Tuesday, June 14, 2011

20110614 1813 FCPO EOD Daily Chart Study.

FCPO closed : 3253, changed : -7 points, volume : lower.
Bollinger band reading : pullback correction little downside biased.
MACD Histrogram : fall lower, seller in control.
Support : 3250, 3200, 3150, 3100 level.
Resistance : 3270, 3300, 3350, 3420 level.
Comment :
39 points range market FCPO market closed recorded small loss with dropping volume exchanged ahead of tomorrow export data while overnight soy oil closed slightly lower and currently trading little higher.
Daily chart formed a small down doji bar candle closed above lower Bollinger band level after market opened 2 ticks lower, trading range bound tested support and resistance level and closed near opening price.
Chart reading still suggesting a pullback correction 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.

20110614 1735 FKLI EOD Daily Chart Study.

FKLI closed : 1545 changed : +4 points, volume : higher.
Bollinger band reading : correction range bound little upside biased.
MACD Histrogram : falling, seller taking small exposure.
Support : 1540, 1530, 1515, 1500 level.
Resistance : 1550, 1565, 1580, 1590 level.
Comment :
FKLI closed recorded gain with rising volume participation doing 3.5 points discount compare to cash market that closed slightly higher and regional markets (Asia and Europe) trading mostly higher while overnight U.S. market closed edged up 1 point.
News wise, China reported better than forecast industrial output, inflation accelerated to 5.5 percent in May 2011 and China central bank announced increase of bank reserve ratio by 0.5 basis point seems. While bank home, Reuters reported that Malaysia Sugar IPO institutional subscription over subscribed by 70 times.  
Daily chart formed an up doji bar candle with longer lower shadow still closed below middle Bollinger band after market opened higher, fall lower tested below support level and recovered upwards tested near resistance level before eased to closed off the high of the day.
Chart wise, reading still suggesting a correction 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.

20110614 1634 Global Market & Commodities Related News.

Euro bounces off record low vs franc, oil, gold up
SINGAPORE, June 14 (Reuters) - The euro pulled up from near a record low against the Swiss franc on Tuesday after Chinese inflation figures provided some relief that the country would not get more aggressive on tightening policy, providing a broad boost to risky assets.
"The market got caught short. The whisper number for (China's) CPI was 6 pct ... so we're seeing a round of short covering on the back of that," said Sue Trinh, senior currency strategist at RBC in Hong Kong.

Oil rebounds on robust China industrial output
SINGAPORE, June 14 (Reuters) - - Oil rebounded on Tuesday after China said industrial production grew faster than expected in May, easing concerns over a global economic slowdown and soothing worries that Europe's debt crisis would dent energy demand.
"China is still ticking along nicely," said Ben Le Brun, an analyst at CMC Markets in Sydney.

U.S. corn falls for 2nd day, wheat mkt eyes Egypt tender
SINGAPORE, June 14 (Reuters) - Chicago corn futures lost more ground on Tuesday, falling 0.8 percent as improved U.S. weather and crop conditions weighed on the market, pulling it further below last week's record high prices.
"We may expect some pressure from the fact that plantings are winding up and the weather is improving, so it's going to be little bit bearish in the short term," said Adam Davis, a senior commodity analyst at Merricks Capital in Melbourne.

Argentina approves 3 mln T new crop wheat exports
BUENOS AIRES, June 13 (Reuters) - Argentina approved on Monday the export of 3 million tonnes of 2011/12 wheat for shipment starting in December, a senior agriculture official told Reuters.
Argentina, a leading global wheat exporter and a key supplier to neighboring Brazil, only authorizes exports of wheat and corn when farmers have declared enough stocks to guarantee plentiful domestic supplies.

Mexico, Costa Rica coffee output seen up in 11/12
MEXICO CITY, June 13 (Reuters) - Mexico and Costa Rica, two producers of high-quality arabica coffee, are expecting bigger harvests next season as the crop recovers from bad weather, national coffee groups in both countries said on Monday.
Mexico, the world's No. 6 coffee grower, will produce 4 million 60-kg bags in the current 2010/11 cycle, slightly below original forecasts after hard frosts hit some growing areas.

U.S. corn, soy ratings top analyst forecasts
CHICAGO, June 13 (Reuters) - Condition ratings for U.S. corn and soybeans topped analysts expectations on Monday as the late planted crop thrived amid the warm-up in temperatures across the Midwest.
The U.S. Agriculture Department's weekly crop progress report showed the corn crop rated 69 percent good to excellent as of June 12, up 2 percentage points from a week earlier. Analysts, on average, had expected good-to-excellent ratings of 68 percent.

Mexico coffee production seen rising in 2011/12-group
MEXICO CITY, June 13 (Reuters) - Mexico coffee production is likely to rise next season as the crop recovers from its current, lower-than-expected harvest hit by frosts and rains, the national coffee association said on Monday.
Mexico, the world's No. 6 coffee grower, will produce 4 million 60-kg bags in the current 2010/11 cycle, slightly below original forecasts due to bad weather.

Brazil CS sugar output picks up in late May-Unica
SAO PAULO, June 13 (Reuters) - Helped by dry weather, sugar output in Brazil's center-south finally picked up in the second half of May after a troubled wet start to the season, data from the cane industry association Unica showed on Monday.
Sugar production in the two-week period totaled 2.37 million tonnes, up 6.8 percent from a year ago, with cane crushing reaching 42.7 million tonnes, an increase of 5.5 percent from the same period in 2010.

