Wednesday, December 28, 2011

20111228 1822 FCPO EOD Daily Chart Study.

FCPO closed : 3185, changed : +26 points, volume : higher.
Bollinger band reading : upside biased with possible pullback.
MACD Histrogram : rising, buyer in control.
Support : 3150, 3100, 3070, 3050 level.
Resistance : 3200, 3250, 3270, 3300 level.
Comment :
FCPO closed recorded gains with increased volume transacted. Overnight soy oil closed recorded gains and currently consolidating little lower while crude oil price pulling back lower.
Hot and dryer South America weather on soy bean planting area plus floods in Johor state contributed to the upward movement on FCPO despite yesterday declined export data.
Daily chart formed a small down doji bar candle closed near upper Bollinger band level after market opened higher and traded side way within 24 points range bound market to closed near the low of the day.
Chart reading suggesting an upside biased market development with possible pullback correction 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.

20111228 1745 FKLI EOD Daily Chart Study.

FKLI closed : 1504.5, changed : +0.5 point, volume : higher.
Bollinger band reading : little upside biased.
MACD Histrogram : rising, buyer taking exposure.
Support : 1500, 1494, 1485, 1470 level.
Resistance : 1505, 1515, 1530, 1540 level.
Comment :
FKLI closed 1 tick higher with improved volume participation nearly on par with cash market that closed higher. Overnight U.S. market closed mixed and today Asia markets ended mostly lower while European markets currently having mixed development.
Global markets traded mostly little changed awaits Italy bond auction, lower U.S. housing price and falling Japanese factory production.
Daily chart formed an up doji bar candle with longer lower shadow closed near upper Bollinger band level after market opened and traded lower followed by upward recovery into positive zone before soften little lower to closed near the high of the day.
Technical study suggesting a little upside biased market development testing previous high near 1513 level.
When to buy : buy at support or weakness with quick cut loss and profit target.
When to sell : sell at resistance or strength with quick cut loss and profit target.

20111228 1701 Regional Markets EOD Daily Chart Study.

 DJIA chart reading :  little upside biased.
Hang Seng chart reading : side way range bound.
KLCI chart reading : little upside biased with possible pullback.

20111228 1602 Global Market & Commodities Related News.

Shares slip in thin trade, oil stays firm on Iran
TOKYO, Dec 28 (Reuters) - Asian shares eased in low volume with many market players away for year-end holidays, while oil kept gains from  the previous day on concerns about possible supply disruptions after Iran threatened to stop the flow of oil from the Gulf.
"More people want to bring their positions to neutral ahead of the new year's holidays than look for bargain hunting, and that's keeping prices depressed in low volumes," said Tetsuro Ii, the president of Commons Asset Management in Tokyo.

US soy, corn drop from 6-wk tops, farmer selling weighs
SINGAPORE, Dec 28 (Reuters) - U.S. soybeans slid 1 percent, after climbing to a six-week top in the last session, while corn eased as higher farmer selling and a broad-based weakness in the global markets prompted investors to book profit.
"The farmers had kept the supply in the physical market very tight until they saw the rally," said Jonathan Barratt, managing director at Commodity Broking Services in Sydney. "Now they are cashing in on the rally, that is the move which has motivated some selling."

South Brazil, key Argentina soy critically dry
BRASILIA, Dec 27 (Reuters) - No rain is in sight for thirsty soy-growing areas in southern Brazil and in Argentina, forecasters said, threatening crops already hit by long dry stretches and causing futures prices to jump on Tuesday.
December rainfall in Brazil's southernmost state Rio Grande do Sul has been far below the average, which is bad for newly seeded crops, and the situation is growing critical in neighboring Argentina, the top exporter of soy-derived products.

Crop scout Cordonnier cuts S. America crop size
CHICAGO , Dec 27 (Reuters) - Widely followed crop scout Michael Cordonnier has cut his estimates for South American corn and soybean production for 2011/12 and indicated further reductions may be necessary.
"Certainly this is an ominous forecast and if it verifies it would cause more harm to the crops and begin to stress soybeans when they're flowering and setting pods," Cordonnier said.

Dry spell still a concern in Ivorian cocoa regions
DAKAR, Dec 27 (Reuters) - Prolonged drought conditions mixed with the dry harmattan wind last week in most of Ivory Coast's cocoa regions could reduce the size and hamper the quality of Ivorian main cocoa crop, farmers said on Tuesday.
The harmattan, which blows south from the Sahara from December to March, is sweeping through most of Ivory Coast's cocoa regions, reducing air moisture needed for the development of cocoa pods.

China asks major energy users to save 250 mln T coal
BEIJING, Dec 28 (Reuters) - The Chinese government has called on the country's biggest energy users to save 250 million tonnes of standard coal in the five years ending 2015, the National Development and Reform Commission said in a release published on Wednesday.
The 17,000 companies, which annually consume more than 10,000 tonnes of standard coal each, or above 5,000 tonnes for certain stipulated companies, accounted for more than 60 percent of total energy consumption in 2010, the commission said.

Brent steadies above $109, Iran threat supports
SINGAPORE, Dec 28 (Reuters) - Brent crude oil steadied above $109 a barrel after rallying for six straight sessions, supported by Iran's threat to halt oil shipments through the Strait of Hormuz.
"I'm a long term bull and what we are seeing is justification as to why you want to be in for the long term," said Greg Smith, executive director of Global Commodities Ltd.

London copper falls as U.S. housing prices sag
KUALA LUMPUR, Dec 28 (Reuters) - London copper dropped, snapping four days of gains, on concerns that demand for the metal used in pipes and electrical wires will wane after a report showed weak house prices in the United States, the world's largest economy.
"There's no safe haven except for cash," said Tan Teng Boo, who helps manage about $350 million at Capital Dynamics in Kuala Lumpur.

Peru approves independent review of $4.8 bln Newmont mine
LIMA, Dec 27 (Reuters) - Peru will give independent scientists 40 days to review Newmont Mining's $4.8 billion Conga project, the prime minister said on Tuesday, trying to break a bitter political deadlock that has challenged President Ollanta Humala's young administration.
Prime Minister Oscar Valdes agreed with representatives from 32 towns near the proposed gold mine to have an international team of scientists review the environmental impact study for the project, which would replace a string of alpine lakes with reservoirs.

Freeport Indonesia union says halts return to work after strike
JAKARTA, Dec 27 (Reuters) - Workers at Freeport McMoran Copper & Gold Inc's  mine in Indonesia halted on Tuesday their return to work after a three-month strike, pending the resolution of a labour dispute, senior union officials said.
The delay in the return to work will push back the resumption of full operations of the world's second biggest copper mine. The Arizona-based company had earlier said it expected full operations at the mine to resume in early 2012.

Japan Nov zinc exports up 64 pct, led by China
TOKYO, Dec 27 (Reuters) - Japan's exports of refined zinc surged to 11,712 tonnes in November, up 64 percent from a year earlier, driven by a three-fold jump in exports to China, customs-cleared data showed on Tuesday.  
Exports to China increased to 3,578 tonnes, up from 1,191 tonnes a year before, replacing Taiwan as the top importer of Japan's refined zinc and accounting for about 30 percent of total exports.

China steel products demand to reach 646 mln T in 2012 - report
SHANGHAI, Dec 28 (Reuters) - China's consumption of steel products is expected to reach 646 million tonnes in 2012, marginally higher than this year's level, the state-owned China Securities Journal reported on Wednesday.
The report said the China Metallurgical Industry Planning and Research Institute had estimated consumption of finished steel products in the world's top steel producer and consumer at 610 million tonnes this year.

