Friday, December 30, 2011

20111230 1813 FCPO EOD Daily Chart Study.

FCPO closed : 3175, changed : +20 points, volume : lower.
Bollinger band reading : pullback correction little upside biased.
MACD Histrogram : resume upward, buyer still in charge.
Support : 3150, 3100, 3070, 3050 level.
Resistance : 3200, 3250, 3270, 3300 level.
Comment :
FCPO closed recorded gain with declining volume transacted. Overnight soy oil closed recorded loss and currently rebounding higher while crude oil price trading between gains and losses.
Weather factor still influencing market to trade higher while awaits next Tuesday export data.
Daily chart formed a small up bar candle closed below upper Bollinger band level after market opened higher and moved side way within 25 points range bound market to closed near the high of the day.
Chart reading remained suggesting a pullback correction 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.

20111230 1728 FKLI EOD Daily Chart Study.

FKLI closed : 1510.5, changed : +0.5 point, volume : lower.
Bollinger band reading : little upside biased with possible pullback correction.
MACD Histrogram : turned lower, buyer taking profit.
Support : 1505, 1500, 1494, 1485 level.
Resistance : 1515, 1530, 1540, 1550 level.
Comment :
FKLI closed 1 tick lower with quiet volume traded with Jan contract doing 9. points discount compare to cash market that closed substantially higher due last minutes window dressing activities. Overnight U.S. market closed recorded gains and today Asia markets ended mostly higher while European markets having little change.
Last minutes window dressing activities lifted cash market and Jan 2012 contract to surge higher.
Spot month daily chart formed a small down doji bar candle closed below upper Bollinger band level after market opened higher and trade side way within 5 points range bound market and closed near the low of the day.
Chart study still suggesting a little 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 resistance or strength with quick cut loss and profit target.

20111230 1706 Regional Markets EOD Daily Chart Study.

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

20111230 1008 Global Economic Related News.

Vietnam: Growth holds near 6% as higher rates counter exports
Vietnam’s growth held near 6% this quarter, reducing the pressure for further monetary tightening after higher interest rates limited the boost to the economy from exports and domestic consumption. Gross domestic product increased 6.1% in the fourth quarter from a year earlier, the General Statistics Office said yesterday. The preliminary estimate compares with a revised 6.07% growth rate for the three months through September. For the full year, Vietnam’s economy expanded 5.89%, down from the 6.78% rate for 2010. Vietnam’s government has struggled this year to steady its economy, devaluing the dong as the currency weakened on the black market and raising borrowing costs to contain the fastest inflation in Asia. (Bloomberg)

Hong Kong: Trade deficit is biggest since ’52 as exports cool
Hong Kong’s trade deficit swelled to the biggest on record in November as export growth slowed on faltering European demand for Asian goods. Overseas shipments rose 2% from a year earlier to HKD278.6bn (USD35.8bn), and imports gained 8.8%, the government said yesterday. The deficit of HKD44.1bn was the highest since records began in 1952, according to Bloomberg data. The outlook for exports is also clouded by a slowdown in China’s economy as Premier Wen Jiabao prolongs a crackdown on property speculation. (Bloomberg)

US: Pending sales of existing homes rose 7.3% in November
The number of Americans signing contracts to buy previously owned homes rose more than forecast in November as falling prices and low borrowing costs boosted demand. The index of pending home sales increased 7.3% to the highest level since April 2010 after climbing 10.4% the prior month, figures from the National Association of Realtors showed yesterday. The industry that triggered the 18-month recession that ended in June 2009 is showing signs of stabilizing as construction picks up, builder confidence improve and the number of houses on the market declines. Nonetheless, another wave of foreclosures may weigh on real-estate values next year. (Bloomberg)

US: Jobless claims drop to three-year low in past month
Fewer Americans filed applications for unemployment benefits over the past month than at any time in the past three years, a sign the US labor market is on the mend heading into the new year. The four-week moving average for claims, a less volatile measure than the weekly figures, dropped to 375,000 last week, the lowest level since June 2008, Labor Department figures showed yesterday. Applications rose for the first time in a month in the week ended 24 Dec, climbing by a more-than-forecast 15,000 to 381,000. Their recent decline has stoked speculation the world’s largest economy was on the cusp of showing bigger gains in employment. (Bloomberg)

US stocks rise on bets economy will weather Europe’s crisis
US stocks rose, restoring the 2011 gain in the Standard & Poor’s 500 Index, as data signaled the world’s largest economy is weathering Europe’s debt crisis. The S&P 500 rose 1.1% to 1,263.02, almost wiping out yesterday’s slump. The Dow Jones Industrial Average climbed 135.63 points, or 1.1%, to 12,287.04. (Bloomberg)

20111230 1007 Malaysia Corporate Related News.