Global coffee output seen slightly down in 2011/12
LONDON, June 13 (Reuters) - Global coffee output in 2011/12 is expected to fall slightly to around 130 million (60 kg) bags, down from 133 million in 2010/11, the International Coffee Organization forecast on Monday.
"Production prospects for crop year 2011/12 are somewhat mixed since lower production is anticipated in Brazil, while production in other exporting countries may increase," the ICO said in a monthly market report.

LME copper up on Chinese data, U.S. data eyed
SHANGHAI, June 14 (Reuters) - London copper rose on Tuesday, with Chinese economic data mixed but broadly supportive and a strong premium for prompt Chinese material signalling robust nearby demand.
"Tightening may be on the cards, but investors have been expecting an interest rate hike for several weeks now and much of that bearishness has been priced in," said Jinhui Futures deputy general manager Lin Yu Hui.

China May steel output hits record but daily rate falls
BEIJING, June 14 (Reuters) - China produced a record 60.25 million tonnes of crude steel in May, up 2 percent since April, figures from China's statistics bureau showed on Tuesday.  
But daily output declined to 1.94 million tonnes, down slightly from last month's peak of 1.968 million
tonnes, according to Reuters calculations.

Gold bounces after 1 pct fall; jewellers buy
SINGAPORE, June 14 (Reuters) - Gold rebounded on Tuesday after posting its biggest one-day loss in a month in the previous session on growing worries about another global economic downturn, but a weaker U.S. dollar and bargain hunting by jewellers offered support.
"I would say gold is still bullish. The main factors are still going back to the monetary policy of the U.S. and the longer-term weakness of the dollar. That could boost gold prices and help it head towards a new record.

20110614 1106 Global Commodities Related News.

GLOBAL MARKETS: Euro at record low vs Swiss franc; China data eyed
SINGAPORE, June 14 (Reuters) - The euro fell to a record low against the Swiss franc on Tuesday as investors sought safety on worries about a possible Greek debt default, while added concerns about the faltering U.S. economy and slowing Chinese growth kept prices across markets under pressure.
Asian stocks opened flat amid another bout of nerves about Greece's fiscal woes, which have dimmed risk appetite, and ahead of a slew of Chinese data.

OIL: Brent up but buffeted by supply, economic fears
NEW YORK, June 13 (Reuters) - Brent edged up while U.S. crude fell on Monday in volatile trading after a downgrade of Greece's credit rating fed jitters about economic growth and oil supply interruptions buffeted energy markets.
"Fundamentally, the market is still expressing concerns over weak U.S. macroeconomic guidance ...," Jim Ritterbusch, president at Ritterbusch & Associates in Galena Illinois, said in a note.

NATURAL GAS: Natgas ends down 2 pct on weather, nuclear returns
NEW YORK, June 13 (Reuters) - Front-month U.S. natural gas futures ended sharply lower on Monday, pressured by milder Northeast and Midwest weather this week and steadily improving nuclear generation despite the warmer outlook for next week.
"There's no heat in the Northeast this week, which is a problem for the bulls, but prices may have a hard time coming off with the (Gulf) physical market still strong," a Houston trader said, noting Henry Hub cash prices gained several cents on Monday and were still trading at a premium to futures.

EURO COAL: Steady as demand slows
LONDON, June 13 (Reuters) - Coal prices were little changed on Monday despite a surge in Brent crude to a record premium over U.S. crude.
"The Chinese seem to have stopped buying now because they have some stockpiles, there are delays to discharging vessels at certain southern ports and they're waiting to see exactly what measures the government takes to tackle the power shortages," one Pacific coal producer said.

COMMODITIES: Drop on Greek debt woes, worries over economy
CHICAGO, June 13 (Reuters) - Grains and oil led commodities lower on Monday amid worries that the economic recovery was losing steam, with a deepening euro zone debt crisis and signs of slowing Chinese demand overshadowing a weak dollar.
"We're still in this phase where people are starting to worry about the economic recovery," Standard Chartered analyst Daniel Smith said. "The dollar has generally been strong and this is in line with risk aversion which is creeping in."

20110614 1008 Global Economic Related News.

US: Lawmakers say agreement on cutting debt would boost flagging economy
Congress could help improve the US economic recovery by reaching a debt-reduction deal as they face a 2 Aug deadline that risks sending the government into default. Lawmakers are haggling over spending cuts and budget reforms as they seek a deal to raise the USD14.3tn debt limit. Leaders of two separate bipartisan efforts last week said they are stepping up efforts to reach a debt-reduction deal before the 2 Aug deadline to expand the debt ceiling or risk a government default. A series of disappointing economic reports has added to the pressure for lawmakers to come to an accord. (Bloomberg)

Japan: Machinery orders in April drop in sign companies pare spending after the March 11 earthquake and tsunami. Factory orders declined 3.3% MoM in April from March, when they rose 1% MoM, the Cabinet Office said. Orders are used as an indicator of capital spending in three to six months. (Source: Bloomberg)