Iron Ore-China market quiet as traders stay on sidelines
BEIJING, Dec 28 (Reuters) - Spot iron ore prices in China remained steady on Wednesday with buyers and sellers in the world's biggest market staying on the sidelines as they await the new year.
"It has been quite crazy this year but this is a normal tailing-off and activities will certainly resume after the Chinese new year," said a trader based in Beijing.

China's daily steel output dips in mid-Dec -CISA data
SHANGHAI, Dec 27 (Reuters) - China's daily crude steel output fell to 1.666 million tonnes in the second ten days of December, down 0.44 percent from the preceding ten days, data from the China Iron & Steel Association showed on Tuesday.
Steel mills in the world's top steel-producing country have continued to reduce production to cope with declining steel demand in the winter season, when construction activity is suspended in northern regions.

Japan Q1 crude steel demand seen at near 2-yr low
TOKYO, Dec 27 (Reuters) - Japanese demand for crude steel is expected to fall 6.2 percent from a year earlier to an almost two-year low of 26 million tonnes in the January-March quarter, as a plunge in steel exports outweighs strong demand from the domestic auto sector, the trade ministry said on Tuesday.
The ministry estimates Japan's annual crude steel output for the year to March 2012 at 105.92 million tonnes, 4.87 million tonne, or 4.4 percent, less than a year ago.

Vale giant ore ship makes maiden arrival in China
SHANGHAI/SINGAPORE, Dec 28 (Reuters) - China has received the first of Vale's  giant iron ore vessels, industry sources said on Wednesday, a major breakthrough for the Brazilian miner after months of uncertainty over the fleet's access to the world's top steelmaker.
Top iron ore exporter Vale is spending billions of dollars to build the world's biggest dry bulk ships to cut the cost of shipping the steelmaking ingredient to China, but until now had failed to gain Beijing's approval for the six vessels already on the water to even stop at a Chinese port.

Gold inches down as growth concerns weigh
SINGAPORE, Dec 28 (Reuters) - Gold edged lower tracking falls in industrial metals and equities, as concerns about global economic growth weighed on market sentiment amid thin year-end trading volumes.
"There have been a couple of positive signs on the U.S. economy, but it's hard to be hung up on them too much," said a Singapore-based trader.

Russian 11-mo gold output up 4.5 pct at 193.8 T-lobby
MOSCOW, Dec 27 (Reuters) - Russian gold companies produced 193.8 tonnes of gold in the first 11 months of 2011, 4.5 percent more than in the same period of 2010, the Gold Industrialists' Union industry lobby said on Tuesday.
The lobby expects Russia to produce 211 tonnes of gold this year, of which 185 tonnes will be mined.

20111228 1056 Global Market & Commodities Related News.

Asian Stocks Drop as U.S. Home Prices Slip (Bloomberg)
Asian stocks (MXAP) fell for a second day amid slow trading, with the regional benchmark index headed for the worst year since 2008, after a report showed U.S. housing prices fell, damping the earnings outlook for Asia’s exporters. Canon Inc. (7751), the world’s biggest camera maker, slipped 1.2 percent. SK Telecom Co. paced declines among South Korean companies that go ex-dividend today. Tokyo Electric Power Co. (9501) declined 12.8 percent after Industry Minister Yukio Edano said the utility should consider temporary government control. The MSCI Asia Pacific Index dropped 0.3 percent to 113.32 as of 10:01 a.m. in Tokyo, with seven of the gauge’s 10 industry groups falling. The measure has declined about 18 percent this year, the most since 2008.

GLOBAL MARKETS-Shares fall in thin trade, oil slips after jump on Iran
TOKYO, Dec 28 (Reuters) - Asian shares eased on Wednesday in low volume with many market players away for year-end holidays, while oil slipped after surging the day
before on concerns about supply disruptions after Iran threatened to stop the flow of oil from the Gulf.
"More people wanting to bring their positions to neutral ahead of the new year's holidays than looking for bargains is keeping prices depressed in low volumes," said Tetsuro Ii, the president of Commons Asset Management.

COMMODITIES-Oil jumps on Iran threat; soy up on Argentine weather
NEW YORK, Dec 27 (Reuters) - Oil rallied on Tuesday on Iran's threat to close a Middle East crude shipping route in response to possible Western embargoes on Iranian oil, while soybean and grain prices surged on weather woes in Argentina.
"The geopolitical fear premium with the Iran comments and also the U.S. consumer sentiment rising to an eight-month high make it hard to be short oil during this holiday week," said Phil Flynn, analyst at PFGBest Research in Chicago.

POLL-U.S. crude stocks seen down on seasonal draws
Dec 27 (Reuters) - U.S. crude oil inventories are expected to have fallen for a seventh straight week as refiners delayed imports to draw down stockpiles for year-end tax considerations, a Reuters poll ahead of weekly supply data showed on Tuesday.
Averaging the views of six analysts, crude stockpiles were expected to be down 1.6 million barrels in the week to Dec. 23, the preliminary survey showed.
Oil rises on Iran warning on Strait of Hormuz
NEW YORK, Dec 27 (Reuters) - Oil rose for a sixth straight session on Tuesday as Iran's threat to stop oil moving through the Strait of Hormuz added to concerns about potential threats to supplies from the region.
"The geopolitical fear premium with the Iran comments and also the U.S. consumer sentiment rising to an eight-month high make it hard to be short oil during this holiday week," said Phil Flynn, analyst at PFGBest Research in Chicago.

NYMEX-Natgas futures end mostly lower in seesaw session
NEW YORK, Dec 27 (Reuters) - U.S. natural gas futures mostly ended lower on Tuesday in a seesaw session, as the milder change in noon computer weather models and concerns about record-high supplies outweighed early short covering ahead of the January contract expiration on Wednesday.
"There's a lot of supply out there. Shale gas is a big part of that, and that's not going to change anytime soon," a Houston trader said, adding he did not expect recent gas rig declines to slow record high gas production until later next year, too late to boost prices this winter.

20111228 0939 Malaysia Corporate Related News.

FGVH on track to list by April
The plan to list Felda Global Ventures Holdings SB (FGVH) on Bursa Malaysia’s Main Market by April next year is on track, said its president and chief executive Datuk Sabri Ahmad in a statement yesterday, amid mounting opposition from various groups claiming to represent the settlers’ interests. According to Sabri, FGVH is firm in its mission to get the listing done within the time frame. His comment came in the wake of an external group, Gabungan Peneroka Generasi Wawasan Felda Kebangsaan (GEMPAK), being formed to question the listing. (Financial Daily)

Northport concessionaire has no knowledge of takeover
Northport (Malaysia) has no knowledge of any takeover proposal by tycoon Tan Sri Syed Mokhtar Albukhary, a port top executive said, dismissing rumours of the reclusive tycoon mulling further consolidation of his port assets. “I don’t know. The only information I get from the government is a letter, which says the application for extension (of lease for Northport and SouthPoint) has been approved”, NCB Holdings chairman Tun Ahmad Sarji Abdul Hamid said. (Financial Daily)

Bumi Armada acquires vessel for RM68m
Bumi Armada announced yesterday that its wholly-owned subsidiary Bumi Armada Offshore Holdings SB has exercised an option to purchase a vessel named Rainbow River for a cash consideration of RM68m. Bumi Armada is in line with its fleet expansion plan and will be completed upon delivery of the vessel, expected in 1Q12. The purchase of vessel is pursuant to MOA with Galaxy Naviera Maritime SA, Panama, dated 28 Sept and will be funded by internally generated funds. (Financial Daily)

