probably accelerated in April to the fastest pace since October 2009 as higher food prices and gasoline shortages fanned cost pressures.

Greece Should Shun Debt Restructuring, Premier’s Adviser Says (Source: Bloomberg)
Greece doesn’t need to restructure its debt for now and should only consider an extension of its international loans, said Herakles Polemarchakis , an economic adviser to Greek Prime Minister George Papandreou .

FOREX-US dollar index hits 3-yr low as rates outlook weighs
NEW YORK, May 2 (Reuters) - The U.S. dollar declined to a three-year trough against major currencies on Monday and will likely remain under pressure as investors seek higher rates offered abroad and shun the lower yielding greenback.
The Federal Reserve is keeping monetary policy loose while other central banks, such as the European Central Bank and the Bank of England, have already raised rates or are on the verge of doing so. Australia and Canada are expected to tighten lending conditions in the months ahead.

20110504 1019 Global Commodities Related News.

Corn (Source: CME)
US corn futures settled mixed, with nearby futures contracts ending at lowest points since late March, as investment money flowed out of old crop commodity contracts, said John Kleist, senior analyst with Funds liquidated long old crop positions, with lack of fresh supportive fundamental news weighing on prices. New crop futures however, held firm, supported by ongoing planting delays. CBOT July corn ended 10 3/4c, or 1.5%, lower at $7.23 3/4 a bushel; Dec corn ended up 1c at $6.62 1/4.

Wheat (Source: CME)
US wheat futures finished mixed, managing to rebound from earlier declines, as poor crop ratings and stalled spring-wheat plantings, provided support. The market came under pressure from broader based selling in commodities amid strength in the US dollar and falling energy and metal futures. However, the threat of smaller production prospects amid declining winter-wheat crop conditions and wet weather idling spring-wheat seedings in the northern Plains provided strength to limit losses, analysts say. CBOT July wheat finished 1 1/2c or 0.2% at $7.93 1/4.

Rice (Source: CME)
US rough rice futures climbed as traders continued to add risk premium to the market in the face of lagging plantings. Excessive rains raise the threat of lost production potential, analysts say. In Arkansas, a key growing state, and in Missouri, where flooding is an issue, traders are bracing for lost acreage. The USDA said Monday that 49% of intended US rice seedings were complete, compared to 77% last year and the 5-year average of 66%. CBOT July rice finished up 1.3% at $15.39/hundredweight.

Commodity market index longs surge in March-CFTC
WASHINGTON, April 28 (Reuters) - Net long index investment in U.S. commodities surged 4.2 percent in March from the previous month, as the red-hot commodity market kept attracting investors.
Overall net long holdings rose to $242.6 billion in March, up $9.9 billion from February, according to the Commodity Futures Trading Commission's monthly report on futures positions connected to index-based investment.

Morgan Stanley Joins Funds Buying Commodities as Goldman Says ‘Sell’ (Source: Bloomberg)
Money managers are making near-record bets on higher commodity prices, aligning themselves with Morgan Stanley after Goldman Sachs Group Inc. said investors should reduce most of their holdings. Funds held a net 1.49 million futures and options in 18 commodities by April 26, 57 percent more than a year earlier, according to U.S. Commodity Futures Trading Commission data compiled by Bloomberg. The Standard & Poor’s GSCI Total Return Index of 24 commodities beat bonds, stocks and the dollar every month since December, the longest in at least 14 years. It rose in April for an eighth month, the best stretch since 2004.

U.S. corn flat on hopes of a pick-up in planting
SYDNEY, May 3 (Reuters) - Chicago corn futures held steady on Tuesday on hopes that improving weather this week will allow a pick-up in the seeding of the U.S. crop which has been hampered by wet weather in the Midwest corn belt.
"It is a weather market, there's no doubt about it," said Jonathan Barratt, chief executive of Sydney-based Commodity Broking Services.

US corn planting 13 pct complete, off average pace
CHICAGO, May 2 (Reuters) - Wet weather brought fieldwork to a standstill in the top corn-producing states east of the Mississippi River last week, pushing overall plantings below trader estimates and the average pace of seedings, U.S. Agriculture Department data showed late on Monday.
USDA put corn plantings at 13 percent complete as of Sunday, off last year's record pace of 66 percent complete and the five-year average of 40 percent.

Heavy rains hit US southern Corn Belt, more coming
CHICAGO, May 2 (Reuters) - Heavy rains fell across the southeast U.S. Corn Belt this weekend with more headed there the next two days, which will raise Midwest river levels to record levels and further stall crop planting, a forecaster said.
The southern portions of Ohio, Indiana and Illinois saw 3.5 to 5 inches (90 to 127 mm) of rain over the weekend. The area could see another couple inches the next two days.