China: Lending unexpectedly tumbles, adding to evidence economy is slowing
China’s lending tumbled in May and money supply grew at the slowest pace since 2008, adding to signs that the world’s second-biggest economy is cooling. Loans were RMB551.6bn (USDD85bn), less than the RMB650bn median estimate in a Bloomberg News survey of 20 economists and RMB639bn a year earlier. M2, the broadest measure of money supply, rose 15.1%, the People’s Bank of China said on its website. (Bloomberg)

EU: ECB, Germany may be forced to compromise
The confrontation between the European Central Bank and Germany over bailing out Greece risks causing so much damage that officials may be forced to compromise. ECB President Jean-Claude Trichet and German Finance Minister Wolfgang Schaeuble are at odds over investors’ role in the second Greek rescue in 14 months. The dispute turns on how politicians make good on a promise to push creditors to pay some of the cost, a step that Trichet said on 9 June could be an “enormous mistake.” Unless a deal can be struck to guarantee Greece’s financing needs for the next 12 months, the International Monetary Fund has threatened to withhold its share of what remains of Greece’s original EUR110bn (USD159bn) bailout. (Bloomberg)

EU: Greece receives lowest credit rating by S&P
Greece was branded with the world’s lowest credit rating by Standard & Poor’s, which said the nation is “increasingly likely” to face a debt restructuring and the first sovereign default in the euro area’s history. Greece’s government, which plans to sell EUR1.25bn (USD1.8bn) of 26-week Treasury bills today, said that the downgrade overlooked “intense” talks between European officials to address the nation’s financing needs. Credit- default swaps on Greece, Ireland and Portugal surged to records yesterday on concern governments’ struggles to resolve the turmoil will threaten their ability to pay their debts. (Bloomberg)

20110614 1007 Malaysia Corporate Related News.

KLCI chart reading :
correction range bound upside biased with MACD -ve cross down.

Nine new initiatives worth RM2.8bn marks ETP midpoint
Nine new initiatives under the ETP programme with investments totaling RM2.82bn were unveiled. With the new announcements, the ETP has reached a new milestone with 50%, or 65 of its 131 Entry Point Projects, taking off, represented by 87 initiatives. UCSI will invest RM850m to develop a 160-acre integrated premium health education cluster in Port Dickson while SEGi will make its investment in an early childhood care education hub in Greater KL, which is expected to be fully operational by 2015. Sime Darby will also invest in two specialist hospitals in Ara Damansara and Park City, with investments of RM240m and RM40m respectively. (Malaysian Reserve)

Bumi Armada IPO to raise RM9bn
Oil and gas outfit Bumi Armada, controlled by T Ananda Krishnan, is set for a return with an IPO to raise up to RM9bn, far exceeding the RM3bn speculated figure, a source close to the matter said. According to the draft prospectus, RM775m from the IPO will be used to repay bank borrowings while the rest is reserved for working capital and capital expenditure. (Financial Daily)

Malakoff wins new power concession
Malakoff has won a bid to construct and operate a 1,000MW coal-fired power plant in a development, which is seen as providing the utilities firm a boost for its prospective listing on Bursa Malaysia. Malakoff will build the coal-fired power plant adjoining the existing Tanjung Bin power plant in Johor. The power plant’s expected commercial operation date is 1 Mar 2016. (Financial Daily)

Maybank to submit RHBCap takeover proposal by end-June
Maybank will submit its merger proposal to the RHBCap board by the end of June, according to its chairman Tan Sri Megat Zaharuddin Megat Mohd Nor. He was, however, tight-lipped when pressed about the potential valuation of the offer for the RHBCap stake, but reiterated that it should be value-accretive. (Financial Daily)

RHBCap: ADCB in need of cash. Abu Dhabi Commercial Bank's (ADCB) plans to hive off its 25% stake in RHBCap to Aabar Investments could be due to need of cash to settle some of its debts that will be due soon. (Source: The Star)

Alam Maritim: Wins RM52m job. Alam Maritim Resources Bhd (AMRB) has been awarded a contract valued at RM52m from Samsung Engineering Malaysia Sdn Bhd to supply engineering work, supply of materials, fabrication, load-out and commissioning of two units of single point mooring buoy for Sabah Oil and Gas Terminal project. (Source: Bursa Malaysia)

KFC: RM23m for 25 new outlets in the country. KFC Holdings (Malaysia) Bhd will spend around RM23m to open 25 new outlets in Malaysia by year-end. Around 10 outlets will be in the form of "drive-thru", and the balance will be normal outlets. (Source: Business Times)

Sime: To invest RM280m in two new hospitals. Sime Darby Bhd's healthcare unit will invest RM280m in two new hospitals in the Klang Valley under the government's Economic Transformation Programme (ETP). The segment is expected to contribute about 20% of the company's revenue in next three to five years. (Source: Business Times)

Feed-in tariff for renewable energy to start on 1 Sept
The feed-in-tariff (FiT) for the development of renewable energy (RE) will kickstart on 1 Sept, according to Energy, Green Technology and Water Ministry secretary-general Datuk Loo Took Gee. Under the initial plan announced in April, electricity tariffs will be hiked by 1% to be fed into a RE fund to cover costs associated with the FiT scheme. However, Loo explained that there would be no more tariff adjustment to cover the FiT scheme but it would be taken from the recent tariff hike to be fed into the RE fund. (StarBiz)

20110614 1003 Global Market Related News.