Metrod nets RM74.5m from Austrian ops sales
Copper products manufacturer Metrod Holdings expects to make a one-time profit of about RM74.5m from the disposal of its Austrian units for GBP49m (RM202.5m) cash, a deal that will give it ammunition to acquire new assets or business. Metrod said it was disposing off 100% of ASTA Holdings GmbH and 1% stake in ASTA Elektrodraht GmbH to GEP II Beteiligungs GmbH, a unit of Austrian private equity firm Global Equity Partners Beteiligungs-Management GmbH. ASTA owns the remaining 99% of ASTA Elektrodraht. (Financial Daily)

JCorp mulls hotel sales
Johor Corp (JCorp) is considering selling some of its hotel assets and reinvesting the money to drive earnings from its hospitality business. JCorp Hotels & Resorts SB, the hospitality arm of the Johor state’s investment company, had received several offers and is eyeing properties in KL, a senior executive said. JCorp Hotels owns and manages fiver properties in Johor, namely The Puteri Pacific Johor Bahru, Persada Johor International Convention Centre, Sibu Island Resort, Selesa Johor Bahru and Selesa Pasir Gudang and one in Negri Sembilan, which is Selesa Port Dickson. JCorp Hotels deputy CEO Muhamad Mazlan Ali said the six properties are now worth between RM550m and RM600m. (BT)

20111228 0938 Global Economic Related News.

China: To widen property tax reforms in 2012
China will expand a pilot property tax programme in 2012 while speeding up resource tax reforms, said Finance Minister Xie Xuren. “We will summarize the experience from property tax reforms being experimented with and steadily push forward the reforms,” Xie said in remarks published on Monday on the Finance Ministry’s website. Chinese officials have said a pilot property tax programme in Chongqing and Shanghai will eventually be extended to the rest of the country to help cool housing prices rises. (StarBiz)

South Korea: Confidence falls after death of Kim Jong Il
South Korean consumer confidence fell to a three-month low in December, as concern the political outlook in the North will worsen in the wake of Kim Jong Il’s death compounds the risk from Europe’s debt crisis. The sentiment index fell to 99, from 103 in November, the Bank of Korea said. A reading below 100 indicates pessimists outnumber optimists. The survey was conducted between 14 Dec and 21 Dec. North Korea announced the death of its leader on 19 Dec, with his son Kim Jong Un, thought to be under 30, to succeed as ruler. (Bloomberg)

UK: First-time UK home buyers at record low
Homes bought by first time buyers have reached their most affordable level since 2003-but the number of such buyers has hit a record low, Halifax has found. Houses bought by first-time buyers in November were found to be priced at “affordable” levels in 44% of local authority districts in the UK, the highest proportion for 8 years, the First Time Buyer Review found. (Bloomberg)

US: Home prices in 20 US cities decrease more than forecast
Residential real estate prices dropped more than forecast in the year ended October, showing a broad-based decline that indicates the US housing market continues to be weighed down by foreclosures. The S&P index of property values in 20 cities dropped 3.4% from Oct 2010 after decreasing 3.5% in the year ended September, the New York-based group said. The real-estate market is bracing for another wave of foreclosures that may keep pressure on home prices, indicating any housing recovery will take time to develop. Nonetheless, rising builder confidence, a pickup in construction and fewer unsold new properties for sale are among signs the industry that triggered the last recession is steadying. (Bloomberg)

US: Obama to seek USD1.2trn increase in debt limit 30 Dec
The Obama administration will ask Congress to increase federal borrowing authority by USD1.2trn as the nation approaches the debt limit set by law, according to a Treasury Department official. The White House will send the request to Congress on 30 Dec, the day the debt is projected to rise to within USD100bn of the USD15.194 trn limit, the Treasury official told reporters today on condition of anonymity. Congress will be notified under the terms of a deal to raise the limit worked out on 2 Aug after a more than two-month standoff between the administration and Republican lawmakers that was followed by a cut in the US debt rating by S&P’s. The Budget Control Act of 2011 gives Congress 15 days to pass a joint resolution disapproving the increase in the limit. The president can veto such a measure. (Bloomberg)

20111228 0927 Global Market Related News.

Asian Stocks Decline on Drop in U.S. Home Prices (Source: Bloomberg)
Asian stocks (MXAP) fell for a second day, with the regional benchmark index headed for the worst year since 2008, after a report showed U.S. housing prices fell, damping the earnings outlook for Asian exporters. Canon Inc. (7751), the world’s biggest camera maker, slipped 1.3 percent. Billabong International Ltd. (BBG), a maker of surfwear that gets about 50 percent of sales from the Americas, fell 0.3 percent. Tokyo Electric Power Co. (9501) declined 7.1 percent after Industry Minister Yukio Edano said the utility should consider temporary government control. The MSCI Asia Pacific Index dropped 0.2 percent to 113.43 as of 9:18 a.m. in Tokyo. The measure has fallen 18 percent this year, the most since 2008.

Stocks in U.S. Little Changed as Europe Concerns Offset Confidence Index (Source: Bloomberg)
U.S. stocks were little changed, with the Standard & Poor’s 500 Index poised for the biggest fourth-quarter rally since 1999, while oil gained as higher- than-estimated consumer confidence helped offset concern about a drop in American home prices. Copper and gold declined. The S&P 500 (SPX) rose less than 0.1 percent to 1,265.43 at 4 p.m. New York time, and the Dow Jones Industrial Average fell 2.65 points to 12,291.35. Both are among the 10 best performers in 2011 among 91 national indexes tracked by Bloomberg, and the S&P 500 has surged 12 percent this quarter. Crude jumped 1.7 percent after Iran threatened to block transportation through the Straight of Hormuz. Copper lost 1.7 percent, and gold fell 0.7 percent.
The Conference Board’s measure of consumer sentiment topped the median economist projection and climbed to the highest level in eight months, adding to evidence that the U.S. economy is improving. The S&P 500 erased its 2011 loss last week after the fewest Americans since 2008 filed first-time claims for unemployment benefits. Data earlier today showed home prices in 20 U.S. cities dropped more than economists predicted.

Indonesia Stocks to Gain 20% in 2012 on Debt Rating Upgrade, Manulife Says (Source: Bloomberg)
Indonesia’s stocks (JCI) may climb 20 percent next year after posting the third-biggest gains in Asia in 2011 on the prospect of credit-rating upgrades and increased infrastructure spending, said the nation’s third-largest fund. Standard & Poor’s and Moody’s Investors Service may follow Fitch Ratings in upgrading the nation’s debt rating to investment grade, said Yudhistia Susanto, the Jakarta-based head of equity at PT Manulife Asset Management, which manages about $3.8 billion. Susanto favors banking and cement stocks as they will benefit from falling interest rates and higher spending on road, port and airport projects, without naming any shares. “Starting with Fitch and next year Moody’s and Standard & Poor’s, the investment grade story will have a positive impact on our cost of capital,” Susanto said in a Dec. 23 interview. “It will provide sustainability for a low interest-rate environment.”