Arabica coffee holds near 34-year peak, sugar lower
LONDON, May 3 (Reuters) - ICE arabica coffee futures were barely changed in early trade on Tuesday but remained within sight of the prior session's 34-year peak while sugar remained on the defensive, weighed by an improving supply outlook.
Arabica coffee futures on ICE were little changed in early trade with the market looking to consolidate just below the prior session's 34-year peak.

Indian white sugar under OGL offered at $670/T-trade
SINGAPORE, May 3 (Reuters) - Indian white sugar to be exported under a government-sanctioned scheme was offered at up to $670 a tonne free on board for prompt shipment, slightly cheaper than Thai sugar, but no deals were reported, dealers said on Tuesday.
India, the world's second-largest producer after Brazil, has approved around 30,000 tonnes of unrestricted sugar exports, kicking off overseas sales of a total 500,000 tonnes under its Open General Licence policy.

India's Oct-May 2 coffee exports jump to 210,826T-Board
MUMBAI, May 3 (Reuters) - India's coffee exports jumped to 210,826 tonnes during October to May 2, from 143,345 tonnes in the year-ago period, data from the Coffee Board showed on Tuesday.
In value terms, the exports surged to $601.17 million as against $306.64 million a year earlier, the board said.

Argentina 11/12 sugar exports seen at 280,000 tonnes-attache
WASHINGTON, May 2 (Reuters) - Following are selected highlights from a report issued by a U.S. Department of Agriculture attache in Argentina: "Argentine sugar exports for marketing year 2011/12 are forecast to increase to 280,000 tonnes (raw value basis). Contacts indicate that the government is expected to closely control sugar exports as it wants to secure a well supplied domestic market.
Production is expected to grow as a result of more cane area and less severe cold weather during harvest. Planted area is estimated to grow significantly as a consequence of good returns and the expansion of the official ethanol mandate under the biofuels law.

Sulawesi April cocoa exports slide, 2011 output seen down
JAKARTA, May 2 (Reuters) - Indonesia's cocoa bean exports from the key-producing island of Sulawesi slumped 76 percent in April from a year ago to 1,570 tonnes, and cocoa output in the region is expected to fall up to 10 percent this year, an association official said on Monday.
The fall in exports last month was due to a rise in the cocoa bean export tax to 15 percent, though exports may pick up again in May as the world's third largest cocoa producer has cut the tax for shipments this month to 10 percent.

Philippines sees record dry season rice harvest
MANILA, May 3 (Reuters) - The Philippines' rice harvest in the current dry crop season may touch record high levels due to early rains in the first quarter, putting less pressure on the government to import more of the staple, Agriculture Secretary Proceso Alcala said.
Manila said last month it expects to surpass its rice production forecast of 7.6 million tonnes in the first half, which covers the dry crop period. It estimates total production this year to reach a record 17.46 million tonnes, more than 10 percent higher than last year's output.

Russia, India Wheat Exports Won't Calm World Markets - Analysts (Source: CME)
Deteriorating prospects for U.S. and European wheat crops mean even the return of exports from Russia and India to world markets this year would be unlikely to lower prices, analysts said. Futures markets for the world's second-most consumed grain have soared to within sight of record highs this year after a succession of natural disasters, including a historic drought in Russia, spurred fears of a shortage of supplies. But now even hopes that India will ship its first wheat abroad in five years and speculation that the Kremlin will lift a ban on Russia's exports as early as this summer look unlikely to calm nervous markets. "We don't expect that the Black Sea region will be able to come into the market in the way it did after the 2008 price rally to supply the world with a significant amount of cheap exports," said London-based Rabobank analyst Erin FitzPatrick. Grain dealers in Russia are starting to move stocks to ports in the hope that the government will allow exports as early as July.
Forecasts for Russia's 2011-12 exports range from around 3 million tons to as high as 10 million tons. Dmitry Rylko, of Russian forecaster Institute for Agricultural Market Studies, said dealers are hoping to free up storage space for the upcoming harvest. But Russian traders said companies are positioning grain in a bid to ship supplies quickly as soon as the ban is lifted. "I would assume the Russians want money quickly so, if they can sell, they will sell as soon as they can," said analyst James Dunsterville of Switzerland-based Agrimoney. In Asia, the U.S. Department of Agriculture's attache predicts that a record wheat crop of 84.2 million tons may prompt New Delhi to allow up to 2 million tons of exports, the first time in five years India would export grain. Still, with food security concerns high on the political agenda in both countries, a sudden surge in shipments looks unlikely.
Both Russia and India are struggling with near double-digit inflation despite holding excess government grain supplies in some areas. And with polls already under way in India and an election set for next year in Moscow, observers say domestic politics is likely to come ahead of international markets. Even exports from these producers are unlikely to make up for a fall in output in the U.S. and Europe. Wheat prices have rallied more than 20% since April 16 due to concerns for harvests in the world's two largest exporters as dryness has stressed crops in the ground and excessive rainfall has hindered planting.