 DJIA chart reading : downside biased with possible pullback correction.
 Hang Seng chart reading : pullback correction downside biased.

Asian Stocks Swing Between Gains, Losses on Oil, Greek Rating Downgrade (Source: Bloomberg)
Asian stocks swung between gains and losses as Standard & Poor’s cut Greece’s credit rating to the lowest debt grade, feeding doubts over a global economic recovery. Japanese power companies advanced.

U.S. Stocks Rise as Merger Announcements Help Offset Worries About Economy (Source: Bloomberg)
U.S. stocks rose, rebounding from six weeks of losses, as a pickup in takeovers and the cheapest valuations in almost a year helped offset concerns about a slowdown in the economic recovery. Transatlantic Holdings Inc. (TRH), the reinsurer formerly owned by American International Group Inc., surged 9.5 percent after agreeing to merge with Switzerland’s Allied World Assurance Company Holdings AG. Timberland Co. (TBL) rallied 44 percent as VF Corp. (VFC) said it will buy the footwear maker for $1.8 billion. Halliburton Co. and Freeport-McMoRan Copper & Gold Inc. slumped at least 1.2 percent amid falling commodity prices.

Fed prepares for last spurt of easy money flood
NEW YORK, June 10 (Reuters) - The flood of Federal Reserve money that has supported Wall Street and the rest of the U.S. economy for 2-1/2 years will shrink to a trickle with the conclusion of the Fed's bond purchases announced on Friday.
The Fed said it will buy $50 billion of Treasuries, the final series of government bond purchases that marks the last phase of the $600 billion program it launched in November 2010 to prevent another recession.

US auto dealer group sees rebounding summer sales
WASHINGTON, June 10 (Reuters) - New U.S. car and truck sales are expected to lag again in June, but things should pick up in the second half of the year, the largest auto dealers group said on Friday.
Paul Taylor, chief economist of the National Automobile Dealers Association (NADA), said the group anticipates inventory shortages that slowed May sales to affect this month's results. But a turnaround should occur after that, helped by an improving credit outlook and lower gasoline prices.

Profits Seen Increasing Jobs as Earnings in U.S. Grow Fastest Since 1940s (Source: Bloomberg)
Profits at American companies are poised to be one of the few bright spots in the U.S., helping to steady the faltering recovery. Earnings will climb an average 10 percent a year through 2013, more than three times quicker than the economy, after what has already been the fastest rebound since the late 1940s, JPMorgan Chase & Co. projects. In mounting signs of confidence, Macy’s Inc. (M) has raised its annual profit forecast, Intel Corp. (INTC) and Target Corp. (TGT) increased dividends and DuPont Co. plans to invest more than $500 million to boost production.
Surging overseas sales, improving U.S. demand and the Federal Reserve’s pledge to keep interest rates close to zero for an extended period bode well for earnings, said Robert Mellman, an economist at JPMorgan who has tracked corporate profits since 1985 and published a special report May 20 on the subject. Widening margins will give businesses the means and incentive to invest and hire, paving the way for accelerating growth in the world’s largest economy, he predicted. “Corporate profits have plenty of room to run,” as “returns on investing and expanding are high,” Mellman said in a June 10 interview from New York. “This makes companies want to grow the business. As profitability remains strong, they’ll increase hiring.”

China Lending Unexpectedly Tumbles, Adding to Evidence Economy Is Slowing (Source: Bloomberg)
China’s lending tumbled in May and money supply grew at the slowest pace since 2008, adding to signs that the world’s second-biggest economy is cooling. Loans were 551.6 billion yuan ($85 billion), less than the 650 billion yuan median estimate in a Bloomberg News survey of 20 economists and 639 billion yuan a year earlier. M2, the broadest measure of money supply, rose 15.1 percent, the People’s Bank of China said on its website.

Japan reconstruction panel eyes boom in autumn
TOKYO, June 11 (Reuters) - Spending to rebuild Japan's tsunami-hit northeast will spark an economic boom later this year, generating revenues that can be used to redeem reconstruction bonds and reduce the need to rely on long-term debt, the head of a government advisory panel said.
Makoto Iokibe, chairman of the Reconstruction Design Council, also called for a mass consolidation of ports along the coast to boost the fishing industry and aggressive investment to make the region a pioneer in renewable energy development.

Greece Receives Lowest Credit Rating by S&P (Source: Bloomberg)
Greece was branded with the world’s lowest credit rating by Standard & Poor’s, which said the nation is “increasingly likely” to face a debt restructuring and the first sovereign default in the euro area’s history.

Greece Receives Lowest Credit Rating by S&P (Source: Bloomberg)
Greece was branded with the world’s lowest credit rating by Standard & Poor’s, which said the nation is “increasingly likely” to face a debt restructuring and the first sovereign default in the euro area’s history. The move to CCC from B reflects “our view that there is a significantly higher likelihood of one or more defaults,” S&P said in a statement yesterday. “Risks for the implementation of Greece’s EU/IMF borrowing program are rising, given Greece’s increased financing needs and ongoing internal political disagreements surrounding the policy conditions required.”