European Stocks Trade Little Changed; BCP Advances as UniCredit Declines (Source: Bloomberg)
European stocks closed little changed after data on U.S. house prices and consumer confidence gave conflicting signals about the strength of the world’s largest economy. Banco Comercial Portugues SA and Banco Espirito Santo SA (BES) rallied more than 7 percent after a report that Portugal may recapitalize its banks without taking an equity stake. Chemical makers also advanced. Italian lenders UniCredit SpA (UCG) and Mediobanca (MB) SpA retreated at least 4 percent. The benchmark Stoxx Europe 600 Index rose less than 0.1 percent to 241.91 at the close of trading, having fluctuated between gains and losses at least 10 times. The measure rallied 3.5 percent last week as a decline in U.S. jobless claims and increases in consumer confidence and durable-goods orders spurred optimism that the economy is strengthening. The gauge has still retreated 12 percent this year as Europe’s debt crisis spread from Greece to Italy and Spain.

U.S. Seeks RMB Gains; Avoids ‘Manipulator’ Label (Source: Bloomberg)
The Obama administration said it will press for further appreciation of the yuan and called the currency undervalued, while declining to brand China a manipulator of its exchange rate. The Treasury Department, releasing its semi-annual report to Congress on the currency policies of major trading partners, said today it will “closely monitor the pace” of yuan appreciation and “press for policy changes that yield greater exchange-rate flexibility.” The U.S. contends that China uses an undervalued currency to give its exporters an unfair advantage in overseas markets and boost growth. At the same time, the administration of President Barack Obama has sought to avoid actions that could cause friction with the world’s No. 2 economy and the second- largest U.S. trade partner.

Consumer Confidence Rose More Than Forecast (Source: Bloomberg)
Confidence among consumers rose to an eight-month high in December as an improving job market helped Americans regain all the ground lost following the mid- year government budget battle and credit-rating downgrade. The Conference Board’s index increased to 64.5, exceeding all estimates in a Bloomberg News survey and the highest since April, from a revised 55.2 reading in November, figures from the New York-based private research group showed today. Another report showed home prices fell more than projected in October. Unemployment that dropped last month to its lowest in more than two years and the cheapest gasoline since February are prompting households to take advantage of discounts during the holiday shopping season. The improvement in sentiment may help sustain household purchases, which account for about 70 percent of the economy, into the new year.

U.S. Home Prices Fell More Than Forecast (Source: Bloomberg)
Residential real estate prices dropped more than forecast in the year ended October, showing a broad-based decline that indicates the U.S. housing market continues to be weighed down by foreclosures. The S&P/Case-Shiller index of property values in 20 cities dropped 3.4 percent from October 2010 after decreasing 3.5 percent in the year ended September, the New York-based group said today. The median forecast of 27 economists in a Bloomberg News survey projected a 3.2 percent decrease. The real-estate market is bracing for another wave of foreclosures that may keep pressure on home prices, indicating any housing recovery will take time to develop. Nonetheless, rising builder confidence, a pickup in construction and fewer unsold new properties for sale are among signs the industry that triggered the last recession is steadying.

Obama to Choose Powell, Stein for Fed Board (Source: Bloomberg)
President Barack Obama said he will nominate two former U.S. Treasury Department officials for the Federal Reserve Board, including one who served in a Republican administration. Jerome Powell, an attorney who was a Treasury undersecretary for former President George H.W. Bush, and Jeremy Stein, a Harvard University economist who has advised the current administration, are Obama’s picks. Pairing candidates who served under both parties may help ease approval by a Senate where the Democrats’ majority narrowed last year, letting Republicans block administration nominees. The Fed’s seven-member Board of Governors has two vacancies. While the term of Elizabeth Duke, an appointee of President George W. Bush, expires Jan. 31, she can continue to serve until a successor is appointed.

Obama to Seek $1.2 Trillion Increase in U.S. Debt Limit Dec. 30 (Source: Bloomberg)
The Obama administration will ask Congress to increase federal borrowing authority by $1.2 trillion as the nation approaches the debt limit set by law, according to a Treasury Department official. The White House will send the request to Congress on Dec. 30, the day the debt is projected to rise to within $100 billion of the $15.194 trillion limit, the Treasury official told reporters today on condition of anonymity. Congress will be notified under the terms of a deal to raise the limit worked out on Aug. 2 after a more than two-month standoff between the administration and Republican lawmakers that was followed by a cut in the U.S. debt rating by Standard & Poor’s. The Budget Control Act of 2011 gives Congress 15 days to pass a joint resolution disapproving the increase in the limit. The president can veto such a measure.

Obama Wins Most Demand for Debt of U.S. Presidents Since Before First Bush (Source: Bloomberg)
The U.S. government received record demand for its bonds in 2011, pushing longer-maturity Treasuries to their best performance since 1995 in a sign that President Barack Obama may have little difficulty financing a fourth consecutive year of $1 trillion budget deficits. The Treasury Department attracted $3.04 for each dollar of the $2.135 trillion in notes and bonds sold, the most since the government began releasing the data in 1992 during the George H. W. Bush administration. The U.S. drew an all-time high bid-to- cover ratio of 9.07 for $30 billion of four-week bills it auctioned on Dec. 20 even though they pay zero percent interest.
While Standard & Poor’s stripped the U.S. of its AAA credit rating on Aug. 5, Treasuries due in 10 years or more returned 25.6 percent this year. The spreading sovereign debt crisis in Europe and slower global growth are driving investors to the safety of U.S. assets, helping to contain borrowing costs and making it cheaper as a percentage of gross domestic product to finance deficits than when the nation last had budget surpluses.

Wen Urges Protection for Farmer Rights in China, End to Cheap Land Grab (Source: Bloomberg)
Chinese Premier Wen Jiabao called on officials to better protect the rights of farmers and ensure they receive a bigger share of profits from the conversion of their land to industrial and residential use. “We can no longer sacrifice farmers’ land ownership rights to reduce urbanization and industrialization costs,” the official Xinhua News Agency reported Wen as saying at an annual national work conference on rural affairs yesterday. “It’s both necessary and possible for us to significantly increase farmers’ gains from the increase in land value.” Wen’s comments follow a victory by residents of a southern Chinese village this month who staged a two-week protest that forced authorities to back down in a dispute over land. Strikes, demonstrations and other protests in China doubled to at least 180,000 in 2010 from four years earlier, according to Sun Liping, a sociology professor at Beijing’s Tsinghua University.

Yen Intervention Failing Means World’s Best Currency Poised to Strengthen (Source: Bloomberg)
There’s been no better currency in 2011 than the yen and strategists forecast more gains, even as Japan promises to intervene again in foreign-exchange markets and expands the world’s biggest debt burden. The yen’s advance against every major currency, including a 4.1 percent climb against the dollar, illustrates the anxiety in global markets as Europe’s debt crisis stretched into a second year on the heels of the collapse of Lehman Brothers Holdings Inc. and the U.S. housing market crash. Though bond yields in Japan are the second-lowest in the world and government borrowings are double the size of the economy, foreign ownership of its debt is the highest since 2008.
Japanese officials sold at least 14.3 trillion yen ($183 billion) this year to stem gains that cut profits for exporters from Toyota Motor Corp. to Nintendo Co., and Finance Minister Jun Azumi has pledged more action. Intervention in 2012 may fail again as financial turmoil attracts investors to the world’s third-most traded currency for its low volatility.

Japan Factory Output Falls on Global Slump (Source: Bloomberg)
Japan’s industrial production declined in November as the strong yen and slowing overseas demand hamper the nation’s recovery from the March disaster.  Factory output fell 2.6 percent from October, when it rose 2.2 percent, the trade ministry said in a report in Tokyo today. The median estimate of 29 economists surveyed by Bloomberg News was for output to decrease 0.8 percent. Bank of Japan Governor Masaaki Shirakawa said last week that the European debt crisis is the biggest risk for Japan’s economy. Manufacturers including Toyota Motor Corp. (7203) and Nissan Motor Co. (7201) are also under threat from a yen that is hovering close to a postwar high against the dollar.