JCorp unlikely to accept Malay chamber’s bid for QSR, unit
Johor Corp (JCorp) is unlikely to accept a hastily planned competitive bid to buy Kulim (M) Bhd’s stake in QSR Brands and its fast food unit, KFC Holdings (KFCH). The Malay Chamber of Commerce Malaysia (DPMM) said yesterday it was rounding up “friendly parties” to jointly buy Kulim’s interests in QSR Brands and its unit, KFCH, even after the company had said it was not seeking other bids after accepting the one made by Massive Equity SB (MESB). However, JCorp had earlier said it will not sell its stake in MESB to “outsiders” and that CVC was roped in because of its expertise in the food business. (BT)

Cypark gets RM14.71m contract to upgrade landfill site
Cypark Resources Bhd has received a contract worth RM14.7m to upgrade the landfill site at Kok Foh, Jempol in Negeri Sembilan. It received the letter of acceptance for the contract dated 23 Dec from the National Solid Waste Management Department (NSMWD). (Financial Daily)

CCM streamlines operations
Chemical Company of Malaysia (CCM) has embarked on an internal restructuring to streamline and consolidate its polymer businesses into a single entity in a RM126.4m deal. The exercise would see the acquisition by CCM's wholly-owned subsidiary, Usaha Pharma (M) SB, of the entire equity interest in Innovative Polymer Systems SB, Innovative Resins SB and Delta Polymer Systems SB from CCM and CCM Usaha Kimia (M) SB. (StarBiz)

20111230 0959 Global Market Related News.

Asian Stocks Advance on U.S. Optimism (Source: Bloomberg)
Asian stocks (MXAP) climbed in the last trading day of 2011, with the region’s benchmark index trimming its biggest yearly decline since 2008, as rising U.S. home sales signaled the world’s largest economy is weathering Europe’s debt crisis. Sony Corp. (6758), Japan’s biggest exporter of consumer electronics, gained 1 percent. James Hardie Industries SE (JHX), a building-materials supplier that gets almost 70 percent of sales from the U.S. rose 1.2 percent. Billiton Ltd., Australia’s top oil producer, climbed 0.3 percent after crude prices increased. The MSCI Asia Pacific Index (MXAP) added 0.2 percent to 113.04 as of 9:52 a.m. in Tokyo. The measure has lost 0.5 percent this month and is set for an 18 percent drop this year. For the week, the gauge is down 0.6 percent.

Stocks in U.S. Advance on Bets Economy Will Weather European Debt Crisis (Source: Bloomberg)
U.S. stocks rose, restoring the 2011 gain in the Standard & Poor’s 500 Index, as data signaled the world’s largest economy is weathering Europe’s debt crisis. All 10 groups (SPXL1) in the S&P 500 advanced as financial, industrial and commodity gauges had the biggest gains. Bank of America Corp. (BAC), General Electric Co. (GE) and Alcoa Inc. increased at least 1.2 percent. A measure of 12 homebuilders (S15HOME) in S&P indexes climbed 4.4 percent as PulteGroup Inc. and Lennar Corp. (LEN) jumped more than 4.6 percent. The Dow Jones Transportation Average, a proxy for economic growth, added 1.4 percent. The S&P 500 rose 1.1 percent to 1,263.02 at 4 p.m. New York time, almost wiping out yesterday’s slump. The Dow Jones Industrial Average climbed 135.63 points, or 1.1 percent, to 12,287.04 today. About 4.2 billion shares changed hands (MVOLUSE) on U.S. exchanges, or 46 percent below the three-month average.