Trichet’s ‘Cold War’ With Germany Risks Damage That May Force Compromise (Source: Bloomberg)
The confrontation between the European Central Bank and Germany over bailing out Greece risks causing so much damage that officials may be forced to compromise. “The balance of forces in the euro zone is a little like it was in the Cold War: both sides are brandishing deterrents that would be too horrendous to use,” said Philip Whyte, a senior research fellow at the Centre for European Reform in London. “It’s all going to turn on whether you can fiddle with debt maturities without calling it a credit event.”

Euro bounce to fade on Greek worries; stocks slip
HONG KONG, June 13 (Reuters) - The euro strengthened , though its gains appeared short-lived as major European powers continue to haggle over a fresh rescue package for Greece, while Asian stocks extended a seven-week losing streak on fears the global recovery is losing steam.
Concerns over a sputtering U.S. economic recovery, slowing growth in China and India and festering problems in the euro zone pushed the MSCI index of Asia Pacific shares outside Japan down by nearly 1 percent to a 2-1/2 month low before regaining some ground to be 0.6 percent lower.

Euro Falls Versus Yen, Dollar on Concern Greece’s Debt Crisis Will Worsen (Source: Bloomberg)
The euro fell against the yen and the dollar on concern European Union finance ministers meeting today will struggle to resolve Greece’s debt crisis.

FOREX-Euro at record low vs Swiss franc on Greek jitters
LONDON, June 13 (Reuters) - The euro hit a lifetime low against the safe-haven Swiss franc and slipped versus the dollar, as investors worried at policymakers' struggles over the Greek debt crisis cut their exposure to the common currency.
Volumes were on the lower side with many centres in Europe closed for a holiday. The cost of insuring peripheral euro zone bonds against default hit a record high, while a general lack of appetite towards riskier assets also pushed the euro lower.

20110614 0956 Global Commodities Related News.

Corn (Source: CME)
US corn futures finish lower on expectations that mild temperatures and wet weather will boost crop conditions. That's a turnaround from excessive rains that delayed plantings earlier this spring and caused some farmers to plant fewer acres than they intended. "Any corn that did manage to get planted in the Midwest should do well," says Joel Burgio, meteorologist for Telvent DTN. The losses follow a surge to record highs Friday. CBOT July corn slips 4 1/2c to $7.82 1/2 a bushel.

Wheat (Source: CME)
US wheat futures tumble as weather improves in Europe, a major exporter of the grain. Rains this week "should further improve moisture and crop conditions" in France and Germany after recent rains helped ease dryness, according to MDA EarthSat Weather. Prices had advanced recently on concerns about a drought in Western Europe. Yet, "weather has been and looks beneficial across most of the world's crop growing regions," says John Roach, president of Roach Ag Marketing. CBOT July wheat drops 16 1/4c to $7.43, KCBT July loses 17c to $8.51 and MGE July slides 14 3/4c to $9.85 1/4.

Rice (Source: CME)
Rice futures fall hard on profit-taking with the neighboring wheat and corn markets. Traders took money off the table in the grains after recent advances. Wheat's slide of more than 2% added spillover pressure to rice as both grains are global food staples. July rice finishes down 28 1/2c, or 1.9%, at $14.61 per hundredweight.

Price Increases To Affect Nestle Emerging Market Sales - Exec (Source: CME)
Natural and man-made disasters as well as spiralling raw material costs will hit emerging markets sales at Swiss food company Nestle SA, Executive Vice President Frits van Dijk said, as the company struggles to pass the higher costs on to consumers. Nestle's Asia Oceania Africa Zone was the fastest growing of Nestle's three global regions in the first three months of 2011, but rapid rises in commodity costs mean growth is likely to slow as many consumers in the region are on lower incomes and more sensitive to price increases, van Dijk told Dow Jones Newswires in an interview in Jakarta. The AOA region, which accounts for around two thirds of Nestle's emerging market exposure, saw sales growth of 11.8% to CHF3.8 billion ($4.54 billion) in the first three months of the year, ahead of the Americas, where sales were up 3.7% and Europe which saw sales growth of 2.3%. But Nestle is now faced with the challenge of maintaining its target of organic growth of 5% to 6% while continuously improving the bottom line.
Rapid rises in commodity costs "is obviously affecting us," said van Dijk, and Nestle brought in some price increases in the first three months of 2011,but he said the company is looking at ways other than price increases to meet its targets and protect margins. "We have to find ways and means of how to cope with this [raw materials rises]. Price increases is one solution, but clearly not the only solution," he said. "We have seen it in the past when you increase prices for a few months, you get a bit of headwind and the consumers have to adapt," said van Dijk. "But on the other hand, it is the whole industry that is suffering. Everyone ultimately will have to go through price increases. The whole price level goes up a bit, but the consumers get used to that after a while."
Nestle is also looking to improve efficiencies, reduce waste and packaging, and is reengineering its products to use cheaper ingredients, such as replacing much of the skimmed milk powder content of its Milo malt drink in Vietnam with less expensive soya protein. "This allowed us to maintain the very competitive price point of 1,500 Vietnamese Dong (7.3 U.S cents), which is a very strategic price for food and beverage in Vietnam," van Dijk said. "By keeping a price point we are able to grow the business at a lower cost." In 2011 the AOA region also faced a series of disturbances, from the Arab Spring uprisings in North Africa to the civil war in Ivory Coast and the Japanese tsunami and nuclear disaster. Nestle had to shut its factories in Ivory Coast when the fighting became heavy, while many countries refused to accept coffee and creaming products made in Japan due to fears over nuclear contamination.
Nestle had a series of business contingency plans which it put into effect to supply markets from other sources. Van Dijk declined to put a figure on the sales that were lost. "You lose a few days of sales, but nothing too much. But our competitors are in the same boat, so you don't lose market share. You have to fill up the pipeline after." In Japan, production was resumed at the damaged factory two and half weeks after the disaster. "We have stepped up our disaster planning," said Van Dijk, adding that the company's readiness to deal with disasters is "of a very high level."