Japan Turns Activist on Reserves as Rank Slips (Source: Bloomberg)
Japan is crafting ways of using its $1.2 trillion of currency reserves, the world’s second largest, helping bolster its role in international finance as economic stagnation diminishes its share of global output. Prime Minister Yoshihiko Noda, who is in New Delhi today, is likely to seal an agreement making about $10 billion of Japan’s reserves available to India if needed, according to a Japanese government official speaking on condition of anonymity. Noda three days ago oversaw a deal with China to expand use of the yuan and yen in bilateral trade and purchase Chinese bonds. At home, officials are deploying 10 trillion yen ($128 billion) in a fund aiding companies in overseas acquisitions.
“While Japan is losing its influence in various areas in the global economy, foreign reserves can work as an effective tool to yield Japanese influence and show its presence,” said Masaaki Kanno, chief Japan economist at JPMorgan Chase & Co. in Tokyo and a former chief foreign-exchange dealer at Japan’s central bank. “This is still a remote concept, but Japan’s recent moves are also considered as a significant step to foresee a future possible unification of Asian economies.”

Japan Set to Unveil $10 Billion India Currency Swap Deal During Noda Visit (Source: Bloomberg)
Japan is poised to unveil a currency-swap line with India in its second international financial agreement with top Asian powers this week. Finance Minister Jun Azumi told reporters today in Tokyo that Japan is negotiating an agreement with India, the third- largest economy in Asia behind China and Japan. The deal is likely to be unveiled during a trip by Prime Minister Yoshihiko Noda to India that starts today, with the amount of the swap line about $10 billion, a Japanese government official said on condition of anonymity. Japan agreed with China two days ago to promote direct trading of the yen and yuan without using dollars and start purchases of Chinese bonds for its foreign-exchange reserves. The deal with India would expand the ability to respond to financial shocks as Prime Minister Manmohan Singh’s administration contends with a slump in the rupee that risks stoking inflation.

Austerity Fuels Worst Christmas in 10 Years for Italy’s Retailers: Economy (Source: Bloomberg)
Italian retailers had the worst Christmas in 10 years, consumer group Codacons said, as austerity measures to combat the sovereign debt crisis prompted households to cut spending. Italians spent 48 euros ($62.75) less per person this holiday season than the average of the past five years, Rome- based Codacons said in a statement on its website. The shoe and clothing sector was hit the most, with sales dropping 30 percent from previous years, it said, adding retailers won’t recover the decline during seasonal promotions that start in January. The discount period “will be a flop,” with sales declining as much as 40 percent compared with 2010, Carlo Rienzi, the head of Codacons, said in the statement.

20111228 0926 Global Commodities Related News.

Hedge-Fund Managers Miss Biggest Rally in Prices in 10 Weeks: Commodities (Source: Bloomberg)
Hedge funds reduced bets on higher commodity prices to the lowest level since 2009 just as raw materials headed for their biggest weekly rally in two months. Money managers cut their combined net-long position across 18 U.S. futures and options by 15 percent to 454,512 contracts in the week ended Dec. 20, the lowest since March 2009, data from the Commodity Futures Trading Commission show. The Standard & Poor’s GSCI gauge of 24 commodities climbed 4.5 percent last week, erasing this year’s declines and pushing the index toward its third consecutive annual advance.
While the S&P GSCI is 15 percent below the 32-month high reached in April, prices gained last week on signs the U.S. economy is proving resilient. Durable-goods orders rose in November by the most in four months, and jobless claims unexpectedly fell to the lowest in more than three years. Concern that shortages will emerge in commodities from copper to crude oil spurred Goldman Sachs Group Inc. to stick with a bullish outlook this month even as funds cut their holdings.

Commodities Seek A Few Blessings in 2012 (Source: CME)
Commodities face a test of faith in 2012. The tenets that have underpinned the asset class in recent years, strong growth in emerging countries allied to steady demand in the developed world, are under pressure from the euro-zone crisis and signs of a slowdown in China. Investors are worried already: Hedge funds cut commodities exposure by 50% from May to December, Barclays Capital says, during which time the Dow Jones-UBS Commodity Index has fallen 19%. Some strong signals will be needed to lure back the faithful in 2012. Europe's troubles don't only have an impact through the Continent's weaker demand for commodities. As European banks deleverage, they are pulling back on providing trading finance, the grease that keeps the commodities engine chugging along. Lower European demand for imports also means weaker export activity in countries like China, where manufacturing activity shows signs of contracting.
Meanwhile, China's faltering property market -- prices are falling in half its cities -- could damp construction growth there and hence demand for metals. The accumulating risks have already made a mark. Industrial metals have fallen 25% since late July; agricultural products are down 21% since late August. If the macro backdrop worsens, some commodities may have further to fall than others. Copper, for example, is still 85% above the cost of production for the industry's highest-cost producers, according to Barclays Capital. By contrast, the price of aluminum is 22% below the industry's marginal cost. That already is causing some producers to cut supply, meaning aluminum could be close to its price floor. Similarly, any crude-oil price declines may be arrested by supply cuts in producing countries. Governments like those in Saudi Arabia and Russia need solid oil prices to balance their fiscal positions.
The complicating factor will be internal divisions within the Organization of Petroleum Exporting Countries, with Saudi Arabia and Iran locked in a contest for regional supremacy and all members having to make way for rising Libyan and Iraqi oil output. Among agricultural commodities, soybeans could benefit as more land is given over to corn production. Demand could exceed supply by 1.2%, J.P. Morgan forecasts, the first soybean deficit since 2009. Unpredictable factors will continue to buffet individual commodities. A repeat of last winter's harsh weather could push grain, coal and iron-ore prices higher. Strikes at two of the world's largest copper mines helped support that metal in 2011. And oil will still move to the rhythms of geopolitics and threats of war. But a more sustained rise for commodities will require a swift resolution of the euro-zone crisis and evidence that Beijing is managing a soft landing for the Chinese economy.
Hopes of this fuel optimism for perennial commodities bulls. Goldman Sachs sees Brent crude closing 2012 at $127.50 a barrel, up 18%, and copper at $9,500 a metric ton, up 28%. Such high expectations may be the domain of the true believers for some time.

Corn (Source: CME)
US corn futures jump to 6-week highs on worries about South America's crop. Hot, dry weather--particularly in Argentina--fuel gains. "I think we're getting to the point now where you start worrying about it," says Jack Scoville at Price Futures. The market surged above its 50-day average in early trading, which attracted more buying. Crude oil's strength today added further support, but gains were limited by farmer selling, traders say. They also warn that with thin holiday trade, the market could be prone to other wide swings this week. CBOT March corn ends up 2.2% at $6.33 1/4 a bushel.

Wheat (Source: CME)
US wheat futures surge amid strength in other grains and short-covering. Prices were supported by corn and soy, which were aided by weather threats to South America's crop. But wheat outgained its peers amid funds' net-short position. Fundamentally, traders say the market remains hindered by weak export demand and abundant world supplies. Prices hit 6-week highs, with CBOT March wheat climbing 3.7% to $6.44 3/4 per bushel as KCBT March jumped 3.1% to $6.95 3/4 and MGEX March added 2.1% to $8.62 1/2.