Food Companies Face Test As Higher Prices Reach Shelves (Source: CME)
The appetite shoppers have for higher grocery prices is starting to be put to a serious test, as will be food makers' ability to make the increases stick. Shelf prices for packaged food have taken a meaningful step up in recent weeks, evidence that retailers are taking their turn in passing on the higher prices imposed on them from food companies like General Mills Inc., Kellogg Co. and Kraft Foods Inc. in recent months. But sales volumes are dropping as well, showing that consumers remain sensitive to higher shelf prices. The delicate balance between raising prices and how it affects volumes will take center stage as most large food companies begin to report quarterly earnings this week, including Kellogg on Wednesday and Kraft on Thursday. Retail prices for packaged-food products were up 3.2%, excluding volatile dairy items, for the four weeks ended April 11 versus last year, according to a Stifel Nicolaus & Co. analysis of Information Resources Inc. data, up from 1.9% from the prior four-week period.
The higher prices for packaged foods being reflected at retail are a welcome sign for investors, showing that retailers are both willing to pass on the higher prices to shoppers and that food makers are avoiding chasing market share with deep discounts. The higher prices provide both a boost to sales, as well as protection from higher costs. But the resulting hit to volumes has been noticeable as well, showing the risks in aggressively raising prices to counter higher costs. Sales volume, excluding dairy items, were down 3.8% in the latest four-week period compared with last year. "There's clearly a risk as to what happens to volume," Stifel analyst Christopher Growe said. "To be fair, they have no choice. It's a matter of managing their volumes." Growe estimates that food manufactures will broadly show volume growth for the year due to weak results last year, especially for cereal makers like General Mills and Kellogg.
Combined with cost cuts, he says that price increases averaging 2.9% can offset higher costs for the year for food companies. The food companies will be competing for a narrowing amount of consumer dollars. In addition to facing higher gasoline prices, shoppers are being confronted with higher prices for a bevy of household goods, from diapers and baby wipes, to paper towels and toilet paper. Clorox Co. said it would raise prices on Glad trash bags 9.5%. While shoppers feel reduced buying power, food- and household-product manufacturers hope that the fact prices are up across the board will lessen the impact. The companies also benefit by making products that are less discretionary than, say, clothes or electronics. "Almost everything [consumers] buy is costing them a bit more. It's not helping them feel more generous," Newell Rubbermaid Inc. Chief Executive Mark Ketchum said in an interview last week.
But, "these are products that people eventually need." Executives from Kimberly-Clark Corp., Procter & Gamble Co. and other companies also say that their price increases are less dramatic than those imposed during the last commodity spike in 2008. The economy is much improved since then, with the employment rate down and stock markets up, that may make the increases easier to swallow.

USDA Outsources Research As Seed Industry Seeks Faster Review (Source: CME)
The U.S. Department of Agriculture plans to start outsourcing research used in the review of new plant seeds to outside consultants and biotech companies seeking government approval. The pilot program comes as the seed industry complains the agency is taking too long to approve new products it says are needed at a time of surging crop prices and growing world food demand. Opponents of genetically modified crops, however, contend the USDA shouldn't be looking to streamline a process that already isn't doing enough to detect possible dangers. Under the two-year pilot, companies would agree to pay for a third-party contractor, chosen by the USDA's Animal and Plant Health Inspection Service, to conduct an environmental assessment of new products they want to commercialize. Companies also have the option of submitting their own research, which the USDA would use in developing its own assessment.
"This is very similar to what is done in a number of other agencies that have regulatory responsibility," said U.S. Agriculture Secretary Tom Vilsack in a recent interview. Biotech companies spend heavily on developing new seeds that can yield larger crops by making a plant resistant to a specific pest or tolerant of a certain herbicide. Before going to market, the USDA reviews a product to ensure it won't itself become a problem that potentially contaminates other fields or causes additional environmental problems. The U.S. Food and Drug Administration and U.S. Environmental Protection Agency also look at issues surrounding new seed proposals. The USDA pilot program could speed up the review of genetically modified crops.
It now takes seeds nearly seven times as long to win federal approval than it did when the first product was introduced in 1996, said Karen Batra, spokeswoman for the Biotechnology Industry Organization, a trade group that includes companies such as DuPont Co., Syngenta AG and Monsanto Co., as well as academic institutions. "Right now we've got 20-some products that are in the queue, waiting to be looked at," she said. "Some of these have been there for years." Yet opponents of genetically modified crops feel not enough work is being done to protect the public. The issue for the USDA should not be the time it takes to assess a proposed new crop, but the quality of that review, said Bill Freese, science-policy analyst for The Center For Food Safety, a nonprofit environmental group critical of genetically modified products.