French Agriculture Min: Drought Situation In France Is "Very Severe" (Source: CME)
France has been experiencing a "very severe" drought since the start of the year and possibly "the worst" of all Europe, French Agriculture Minister Bruno Le Maire said. Speaking in an interview with RTL radio and LCI television, Le Maire insisted that French farmers would get all the possible help, including the use of the country's armed forces and the state-owned railway company to carry fodder where needed as some farmers have been experiencing difficulties to feed animals due to the drought. "My objective is that not a single one farmer gives up during this drought crisis," Le Maire said, insisting that the future of "thousands" of farms was at stake. As for the German E. coli crisis, Le Maire noted that it was far from over as consumption of vegetables such as cucumbers and tomatoes was resuming too slowly.

Sustainable Farming Needed to Feed the World (Source: CME)
The Green Revolution of the 1960s saved an estimated 1 billion people from poverty and produced enough food to support a doubling of the world population to six billion by the year 2000. Thanks to high-yielding crops, irrigation and the widespread use of agrochemicals, farmers in the developing world boosted output from 800 million tons to more than 2.2 billion tons in that time. But now, as global yield growth is declining while the world's population looks set to top nine billion in the next 40 years, United Nations experts are calling for a new, even greener revolution. A new initiative from the Food and Agriculture Organization argues that decades of intensive farming has ravaged the world's natural resources, causing land degradation, sapping water supplies and contributing massively to climate change. "The present paradigm of intensive crop production cannot meet the challenges of the new millennium," said the FAO in its report, called Save and Grow.
Adding to the challenge is that fact that the amount of land available for cultivation is limited while demand, driven by a growing taste for meat and diversion of crops for biofuels, is growing exponentially. The FAO estimates that by 2020, industrialized countries may use 150 kilograms of corn per head per year in the form of ethanol, a similar increase to the rate of cereal food consumption in developing countries. Instead, the report calls for a new approach that will cut agriculture's contribution to climate change--it currently emits around a third of the world's greenhouse gasses--by empowering the world's 2.5 billion smallholder farmers through more sustainable methods of cultivation. An estimated $209 billion a year will need to be ploughed into agriculture, including improving access to high-yield and genetically modified seed varieties, improving the use of natural fertilizers and reducing dependence on pesticides and using water more efficiently, the FAO estimates.
"In order to grow, agriculture must learn to save," said FAO director-general Jacques Diouf. The report comes as agriculture ministers from the Group of 20 industrialized nations are due to meet next week to agree ways to combat food insecurity. Proposals include creating a coordinated forecasting system for crops, improving transparency in commodities markets and world stock levels. "Whatever the investment and however much is made it should be channeled towards new products and intensification of production on existing land," said Dr. Amit Roy, president and chief executive of the International Fertilizer Development Council. He argues that farmers in the developing world must have better access not just more but better technology if they are to boost yields without bringing more land under the plough. "They're using old technology in a world that's changed," he said. The Green Revolution of half a century ago helped farmers to exploit natural resources to create more from less.
This new revolution must teach us how to save what we have to preserve more for the future.

Europe's Drought Risks Inflation Deluge (Source: CME)
It will take more than a washed-out holiday weekend to put a smile back on the faces of European farmers - and policymakers. Dry weather in the continent's northern regions has seriously harmed potential crops, with the U.K. the latest country to declare drought conditions in some parts of the country -- England and Wales have experienced the second driest spring since 1910, with rainfall 45% below the long-term average. The feed-through to overall inflation levels is getting harder to ignore. Wheat, which accounts for nearly half of Europe's cereal production, is particularly at risk. Already, the price of milling wheat traded in Paris has risen 6.6% this year. France, Europe's largest wheat producer, is suffering its driest weather in 50 years, and could see its crop decline by 12% this year, the US Department of Agriculture estimates. Much of the price rise will be felt domestically, with Europe consuming around 85% of its annual wheat production.
Rapeseed, another important crop used in both biofuels and edible oils, has meanwhile seen its price rise by 46% since a year ago. Unless imports form Ukraine increase, its current near-term futures price of EUR466.5 per ton could rise to EUR500 per ton, Rabobank forecasts. Such price rises are feeding through to overall European inflation: euro zone food prices rose by 1.8% on-year in April, according to Eurostat, up from 0.1% in April 2010. Sure, the weighting of food in the euro zone consumer price index, at 14%, is low compared with emerging market CPI baskets. But its weight as a source of inflationary pressure is rising. In 2010, food contributed just 4% of overall euro zone inflation. In 2011, that could rise to 14%, according to Barclays Capital, heading higher to 17% in 2012. Since food demand doesn't fall much even as prices rise, higher food expenses will hit already stretched household budgets, especially for poorer families.
The effect of higher basic food prices is already pushing up the cost of processed food. The year-on-year inflation rate for bread and cereals has risen sevenfold in the last six months, to 2.1%, for example. But the full effect still may not have been seen: Bread prices typically lag wheat futures by around six months, BarCap estimates. Europe's sun seekers may be enjoying the warm conditions. But for central bankers trying control the continent's inflation, it is another headache.