Rice (Source: CME)
US rice futures sag, ending lower for the third session in a row amid weak demand and despite strength in other grains. Lack of demand for US rice is looming over the market, analysts say. CBOT January rice ends down 10 1/2c at $13.80/bushel.

A third of Ukraine '12 winter grains in poor state
KIEV, Dec 26 (Reuters) - A third of Ukraine's winter grain crops are in poor condition due to a severe drought that hit the country during sowing, the Farm Ministry said on Monday.
The ministry said 79.7 percent of the sown area had sprouted as of Dec. 26 against 93 percent at the same date in 2010.

Russia AgMin sees average 11/12 winter grain losses
MOSCOW, Dec 26 (Reuters) - Russian Agriculture Minister Yelena Skrynnik said on Monday that winter grain losses in the 2011/12 crop year are expected to be average, meaning farmers may reap a good winter cereals harvest.
Russia has sown 16.1 million hectares with winter grains  for the 2012 crop, up from 15.9 million a year ago following a severe drought, but down from 18.9 million hectares in 2009.

Vietnam's 2011 rice exports hit record 7.19 mln T
HANOI, Dec 26 (Reuters) - Vietnam's rice exports this year jumped 4.36 percent from 2010 to a record high of 7.19 million tonnes, the Agriculture Ministry said on Monday, beating previous industry projections.
Rice export revenue rose 14 percent from last year to an estimated $3.7 billion, the ministry said in its monthly report.

Ukraine grain exports 1.4 mln T Dec 1-23
KIEV, Dec 23 (Reuters) - Ukraine exported about 1.4 million tonnes of grain, mostly maize, between Dec. 1 and Dec. 23, analyst ProAgro said on Friday, citing data from Ukrainian sea ports.
The consultancy said the volume included 1.03 million tonnes of maize, 324,000 tonnes of wheat and 39,000 tonnes of barley.

India May Review Grain Export Policy (Source: CME)
India's rice exports have moved briskly since a ban was lifted in September, but uncertainty about further exports has gripped the market as the government is set to review the open export policy with some fearing further export may be limited to ensure sufficient domestic stocks. The government had not specified any limit on the quantity exported when the ban was lifted in September, but Food Minister K.V Thomas has said no more than 2 million tons each of wheat and rice may be exported as the government needs sufficient stocks to introduce a food security law which is currently being debated in parliament. "We will hold an internal meeting in the next few days on whether to continue with the exports. Thereafter, we will request the trade ministry to seek further directions from a panel of ministers," a senior food ministry official, who didn't want to be identified, told Dow Jones Newswires.
India's rice exports, which have already touched 1.4 million tons since September, is expected to hit 2 million tons by February, traders said. On the other hand, wheat exports stalled quickly due to higher local prices. No more than 300,000 tons of wheat has been exported after the ban was lifted. Traders are lobbying with the government to allow rice exports to continue, arguing that the poor wheat offtake leaves scope for more rice shipments from the country's granaries. The food ministry official said the government was open to the idea, "if the situation permits." India currently has nearly two times the foodgrain stocks it needs under buffer stock requirements and has been finding it difficult to store grains as the new crop comes in, leaving large quantities stored in fileds, at the mercy of weather. The government allowed exports partly to ease the pressure on storage facilities.
Further exports, however, will likely hinge on whether the government feels it would have enough stocks left to meet a proposed food security law that guarantees cheap foodgrains to the majority of the population. "We are worried that the government may suddenly stop all exports. It could jeopardise contracts and exporters may have to suffer the losses," said a senior executive with one of India's top commodities trading companies. "Frankly, we are not very hopeful," he said. India is currenly selling common grade rice in the export market at prices between $385/ton and $450/ton, free on board. That's is well below the $540/ton-$570/ton being offered by Thai exporters, leaving sufficient demand for Indian rice in the global market. Thailand, the biggest exporter of rice in the world, raised prices after flooding earlier this year damanged some of that country's rice crop.
The prospect for wheat exports has faded as local prices are currently around $300/ton, slightly above the $280/ton-$290/ton in the international market. "The prospect of Indian wheat exports, except for some leftover quantities in Gujarat, doesn't seem bright," said M.K. Dattaraj, former president of the Roller Flour Millers Federation of India.

Corn Pops on Southern Heat (Source: CME)
U.S. corn futures have rallied recently on concern that hot, dry weather could persist in South America as the crop enters a critical phase of development. Corn futures had slumped for much of the last three months as the U.S. crop came out of the field and export demand dried up amid increased competition. But the focus is now shifting to South America to see if production there will fall short of expectations, leaving the U.S. to fill the gap. Corn for March delivery at the Chicago Board of Trade climbed 6.3% last week, settling at $6.1950 a bushel. Soybean futures continued to gain on the same weather concerns, rising 2.9% on the week to close at $11.63 a bushel. "The situation in South America bears watching," said Shawn McCambridge, senior grains analyst for Jefferies Bache. "It could become a larger issue if conditions continue to deteriorate."
The heat of the Southern Hemisphere's summer has been compounded by La Nina, a phenomenon in which tropical waters in the Pacific Ocean turn unusually cold, causing dry conditions in South America. Intense heat and dry weather in Argentina, coupled with parched conditions in Brazil, have gotten the attention of traders who had for weeks been primarily taking cues from investor sentiment on the European debt crisis. The corn crops in Argentina and Brazil are entering their pollination phase. Both countries are key global producers, so any reduction in output would reduce corn buyers' options and could shift export demand back to the U.S. While the region received some rain last week, traders are worried that it won't be enough to offset the longer-term trend. Forecasts call for dry weather this week and a drier-than-normal January.
"The problem is there's been quite a break between shower systems, and the coverage area hasn't been as good as you'd like," said David Streit, a meteorologist with Commodity Weather Group in Bethesda, Md. Analysts said last week's surge in corn prices wasn't driven solely by the weather. Mr. McCambridge said the market has pulled back too sharply, touching a one-year low earlier this month. Investors also have been exiting short positions, speculating sharp price declines are over for the near term. Traders also note that export demand, which was lackluster in recent months, has lately shown some signs of picking up. Still, they said that despite the hot weather, it is too soon to assume any yield loss to corn or other crops. Trading markets driven by weather is "tough enough here in the U.S., when I'm seeing the rain," said Jim Riley, an analyst with the Linn Group, a Chicago brokerage. "They're that much tougher in South America."

Corn Posts Longest Rally in Year on Adverse Weather; Soy Gains (Source: Bloomberg)
Corn rose, capping the longest rally in a year, and soybeans jumped the most in 11 weeks on speculation that adverse weather threatens to reduce output in South America, bolstering demand for U.S. supplies. About 50 percent of the crops in Argentina will be dry in the next 10 days after weekend rain stayed north of the main growing regions, Commodity Weather Group LLC said in a report. As much as a third of Brazil’s crops face a lack of rain, the forecaster said. “Current weather trends are raising the odds that the South American crops will be reduced,” Dave Marshall, a farm- marketing adviser at Toay Commodity Futures Group LLC in Nashville, Illinois, said in a report. “Odds favor continued gains into the end of the year, as long as the South American weather forecasts don’t change.”

India cotton arrivals drop 25.3 pct to 8.81 mln bales
MUMBAI, Dec 27 (Reuters) - Cotton arrivals in India till Dec. 25 in the 2011/12 season fell by a quarter to 8.81 million bales of 170 kg each, the state-run Cotton Corp of India said on Tuesday, as farmers in the key Maharashtra state were holding back their produce.
In the year-ago period, the arrivals stood at 11.79 million bales, the agency said in a statement. The Indian cotton year runs from October to September.