European Stocks Climb as U.S. Business Activity Expands More Than Forecast (Source: Bloomberg)
European (SXXP) stocks advanced for the fourth time in five days as business activity in the U.S. expanded more than forecast. Bayer AG (BAYN) led a gauge of chemical companies higher. Fiat SpA retreated 1.9 percent after Banca IMI SpA cut its recommendation on the shares. Mining companies followed a drop in copper. The Stoxx Europe 600 Index (SXXP) gained 0.9 percent to 242.46 at the close in London. The gauge has rallied 13 percent (SXXP) from this year’s low on Sept. 22 amid better-than-estimated U.S. economic data and optimism that policy makers will contain the euro-area debt crisis. “Generally news from the U.S. has been better than expected,” although projections had been muted, said Didier Abbato, a vice president and senior trading adviser at Saxo Bank in Copenhagen. “In absolute terms, U.S. figures are not great. They’re just slightly better than expectations.”

U.S. Business Activity, Housing Beat Forecasts (Source: Bloomberg)
Companies cranked out more goods in December and pending sales of existing homes jumped in November for a second month, pointing to a pickup in U.S. economic growth as 2011 comes to a close. The Institute for Supply Management-Chicago Inc. said today its business barometer (CHPMINDX) was little changed at 62.5 from a seven- month high of 62.6 in November. The index of signed contracts (USPHTMOM) to buy previously owned houses rose 7.3 percent after climbing 10.4 percent the prior month, the National Association of Realtors said. Both figures surpassed the median estimate of economists surveyed by Bloomberg News. “2011 is ending on a solid note,” said Ryan Sweet, a senior economist at Moody’s Analytics Inc. in West Chester, Pennsylvania, who forecast a reading of 63 for the Chicago index. “Manufacturing has some momentum,” he said, and “we’re starting to see some signs of life in housing.”

Sales of U.S. Homes Beat the Forecasts (Source: Bloomberg)
The number of Americans signing contracts to buy previously owned homes rose more than forecast in November as falling prices and low borrowing costs boosted demand. The index of pending home sales (USPHTMOM) increased 7.3 percent to the highest level since April 2010 after climbing 10.4 percent the prior month, figures from the National Association of Realtors showed today in Washington. Economists forecast a 1.5 percent gain, according to the median estimate in a Bloomberg News survey. The industry that triggered the 18-month recession that ended in June 2009 is showing signs of stabilizing as construction (CNSTTMOM) picks up, builder confidence improves and the number of houses on the market declines. Nonetheless, another wave of foreclosures may weigh on real-estate values next year.

Consumer Comfort Fell From Five-Month High (Source: Bloomberg)
Consumer confidence in the U.S. retreated last week from a five-month high, showing an improvement in sentiment will take time to develop. The Bloomberg Consumer Comfort Index (COMFCOMF) dropped to minus 47.5 in the period ended Dec. 24 from minus 45 the prior week, the highest reading since July. A gauge of the buying climate fell by the most in three months. Declining home prices (SPCS20Y%), stagnating wages and an unemployment rate at 8.6 percent may be weighing on sentiment. At the same time, household spending, which accounts for about 70 percent of the world’s largest economy, continues to increase.

Jobless Claims in U.S. Drop to Three-Year Low (Source: Bloomberg)
Fewer Americans filed applications for unemployment benefits over the past month than at any time in the past three years, a sign the U.S. labor market is on the mend heading into the new year. The four-week moving average for claims, a less volatile measure than the weekly figures, dropped to 375,000 last week, the lowest level since June 2008, Labor Department figures showed today in Washington. Applications (INJCJC) rose for the first time in a month in the week ended Dec. 24, climbing by a more-than- forecast 15,000 to 381,000. The jump in claims last week may say more about their volatility during this time of year than about the state of the job market, according to economists like Eric Green. Their recent decline has stoked speculation the world’s largest economy was on the cusp of showing bigger gains in employment.

Fed Says Wall Street Dealers Tighten Terms on Hedge-Fund Securities Trades (Source: Bloomberg)
Wall Street dealers made it tougher for hedge funds to finance trading of securities and derivatives in the three months through November, a Federal Reserve survey showed today. Responses “indicated a broad but moderate tightening of credit terms applicable to important classes of counterparties,” especially hedge-fund clients, trading real estate investment trusts and nonfinancial corporations, according to the quarterly survey of senior credit officers at 20 dealers covering the period of September to November. The central bank released the report in Washington. The report adds to evidence of stress in the financial system from Europe’s sovereign-debt crisis. Investor concern about the continent’s turmoil has helped drive the premium banks pay to borrow dollars to the highest in more than two years. The Fed survey didn’t discuss causes of the tighter financing terms.