Wheat up 1 pct, corn rises on supply squeeze, weather
SINGAPORE, June 13 (Reuters) - U.S. wheat futures rose 1.2 percent , while corn firmed to trade near last week's all-time highs as concerns over tightening grain supplies and harsh crop weather continued to buoy
the grain markets.
"Corn prices are too high and livestock producers are switching from corn to feed wheat. It is a supportive factor for wheat prices," said Ker Chung Yang, a commodities analyst at Phillip Futures in Singapore.

New downpours to hit flooded central and southern China
BEIJING, June 13 (Reuters) - More torrential rains are likely to hit central and southern China where nearly 100 people have been killed in floods and landslides over the last 10 days, the government said on Monday, as drought rapidly gives way to inundation.
Downpours are forecast for the middle and lower reaches of the Yangtze River, including Guizhou, Jiangxi, Hubei and Hunan provinces, the China Meteorological Administration said.

Farmers must boost sustainable crops to feed world-FAO
MILAN, June 13 (Reuters) - The ravages from half a century of intensive farming must give way to a more sustainable approach if farmers are to feed the world in 2050, the United Nations' Food and Agriculture Organisation (FAO) said on Monday.
Global farm output must increase 70 percent, including a nearly 100 percent jump in developing countries, to feed the world in 2050, the FAO said.

Vietnam to stockpile 1 mln T rice from July
HANOI, June 13 (Reuters) - Vietnamese exporters will stockpile 1 million tonnes of milled summer-autumn rice for three months beginning July 15, a typical move to support domestic prices as the harvest in the Mekong Delta food basket peaks.
This time the stockpiles, equivalent to a quarter of the current crop output, would be built without government support in the form of low-interest loans or a guanranteed place in government export deals. 

Government declares drought in parts of east England
LONDON, June 10 (Reuters) - The British government declared a state of drought on Friday in parts of East Anglia, an important farming region in eastern England, after some areas of the country had their driest spring on record.
Declaring a region to be in a state of drought allows water companies to place curbs on the use of water.

Spain grain farmers eye good crop, tight supply
MADRID, June 10 (Reuters) - Spanish grain farmers expect to reap the benefits of producing their best harvest for three years this summer just as global supplies are tightening and driving prices higher.
Asaja recalled in a statement that the International Grains Council forecasts for global supply of 1.803 billion tonnes in the 2011/12 market year would fall slightly short of 1.812 billion in consumption.

Romania sees 6.7 mln T wheat, weather damage marginal
BUCHAREST, June 10 (Reuters) - Romania expects to reap a wheat crop of about 6.7 million tonnes this year, 18 percent higher than in the previous season, the agriculture ministry said on Friday.
The wheat crop in Romania, one of the largest cereal producers in the Black Sea region, was 5.7 million tonnes in 2010 while maize output grew to a five-year high of 9 million -- the European Union's second biggest.

Coffee dips, weighed by Brazil harvest; cocoa rises
LONDON, June 13 (Reuters) - ICE arabica coffee futures edged lower early weighed by Brazil's harvest, while cocoa firmed, with upside limited by a steady flow of supplies from top producer Ivory Coast.
Liffe white sugar futures firmed to around three-month highs and ICE raw sugar hovered around seven-week peaks, underpinned by tight supplies during a period of high demand before Ramadan in August, and port loading delays in Brazil and Thailand. Arabica coffee futures on ICE edged lower, weighed by Brazil's harvest, and remained underpinned by a shortage of high quality beans and the looming frost season in Brazil.

I.Coast cocoa arrivals hit 1,153,712 T by June 5 -BCC
ABIDJAN, June 10 (Reuters) - Cocoa arrivals to ports in top grower Ivory Coast hit 1,153,712 tonnes by June 5 since the start of the season in October, up from 1,009,646 tonnes in the same period a year ago,
according to official data.
Some 11,174 tonnes of beans reached the ports of Abidjan and San Pedro in the most recent week, according to the figures from industry regulator BCC obtained by Reuters on Friday, compared with 23,289 tonnes in the same week of the 2009-10 season.

Crude Oil Declines for a Third Day in New York on Signals Demand Weakening (Source: Bloomberg)
Oil declined for a third day in New York as signs that the global economy is slowing stoked speculation that fuel demand may falter. Futures slipped as much as 0.5 percent today before reports that may show sales by U.S. retailers fell in May for the first time in 11 months and China’s industrial production slowed. Prices dropped to a four-week low yesterday after government data showed China’s oil-product consumption slid 4 percent in May and Standard & Poor’s cut Greece’s credit rating to the lowest held by a country.

Copper in London Trades Little Changed Ahead of Chinese Output, Price Data (Source: Bloomberg)
Copper in London, trading little changed before China’s industrial production and inflation reports, may drop for a third day on speculation demand will weaken as global economic growth falters. The metal for three-month delivery on the London Metal Exchange traded at $8,910 a metric ton by 8:04 a.m. Singapore time. It fell as much as 0.8 percent to a three-week low of $8,864.75 a ton yesterday.