Vietnam's Dec coffee exports drop 26.8 pct y/y
HANOI, Dec 26 (Reuters) - Vietnam's coffee exports in December fell an estimated 26.8 percent from a year ago to 120,000 tonnes, or 2 million bags, in line with market expectations, the Agriculture Ministry said on Monday.
Coffee exports in 2011 are estimated at 1.22 million tonnes, or 20.33 million 60-kg bags, up only 0.2 percent from 2010, the ministry said in its monthly report.

Rains damage Costa Rica coffee in the fields
SAN JOSE, Dec 23 (Reuters) - Heavy rains in Costa Rica last week caused a loss of about 1 percent of the coffee crop in the field, the national coffee institute said on  Friday.
Officials at the institute, known as ICAFE, said at least 15,333 60-kg bags worth of coffee were lost. That tally does not include a spat of torrential rain in October that cut the institute's 2011/12 crop estimate down to around 1.54 million bags from the 1.58 million last season.

Cotton 2011/12 ending stocks expands, demand weak
Dec 23 (Reuters) - Influential cotton publication Cotlook said Friday that estimates of world 2011/12 cotton ending stocks rose 14.9 percent in December from last month as consumption weakened further due to the shaky world economic outlook.
In its December report, Cotlook said world cotton 2011/12 ending stocks were forecast at 4.088 million tonnes, up 14.9 percent from its November forecast that stocks would show a surplus of 3.556 million tonnes.

Diamonds to Outpace Gold as Spending in Asia Rises: Commodities (Source: Bloomberg)
Diamonds prices are poised to rise for the next four years, outpacing gold, as increased spending on luxury goods in China, India and the Middle East outpaces supplies of the precious stone, analysts said.  The average price of rough, or uncut, diamonds will probably rise 9 percent to $145 a carat next year, 1.4 percent in 2013 and 4.8 percent in 2014, BMO Capital Markets analyst Edward Sterck said. The gem should gain 2.6 percent in 2015 and 3.2 percent in 2016, he said. Gold is forecast to decline for three years starting 2013, following a 19 percent gain in 2012, according to the median of seven analyst forecasts compiled by Bloomberg News. Demand for diamonds may grow at double the pace of supply through 2020 because of an expanding middle class in China and India, Bain & Co. said this month in a report that didn’t give price forecasts.
The two nations, and the Middle East, will account for 40 percent of global diamond demand by 2015, compared with about 8 percent in 2005, said Anglo American Plc. (AAL), which agreed to boost its stake in De Beers, the world’s largest diamond miner, to 85 percent last month.

Brent above $108 on supply worries, US data supports
SINGAPORE, Dec 27 (Reuters) - Brent crude rose slightly to trade above $108, supported by supply disruptions in Syria and Iranian naval exercises in a key shipping lane, while improved U.S. home sales data and year-end short-covering also supported prices.
"Syria could be a support factor for the time being, but we will not see a big climb or rocket high prices because of that," Ken Hasegawa, a derivatives manager with brokerage Newedge in Tokyo, said.

Petronas in talks with oil majors for petchem tie-up -sources
KUALA LUMPUR, Dec 23 (Reuters) - Petronas is in talks with several global oil majors including Shell  and Exxon Mobil  to develop petrochemical plants within its $20 billion refinery complex in southern Malaysia, two sources with direct knowledge of the matter said.
Malaysia's national oil company is also talking to Japanese firms Itochu Corp  and Mitsubishi Corp  as well as to Dow Chemical Co  -- the largest U.S. chemical maker -- as it seeks to tap surging Asian demand and diversify its earnings, the sources told Reuters.

Oil Trades Near Six-Week High on Iran Threat to Strait of Hormuz Shipping (Source: Bloomberg)
Oil traded near the highest in six weeks after Iran threatened to block crude transportation through the Strait of Hormuz and U.S. consumer confidence in December beat expectations. Futures were little changed after settling at the highest level since Nov. 16 yesterday. Iran’s official Islamic Republic News Agency cited Vice President Mohammad Reza Rahimi as saying the country would bar shipments through the strait if sanctions are imposed on its oil exports. The Conference Board’s index of consumer sentiment reached the highest level since April. Oil for February delivery was at $101.17 a barrel, down 17 cents, in electronic trading on the New York Mercantile Exchange at 7:48 a.m. Singapore time. It rose $1.66, or 1.7 percent, to $101.34 a barrel yesterday, the highest settlement since Nov. 16 and the sixth consecutive advance, the longest rally since November 2010. Futures have climbed 11 percent this year after increasing 15 percent in 2010.

Oil Extends Longest Rally Since 2010 (Source: Bloomberg)
Oil capped its longest rally in more than a year as Iran threatened to block transportation through the Strait of Hormuz and confidence among U.S. consumers beat expectations in December. Crude settled at the highest level in six weeks after Iran’s official Islamic Republic News Agency cited Vice President Mohammad Reza Rahimi as saying the country would bar shipments through the strait if sanctions are imposed on its oil exports. Futures also rose as the Conference Board’s index reached the highest level since April. “The Iranian threats are getting increasingly bold,” said Jason Schenker, president of Prestige Economics LLC, an Austin, Texas-based energy consultant. “The threat doesn’t have to be likely to have an impact on the market, because if it were to be carried out it would potentially be huge.”

Japan Nov copper exports to China double yr/yr
TOKYO, Dec 27 (Reuters) - Japan's exports of copper cathode to China doubled in November from a year earlier, pushing its up total exports of refined copper during the month by 34 percent, data from the Ministry of Finance showed on Tuesday.
Japan's exports of cathode to China, the world's top consumer of the metal, rose to 28,542 tonnes in November, up from 14,165 tonnes a year earlier. That follows a 57 percent jump in October.

Japan Jan-Mar crude steel demand seen -6.2 pct y/y
TOKYO, Dec 27 (Reuters) - Japan's demand for crude steel is expected to fall 6.2 percent in the January-March quarter from a year earlier, the trade ministry said on Tuesday.
Total crude-steel demand is seen at 26 million tonnes during the quarter, based on a government survey of steelmakers and looking at inventory levels at the end of December, the ministry said.  

Italy 2011 steel output seen up, flat in 2012
MILAN, Dec 23 (Reuters) - Steel output in Italy, the second-biggest producer in the European Union after Germany, is expected to rise 11 percent in 2011 and remain at the same level in 2012 as unfolding euro zone crisis hits demand, a senior industry official said on Friday.
"We expect to close this year with an increase of about 11 percent (of steel output) ... to about 28.5 million tonnes," Giuseppe Pasini, chairman of Italy's steel industry body Federacciai, told Reuters confirming his earlier forecast.

METALS-Shanghai copper steady, investors eye US data
KUALA LUMPUR, Dec 27 (Reuters) - Shanghai copper was steady on Tuesday, after dropping more than 1 percent in the previous session in its biggest one-day decline in a week, while investors kept an eye on U.S. data for clues on the health of the world's largest economy.
Workers at Freeport McMoran Copper & Gold Inc's mine in Indonesia may delay returning to work, despite a deal to end a three-month strike, in the absence of a decision on the removal of about 100 workers at a local unit, a union official said on Monday.

PRECIOUS-Gold hovers around $1,600; US data, Europe eyed
SINGAPORE, Dec 27 (Reuters) - Gold hovered around $1,600 an ounce on Tuesday, as investors stayed on the sidelines in the final week of the year with lingering concerns about the euro zone debt crisis.
Recent upbeat U.S. economic data spurred a rally in riskier assets including equities and industrial metals, and sent gold prices up about half a percent last week.