Rail-Freight Surge Shows U.S. Skirting Recession (Source: Bloomberg)
North American railroads’ freight volumes surged 17 percent last week, the most in a year, in an indication that the U.S. economy will avoid a second recession. Rising shipments of retail goods helped drive the jump in carloads for the period ended Dec. 24, the Association of American Railroads said today. The trade group released the results after government data showed U.S. jobless claims fell to a three-year low in the past month. The double-dip recession “that people feared only six, eight, 10 weeks ago never materialized,” said Tony Hatch, an independent railroad analyst in New York. “Things are going pretty well in a variety of the commodities that the railroads carry.” Analysts focused on pre-Christmas rail traffic this year because record retail sales over the Thanksgiving weekend suggested that the seasonal peak in freight shipping might extend into December. Many retailers delayed building inventory amid concerns that the economy was weakening.

Slowing Chinese Growth Means Ore-Vessel Rates at Lowest in Decade: Freight (Source: Bloomberg)
The weakest growth in demand in at least a decade for shipments of iron ore, the second-biggest commodity cargo after crude oil, means rates for the largest vessels will plunge to the lowest level since 2002. Capesizes, each hauling about 160,000 metric tons of ore, will earn an average of $15,000 a day next year, about 4 percent less than in 2011, the median estimate in a Bloomberg survey of 10 analysts shows. While that implies losses for ship owners and investors in their companies, speculators can profit because forward freight agreements, handled by brokers and used to bet on transport costs, are anticipating an average of $16,367, according to data from the London-based Baltic Exchange.
Owners are contending with the biggest fleet in history as vessels ordered when rates reached $233,988 in 2008 continue to leave ship yards. The glut may widen because trade in iron ore will expand 2.5 percent next year as the number of capesizes rises 9.8 percent, according to Clarkson Plc, the world’s biggest shipbroker. Economic growth in China, whose steel mills consume 65 percent of all seaborne ore, will slow to the weakest since 2001, economist estimates compiled by Bloomberg show.

South Korean Inflation Above Target Signals BOK May Hold Off on Rate Cut (Source: Bloomberg)
South Korea’s inflation remained above the central bank’s target range this month, bolstering the case for officials to refrain from cutting benchmark interest rates in January. Consumer prices (KOCPIYOY) rose 4.2 percent from a year earlier, matching November's gain, Statistics Korea said today in Gwacheon, south of Seoul. The median estimate in a Bloomberg News survey of 12 economists was for a 4 percent increase. Prices increased 0.4 percent in December from the prior month, the biggest gain since August. Geopolitical risk from the death of North Korea’s leader this month is adding to uncertainty for Asian policy makers who have paused rate tightening or cut interest rates due to the European sovereign-debt crisis and global economic slowdown. The Bank of Korea will likely cut interest rates by March to support growth as average consumer price gains moderate to 2.6 percent next year and production is set to be weakest in the first quarter of 2012, according to HSBC Holdings Plc.

Singapore GDP Probably Fell in Fourth Quarter (Source: Bloomberg)
Singapore’s economy probably contracted in the fourth quarter as manufacturing slumped, increasing pressure on the island’s policy makers to stimulate growth even as inflation accelerates. Gross domestic product (SGDYTY) probably dropped an annualized 5 percent in the three months through December from the previous quarter, when it rose 1.9 percent, according to the median (SGAVYOY) of 11 estimates in a Bloomberg News survey. The report is scheduled for release at 8 a.m. on Jan. 3. Singapore forecasts economic expansion will moderate next year as a faltering global recovery weighs on demand for goods and services. The island’s exports have dropped even after the central bank, which uses the local dollar to manage inflation, moved in October to slow gains in the currency, which has retreated 4.7 percent against the dollar in the past two months.