Coffee Rises on Rain Threat to Colombia Crop; Sugar Gains; Cocoa Declines (Source: Bloomberg)
Arabica coffee rose to the highest price in almost 14 years as adverse weather threatened crops in Colombia, the world’s biggest producer after Brazil. Sugar gained, while cocoa declined. Colombia’s Agriculture Ministry on May 1 said a lack of sunshine will hurt coffee crops over the next few months. Plantations also have been damaged by rain and landslides and weather experts predict the worse is “yet to come,” Hamburg- based broker Eugen Atte GmbH said April 28 in a report. Prices have more than doubled in the past year. “With concern of excessive rains in Colombia and steady demand, coffee will continue to go even higher,” said Sterling Smith, an analyst at Country Hedging Inc. in St. Paul, Minnesota. “The scenario is very bullish.”

Oil Heads for Longest Losing Streak Since March as Crude Stockpiles Rise (Source: Bloomberg)
Oil declined for a third day in New York, matching the longest losing streak since March, as U.S. crude stockpiles increased and equities slipped, leading to concern demand for fuel will fall.

Oil fell to a two-week low as the Standard & Poor’s 500 Index dropped and on projections that a government report will show U.S. crude inventories climbed. (Source: Bloomberg)
Crude slipped 2.2 percent as the S&P 500 declined for a second day. U.S. oil supplies rose to a six-month high last week, according to a Bloomberg News survey before an Energy Department report tomorrow. Futures touched a 2 1/2-year high yesterday as investors assessed the impact of the May 1 killing of Osama bin Laden.

Silver Has Biggest Two-Day Drop Since 2008 on Margin Increase; Gold Falls (Source: Bloomberg)
Silver futures tumbled, capping the biggest two-day slide since October 2008, after margin requirements on the Comex increased for the second time in less than a week. Gold fell the most since mid-March. The minimum amount of cash that must be deposited when borrowing from brokers to trade silver futures will rise to $16,200 per contract at the close of business today from $14,513, CME Group Ltd., Comex’s owner, said yesterday. A year ago, the margin was $4,250. The metal, which tumbled 12 percent in two days, has doubled in the past 12 months.

US panel oks steep duties on Chinese aluminum goods
WASHINGTON, April 28 (Reuters) - A U.S. trade panel gave final approval on Thursday to duties ranging up to more than 400 percent on around $500 million of aluminum products from China used in the car and construction industry.
The move is the latest sign of trade friction between the world's two largest economies, but has been in the works for over a year.

Venezuela aluminum smelter in tough times-state daily
CARACAS, April 29 (Reuters) - Venezuela's government-run aluminum smelter Alcasa is in a "state of emergency" operationally and financially, an official newspaper said on Friday.
The South American country is an important global aluminum producer, but the industry has been plagued by labor disputes, outdated equipment and low investment over the last few years. Months of power rationing last year also hit the sector hard.

Zambia copper output at 2 mln t by 2015
LUSAKA, April 30 (Reuters) - Copper output in Zambia, Africa's top producer of the metal, will rise to 2 million tonnes by 2015 from around 900,000 tonnes this year as new mines open and others are expanded, the country's finance minister said on Saturday.
Situmbeko Musokotwane told Reuters new mines and expansion projects by Canada's First Quantum Minerals , Brazil's Vale , Equinox  , London-listed Vedanta  and Glencore International AG would boost copper production.

Shanghai bonded copper stocks seen falling on investors - trade
HONG KONG, April 28 (Reuters) - Investors are selling more Shanghai bonded copper stocks into the local market, which could dampen domestic prices in the near term, but also help re-open the spot import arbitrage window in the coming months, trading sources said on Thursday.
The world's top copper buyer, China has bought less from the international spot market this year since bonded stocks more than doubled from December, driving down quarterly imports by 21 percent.