Goldman Sachs keeps 12-Month LME Copper price outlook
Jun 10 (Reuters) - Goldman Sachs reiterated its 12-month LME Copper price forecast of $11,000/mt saying an observed large deficit in China in the month of May will add to the substantial deficit in the global copper market this year.
The investment bank said it expects China's pull on copper imports to rise in the third quarter of 2011 as exchange and bonded warehouse inventories draw down to lower levels.

EU stainless steelmakers' profits to fall in Q2
LONDON, June 13 (Reuters) - European stainless steel producers' profits look set to shrink in the normally strong second quarter as prices for their products fall and customers opt to work off stocks rather than make fresh purchases.
On top of that, expectations of further weakness in prices for nickel -- a key ingredient in many stainless steel grades -- will keep stainless buyers hesitant in the next few months.

China lead pollution outbreak poisons 103 children
BEIJING, June 12 (Reuters) - Lead pollution from workshops in eastern China seriously poisoned 103 children and has affected hundreds of other residents in the country's latest case of unfettered industrial toxins, the official Xinhua news agency reported on Sunday.
The pollution from tinfoil-making workshops in Yangxunqiao town in Zhejiang province left the children, aged 14 or younger, with 250 microgrammes or more of lead for every litre of blood.

METALS-Copper slips on signs of China cooling, holidays
LONDON, June 13 (Reuters) - Copper dropped half a percent to a three-week low on Monday, dragged down by signs of cooling in top consumer China amid holiday-thinned trade, but prospects for a demand pick-up in the second half kept sellers at bay.
Three-month copper on the LME traded at $8,876 at 0958 GMT, compared with a close of $8,938 a tonne on Friday.

PRECIOUS-Gold falls on dollar, safe-haven status supports
LONDON, June 13 (Reuters) - Gold fell on Monday as the euro eased against the dollar, but concerns about the euro zone debt crisis sustained investor interest in the precious metal as a safe store of value.
Bullion fell almost 1 percent on Friday, its biggest one-day decline in a month, due to a rally in the dollar and broad commodities losses.

Gold Falls to Three-Week Low on Sales to Cover Losses in Slumping Equities (Source: Bloomberg)
Gold dropped to a three-week low on sales by some investors to cover losses in equity markets. The MSCI All-Country World Index of stocks touched the lowest in more than two months. The Standard & Poor’s 500 Index has fallen for six straight weeks. Gold reached a record $1,577.40 an ounce on May 2. “Gold may tumble if margin-call problems should arise in equities here and abroad,” said Dennis Gartman, an economist and the editor of the Suffolk, Virginia-based Gartman Letter. On the Comex in New York, gold futures for August delivery fell $13.60, or 0.9 percent, to settle at $1,515.60 at 1:53 p.m. Earlier, the price touched $1,511.40, the lowest for a most- active contract since May 23.

Japan May aluminium stocks rise 2.9 pct m/m
TOKYO, June 13 (Reuters) - Aluminium stocks held at three major Japanese ports at the end of May rose to a seven-month high, reflecting inflows from delayed deliveries and also a rise in imports, an official at trading house Marubeni Corp  said on Monday.
Aluminium stocks at the ports came to 225,400 tonnes at the end of May, up 6,300 tonnes or 2.9 percent from a month earlier, said Marubeni, which collects data from the key ports of Yokohama, Nagoya and Osaka.

Boeing eyes aluminum hedging amid market volatility
NEW YORK, June 10 (Reuters) - Boeing Co  may decide within the next year to begin hedging aluminum prices on the London Metals Exchange (LME) in order to reduce volatility in its costs, a senior executive said on Friday.
If initiated, the company intends to use the new hedging program on its long-term agreements, John Byrne, an executive with the company's commercial airplanes unit, told Reuters.

20110614 0954 Soy Oil & Palm Oil Related News.

Soy Oil chart reading : side way range bound.

Soybeans (Source: CME)
US soybean futures end lower, succumbing to broader-based selling pressure as investors reduced risk exposure across commodity asset classes. Guidance of lower crude oil and metal futures attracted selling across grain and soybean futures. Absence of fresh fundamental developments to direct prices initially promoted a choppy theme, but slower export demand and less threatening supply outlooks applied pressure to attract selling as prices consolidate below the top end of a four-month trading range, analysts said. CBOT July soy end down 0.3% at $13.82 3/4/bushel.

Soybean Meal/Oil (Source: CME)
Soy product futures end lower, with traders booking profits on recent gains in soymeal amid a lack of fresh supportive news to inspire fresh buying, analysts said. Soyoil ended slightly lower, with profit taking on long soymeal/short soyoil spreads offsetting some the pressure from crude oil declines on soyoil futures, analyst add. CBOT July soymeal ends down 0.9% at $370.10 per short ton, and July soyoil settles down 0.05% at 56.82 cents/pound.

High stocks, output drag palm to 1-mth lows
KUALA LUMPUR, June 13 (Reuters) - Malaysian palm oil futures hit over one-month lows , extending losses from the previous session, as expectations of stronger output and higher stocks continue to weigh.
"Fundamentally, high stocks and improving production triggered a sell-off among the people who went for a long position," said a trader in Kuala Lumpur.