Thai Central Bank May Be Saddled With Debt (Source: Bloomberg)
Thailand’s government will today press the central bank chief to take on $35 billion of legacy debt from bank bailouts as Prime Minister Yingluck Shinawatra looks for fiscal scope to finance flood defenses. Bank of Thailand Governor Prasarn Trairatvorakul meets with cabinet members in Bangkok over the proposal to shift the debt to the BOT’s balance sheet. Deputy Prime Minister Kittiratt Na- Ranong said yesterday the step would save the government as much as 65 billion baht ($2 billion) in annual interest costs that could be used to fund anti-flood measures. The push risks deepening concern that Yingluck’s administration is infringing on the central bank’s independence, after Kittiratt in October said the BOT should lower interest rates to help businesses cope with the country’s worst flooding since 1942. The government itself lacks unanimity on the move, with Finance Minister Thirachai Phuvanatnaranubala warning it could hurt investor confidence and stoke inflation.

ECB Has More Scope to Cut Rates as Prices Wane (Source: Bloomberg)
The European Central Bank has more room to cut interest rates to a record low early next year after reports showed the sovereign debt crisis is damping inflation pressures. The rate of growth in M3 money supply, which the ECB uses as a gauge of future inflation, fell to 2 percent in November from 2.6 percent in October, the Frankfurt-based central bank said today. Growth in loans to households and companies across the 17-nation euro area also slowed, while inflation in Germany, the region’s largest economy, decelerated in December. The data reinforce the view “that underlying inflationary pressures are easing and that the ECB has ample scope to cut interest rates again in the early months of 2012,” said Howard Archer, chief European economist at IHS Global Insight in London. “Euro-zone inflation is poised to retreat markedly over the coming months.”

Italy Auctions $25.8 Billion of Bonds in Week as ECB Buoys Investor Demand (Source: Bloomberg)
Italy auctioned 7 billion euros ($9 billion) of debt to bring the total raised this week to almost 20 billion euros, underscoring how the European Central Bank is helping the world’s fourth-biggest borrower tap markets. Today’s sale by the Treasury in Rome fell short of the 8.5 billion-euro target even as borrowing costs declined from last month. Italy sold 9 billion euros in bills yesterday at about half the rate of the previous sale last month in its first auction since the ECB loaned 489 billion euros to banks to ease credit amid the region’s debt crisis. “Italy was not able to raise the maximum amount they wanted to, but the fact that they managed to sell this much at the end of the year should be taken as a positive sign,” said Eric Wand, a fixed-income strategist at Lloyds TSB Bank Plc in London. “The level of excess liquidity from the ECB will remain elevated for a while and some of that may get recycled into sovereign debt. That should support short-dated peripheral bonds.”

20111230 0958 Global Commodities Related News.

Big Harvest, Weak Global Outlook To Pressure China's Agriculture Prices Further (Source: CME)
China's agricultural commodity futures fell across the board in 2011, as private stockpiling, worries over a double-dip global recession and tightening domestic credit cast a pall especially on cotton, sugar and edible oils. That was in sharp contrast to 2010 when changing appetites drove sharp price increases in China's agricultural markets, as the Asian giant became the largest agricultural export market for the U.S., the world's biggest agricultural producer. The pressure on prices could continue next year as a big domestic harvest and an uncertain global outlook continue to weigh on sentiment. Last year's rally, underscored by China turning a net corn importer, fizzled this year on a range of factors dominated by broadly weaker global markets. Soybean futures fell 4.4% on year while corn was 3.2% lower on the Dalian Commodity Exchange in line with softer Chicago farm futures. Wheat fell 14.3% on the Zhengzhou Commodity Exchange.
Prices are likely to remain under pressure after China announced another record harvest in December, taking its grain output up 4.5% to 571.2 million metric tons. Still, underpinned by China's fundamentally strong demand, soybean and corn prices have declined by smaller margins than prices of other commodities such as cotton and edible oils. Weighed by an inventory glut, cotton prices fell sharply in the first half this year and have not recovered much since. Zhengzhou cotton is down about 26% this year, the steepest fall among major agricultural contracts. In comparison, prices nearly doubled in 2010. Edible oils prices also fell sharply this year, with palm oil futures down 19.3% and soyoil down 15.3%. "Since September, edible oil prices have fallen sharply and medium-to-smaller traders incurred broad-based losses, negatively affecting restocking demand," the state-backed China National Grain and Oils Information Center said Thursday.
Despite a mild rebound in prices recently, bulk edible-oil sales have remained sluggish, it said. Sugar futures on the Zhengzhou bourse fell 15.6% this year, pressured by the weakness in global sugar prices and massive imports. Near-month ICE raw sugar futures are around 23.12 cents now, down 28% on year following a global surplus. China will likely mark a fourth consecutive year of sugar output falling short of demand this year, Rabobank said. In the first 11 months, sugar imports rose 48% to 2.4 million tons, with the pace of imports accelerating in November to reach the second-highest monthly volume on record. Despite hopes among global corn exporters that China would sharply hike its corn imports, Chinese corn intake fell 24% in the first 11 months to 1.2 million tons. A bumper corn harvest has taken the pressure off depleted state corn reserves.