Chile March copper output down 0.1 pct yr/yr
SANTIAGO, April 28 (Reuters) - Chile's copper output  fell 0.1 percent in March compared with a year earlier to 450,507 tonnes, the National Statistics Institute (INE) said on Thursday.
Chile, which holds by far the world's top copper reserves and is the globe's No.1 producer, is expected to steadily increase output in the next two years with new mine projects and upgrades

China needs to tackle growing steel supply glut - CISA
BEIJING, April 29 (Reuters) - Controlling excess capacity and output remains one of the big tasks facing China's sprawling steel sector this year, with demand growth expected to slow to 2.6-4.6 percent per year from 2011 to 2015, the China Iron & Steel Association (CISA) said on Friday.
Steel output growth reached 9.3 percent in 2010, but CISA's vice-secretary general, Zhang Changfu, told a news conference that China could no longer rely on rapid increases in demand and had to put a stop to rampant capacity expansion.

Indonesia's Timah reports tin sales in Q1 down 18 pct y/y
JAKARTA, April 29 (Reuters) - Tin sales at Indonesian producer Timah  fell 18 percent to 7,992 tonnes in the first quarter of 2011 compared the same period last year, the company said on Friday.  The firm posted net profit for the first quarter at 354.7 billion rupiah ($41.3 million), up from a 141.8 billion rupiah during the same period last year. 

METALS-Copper falls on China, U.S. data, dollar
LONDON, May 3 (Reuters) - Copper fell to its lowest since mid-March on Tuesday as manufacturing growth in big economies slowed and inventories of the metal rose, while key data was expected to give indications on the world's economic health.
Copper  for three-month delivery on the London Metal Exchange (LME) fell to a low of $9,194.75 a tonne compared with a close of $9,320 at the close on Thursday before a long weekend that ended on Monday. It was at $9,251 in official rings.

Gold steadies after bin Laden; silver stabilises
LONDON, May 3 (Reuters) - Gold slipped on Tuesday from  record highs above $1,570 an ounce the previous day, as the dollar rose and as safe-haven buying of the metal lost some momentum following the death of al Qaeda leader Osama bin Laden.
Spot silver  also came under selling pressure after hitting a near two-week low of $42.58 an ounce on Monday, when the precious industrial metal saw its biggest one-day drop in 29 months.

20110504 1017 Soy Oil & Palm Oil Related News.

 Soy Oil chart reading : side way range bound little downside biased.

Soybeans (Source: CME)
US soybean futures tumbled, dropping more than 2% on broad-based commodity selling. Market was caught up in commodity wide long liquidation, with investors reducing risk exposure, reflective of the fall in energy and metal futures, said Mike Zuzolo, president Global Commodity Analytics. Forecasts calling for soggy fields of the eastern Midwest and Delta to remain wet, added to defensive tone. The longer flooded fields keep farmers from seeding corn, it increases potential for farmers to switch some intended corn acres to soybeans, Zuzolo adds. CBOT July soybeans ended 29 1/4c or 2.1% lower at $13.63 3/4 a bushel.

Soybean Meal/Oil (Source: CME)
US soy product futures tumble in step with declines in soybeans. Soyoil futures led the declines in the products, garnering additional pressure from a slide in crude oil futures and weakness in world vegoil markets, analysts say. CBOT July soyoil futures end 0.89c or 1.5% lower at 57.71 cents per pound, and July soymeal settle $7.40 or 2% lower at $354.90 a short ton.

Palm almost flat as output ramp up erases earlier gains
KUALA LUMPUR, May 3 (Reuters) - Malaysian palm oil futures ended almost flat on Tuesday after a long weekend holiday as gains from a rebound in exports last month were erased by prospects of higher output.
 "There is some support from the export data but there has to be a significant flow of orders, strong external markets to make palm oil an explosive story," said a trader with a foreign commodities brokerage.

Ukraine soybean output seen up in 2011/12-attache
WASHINGTON, May 2 (Reuters) - Following are selected highlights from a report issued by a U.S. Department of Agriculture attache in Ukraine: "Soybean production is expected to increase in 2011/12 due to supportive market trends and an assumption of unrestricted exports. Domestic production of soy is being driven by growing domestic demand for animal feed. Soy imports are shrinking.
Soy feed products that contain genetically modified an herbicide resistant trait, are temporary allowed to be used for animal feed purposes in Ukraine. However, neither cultivation nor import of soybean seeds for planting is permitted.

Brazil soy crop raised to record 72.6 mln T-Celeres
SAO PAULO, May 2 (Reuters) - Brazil's 2010/11 soybean crop forecast was raised to a record 72.55 million tonnes, up from 70.56 million tonnes seen in early April, grains analysts Celeres said on Monday.
In its tenth report on the current crop, Celeres said average Brazil yields should reach 3.019 tonnes per hectare, up from 2.936 tonnes per hectare seen in April.