20111228 0925 Soy Oil & Palm Oil Related News.

ITS CPO export down 11.6% to 1,181,141 tonnes for the period of 1~25 Dec 2011.
SGS CPO export down 11.9% to 1,182,707 tonnes for the period of 1~25 Dec 2011.

Soybeans (Source: CME)
US soy futures climb to 6-week highs like others in the grain complex as traders grow increasingly nervous about hot, dry weather in South America. After a 3-day break, traders returned to work to find weekend rains were disappointing in Argentina and southern Brazil. Meanwhile, forecasts remain hot and dry, which is a growing threat to crops there. The market surged above its 50-day moving average in early action, which added to the upward momentum, traders say. Soy got added support from crude oil and fresh export sales to China. CBOT January soybeans end up 3.2% at $11.99 3/4 per bushel.

Soybean Meal/Oil (Source: CME)
March soyoil climbs 0.86c to 52.53c/pound and March soymeal rises $10.90 to $311.70/short ton.

Malaysian Palm Oil Output Seen Up In 2012 (Source: CME)
Palm oil output in Malaysia will increase only modestly in 2012 after a year of record crop yields, while rising crude-oil prices, and greater demand will lift benchmark prices, said Lodin Wok Kamaruddin, group managing director at Boustead Holdings Bhd. (2771.KU), Malaysia's fifth-largest listed plantation firm. Palm oil production in Malaysia, the world's No. 2 producer after Indonesia, could rise by 1 million metric tons to 19.3 million tons in 2012, Lodin said in a recent interview. The Malaysian government has forecast output to increase to 18.3 million tons in 2011 from 17 million tons in 2010, a 7.6% rise after two consecutive years of declines. "Better planting materials and improving estate practices will aid production [in 2011], although the rise [in 2012] will be tempered by palm trees' resting period after record yields in 2011," Lodin said.
Lodin's 2012 forecast is slightly more bullish than that of Dorab Mistry, a leading analyst who tipped Malaysia's 2012 crude palm oil output at 18.6 million to 19 million tons. Bad weather has been forecast for next year, and if it materializes it may combine with expected lower yields to help reverse the decline in palm oil prices seen this year. Prices are headed for a drop of 21% in 2011 due to higher production and worry over the health of the global economy. "Leading vegoil analysts [James] Fry and Mistry gave widely differing views on palm oil prices for the year ahead. But I think the market will hold up above MYR3,200 a ton next year because of the crude-oil factor," Lodin said. ICE Brent crude oil has traded above $100 a barrel for most of the year, making biofuels cheaper alternatives and raising demand for CPO.
"Should crude oil rise past $120 a barrel next year, more soyoil will be channeled toward biodiesel production, thus creating a vacuum in food production and that can be filled by palm," Lodin said. Lodin also said India and China, both top buyers of palm oil, will offset reduced demand from Europe as rising affluence in both countries has increased the demand for palm oil in food production. Mistry, who heads the trading desk at Indian conglomerate Godrej International, this month reiterated a forecast for CPO of MYR3,300/ton in January due to tighter supply. However, Fry, chairman at London-based agribusiness consultancy LMC International, this month said he expected CPO to fall toward MYR2,600/ton by June due to concern about global economic growth, with crude-oil prices weighing on vegetable oil prices. Boustead Holdings has an agriculture land bank of 97,648 hectares, of which 76% is planted with oil palms.
The company is expected to harvest around 1.1 million tons of fresh fruit bunches this year, Lodin said.

Wilmar Shelves China IPO Plan (Source: CME)
Wilmar International Ltd. has shelved plans for an initial public offering of shares in its Chinese unit and is buying back the shares it doesn't already own from entities linked to its founders. Wilmar International unit WCL Holdings Ltd. is buying the 1.61% interest in Wilmar China Ltd. it doesn't already own from the Kuok Group for HK$1.9 billion ($248.6 million), the world's biggest palm oil trader by volumes said in a statement to Singapore Exchange on Friday. The Kuoks, a Malaysian Chinese family whose assets include the Shangri-la chain of hotels and Hong Kong English-language newspaper the South China Morning Post, had paid the same amount when they purchased the 1.61% stake in Wilmar China in 2009. Nevertheless, the company's projected profit for 2011 is bigger than in 2009, Wilmar International said in the statement. The acquisition by the Kuok Group in 2009 was a "strategic investment" before the proposed IPO of Wilmar China on the Hong Kong stock exchange.
Wilmar International aims to streamline ownership of the Chinese unit by buying back the shares, according to the statement. "Given it is an interested party transaction, we believe the price tag may not be relevant nor indicative of WCL's current intrinsic value...This move, however, does suggest that near-term spin-off of WCL would be unlikely," J.P. Morgan said in a note. Wilmar International's shares in Singapore were unchanged at S$5.03 at 0235 GMT after initially falling to as low as S$5.00. The benchmark Straits Times Index was down 0.2%. In a separate announcement Friday, Wilmar International said it agreed with its joint venture partners and the local government to abandon a proposed property project at Laobian in China. Wilmar International unit WCA Pte. Ltd. and units of Kerry Properties Ltd. (0683.HK) and Shangri-La Asia Ltd. have jointly asked the Yingkou city government to terminate their joint bid for the proposed project, the statement said.
The three companies are already working on a separate project in the same city located at Bayuquan, Yingkou city. A deposit of CNY271.6 million paid by the partners for their successful bid for the Laobian project will be repaid to the joint venture company, it said.

Palm oil slips on weak exports, weather eyed
KUALA LUMPUR, Dec 27 (Reuters) - Malaysian crude palm oil futures dropped as moderating exports hurt sentiment, while a 6 percent rally last week gave traders an excuse to book profits as well.
"The market was overbought last week and now we have slowing exports and an unresolved euro zone debt crisis to consider," said a trader with a foreign commodities brokerage in the Malaysian capital.

Light rain headed for dry south Brazil soy
BRASILIA, Dec 23 (Reuters) - A cold front will bring badly-needed rain to Brazil's southernmost state and important soy producer Rio Grande do Sul, but volumes will be low and a longer-range forecast showed the region was in for more dry weather, forecaster Somar said Friday.
Parts of Brazil's No. 3 soy state would see 24 millimeters (0.95 inch) Friday to Saturday, raising the chances of the crop there germinating successfully and sprouting shoots. The state's soy is planted later than in many others.

Bunge eyes India expansion with 1,200 TPD edible oil refinery
MUMBAI, Dec 26 (Reuters) - Agricultural processor Bunge Ltd  is planning to set up an edible oil refinery on India's western coast as it aims to expand in the world's top importer after buying a local firm last week, the head of its Indian unit told Reuters.
Bunge, the world's largest oilseed processor and among the top sugar and ethanol producers, last week said it had agreed to buy the edible oil business of Amrit Banaspati Company  for 2.21 billion rupees ($42 million).

PZ Cussons' Nigeria palm refinery starts work in Q3
LAGOS, Dec 23 (Reuters) - Consumer product maker PZ Cussons  expects a $56 million palm oil refinery in partnership with Singapore's Wilmar International  to be operational by the third quarter of next year, the chief executive of Cussons' Nigerian unit said on Friday.
Christos Giannopoulos said the joint venture company PZ Wilmar will invest 100 billion naira ($612 million) in Africa's second biggest economy over the next 5-7 years to develop oil palm plantations that will feed the refinery and reduce import  bills.