Corn (Source: CME)
US corn futures close lower on profit-taking and an improved South America weather outlook. The lower settlement ends eight straight days of higher prices. Midday weather forecasts showing more rain potential in southern Brazil and Argentina helped prompt profit-taking, traders say. Still, given gains of more than 60c recently, "this isn't much of a selloff," Leffler Commodities' Tom Leffler says. March CBOT corn ends down 4 1/2c to $6.38 a bushel.

Wheat (Source: CME)
US wheat futures end lower as the market tracked corn, which fell on rain in the South America weather forecast. Traders say wheat has little fresh news and weak demand, and is taking cues from corn. Both crops compete in world feed markets. CBOT prices remain at their highest levels since mid-November, but volume is light. Profit-taking across the grains complex after recent gains pressured prices. CBOT March wheat ends down 6c to $6.45 1/4 a bushel; KCBT March wheat closes down 1 1/4c to $6.98; MGEX March wheat down 7 3/4c to $8.55 1/4.

Rice (Source: CME)
US rice futures spring to the highest close in three weeks, rallying by the exchange's 50-cent daily limit amid concern about a storm in India. "Some traders are taking notice of a cyclone hitting the south of India and the possible damage to rice, corn and groundnuts," brokerage FCStone says. Market has tumbled in recent months due to poor export demand. CBOT Jan rice closes up 3.6%, or 50c, to $14.25 per hundredweight.

Wheat Drops, Halting Eight-Session Rally, as Demand for U.S. Grain to Slow (Source: Bloomberg)
Wheat futures fell on speculation that demand will slow from importers and U.S. processors after the longest price rally in four years. Futures surged 12 percent in the previous eight sessions, the longest rally since October 2007, on speculation dry weather in South America would cut grain supplies. About 13.5 million bushels of U.S. wheat were inspected for export in the week ended Dec. 22, 18 percent less than a week earlier, according to the government. Competition has increased for U.S. suppliers, as countries including Russia and Australia boosted output. Prices “have gotten into levels that start affecting economics,” Darrell Holaday, the president of Advanced Market Concepts in Wamego, Kansas, said in a telephone interview. “The competitiveness of the product becomes a little hard to justify.”

Corn Traders Extend Bullish Bets on South America Crop Damage: Commodities (Source: Bloomberg)
Corn traders are bullish for a fifth consecutive week on speculation that dry weather in South America is damaging crops, boosting demand for U.S. supplies at a time when stockpiles are predicted to shrink to a 16-year low. Nineteen of 25 traders surveyed by Bloomberg expect corn to advance next week. Lower-than-average humidity and dry soil will curb crop development in Argentina and southern Brazil through at least Jan. 7, according to T-Storm Weather LLC, a forecaster in Chicago. Argentina is the world’s biggest corn shipper after the U.S. and typically starts reaping its grain in March.
While prices doubled in the past two years as record demand eroded inventories, corn fell as much as 27 percent since the end of August as the U.S. forecast the biggest-ever global harvest. The grain rallied 10 percent in the past two weeks on mounting concern that South American weather will undermine that prediction and drive stockpiles lower. Argentina and Brazil are expected to produce 90 million metric tons, enough to supply the 27-nation European Union for 17 months, USDA data show.

China Industrial Corn Consumption May Slow (Source: Bloomberg)
Industrial use of corn in China, the second-biggest consumer, may grow at the slowest pace in at least five years as the economy cools, curbing the need for imports, said state-affiliated researcher The amount processed may expand by 5 percent in the year ending Sept. 30 to 55 million metric tons, compared with 11 percent last year, analyst Zhang Zhixian said in an interview on Dec. 27. The researcher is owned by China Grain Reserves Corp., which manages state grain inventories. Lower Chinese demand for imported corn may pressure prices in Chicago, which have tumbled 17 percent since Aug. 31 on high global grain supplies and concern that Europe’s deepening debt crisis and a slowing global economy may sap demand. China’s economy will grow 8.5 percent next year, down from 10.4 percent in 2010, the Organization for Economic Cooperation and Development projected on Nov. 28.

Soybeans May Open Lower as Rain Forecast for Brazil Crops; Wheat May Fall (Source: Bloomberg)
What follows are opening calls for U.S. grain and oilseed markets.
-- Soybean futures may open 7 cents to 10 cents a bushel lower on the Chicago Board of Trade on speculation that rain in southern Brazil and Paraguay will revive yield prospects, Jim Gerlach, the president of A/C Trading Co. in Fowler Indiana, said in a telephone interview. Soybean-oil futures are expected to open 0.3 cent to 0.5 cent a pound lower, and soybean-meal futures may open $2 to $3 lower per 2,000 pounds.
-- Wheat futures may open 2 cents to 4 cents a bushel lower on the CBOT, the Kansas City Board of Trade and the Minneapolis Grain Exchange on speculation that U.S. exports will slow after the grain posted the longest rally since October 2007 and the dollar rose to a 15-month high against the euro, making American supplies more expensive on world markets, Gerlach said.

Taiwan Plans More Soybean Imports In Containers On High Bulk Prices (Source: CME)
After canceling a recent bulk tender due to rising prices, Taiwanese importers plan to buy soybeans in containers, which costs around 10 cents a bushel less, trading executives said. "We...plan to buy containerized cargoes if the prices continue to rise," said an importer in Taipei. The Kaohsiung branch of Taiwan's Breakfast Soybean Procurement Association Wednesday scrapped a tender to import 60,000 metric tons of soybeans, citing high prices. Traders said Cargill made the lowest cost-and-freight offer, around a premium of $2.069/bushel over the March contract on the Chicago Board of Trade. Soybean prices are rising due to unusually dry weather in major producing regions of South America, where crops are in the development stage, with CBOT futures hovering around a six-week high. The March contract is trading around $12/bushel. Taiwan is world's fifth-largest importer of soybeans after China, the European Union, Japan and Mexico, buying close 2.5 million tons a year.

India Food Ministry Wants Rice Exports To Continue (Source: CME)
India's food ministry is in favor of continuing rice exports as the country's stocks are at a comfortable level, Food Minister K.V. Thomas said, dropping an initial plan to limit the shipments. The government hadn't specified any limits on the quantity to be shipped when exports of rice and wheat were allowed Sept. 9, but the minister as well as some officials had previously said that no more than 2.0 million metric tons each of wheat and rice may be shipped so as to ensure sufficient stocks before the government introduces a food security law that is currently before parliament. "Our view is that more non-basmati rice can be exported as production is huge and stocks are comfortable," Thomas told Dow Jones Newswires, immediately after an internal meeting at the food ministry to assess the stock position. India shipped 1.6 million tons of rice between Sept. 9 and Dec. 27, and exports are expected to reach 2.0 million tons by February, traders say.
Thomas said there will be sufficient stocks to meet the proposed food security law even after continuing rice exports, but the final decision on the subject will need to be taken by a ministerial panel. India has nearly double 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 fields at the mercy of weather. The country had 54.72 million tons of wheat and rice stocks as of Dec. 1. The government allowed exports partly to ease the pressure on storage facilities. Any decision by the ministerial panel on allowing further exports will mainly depend on whether it feels there would be enough stocks left to meet the proposed food security law that guarantees cheap foodgrains to the majority of the population. No date has been fixed yet for the panel's meeting.
Traders have also been lobbying for continuing the rice exports, arguing that the wheat offtake for shipments has been poor, leaving scope for more rice sales from the country's granaries. The prospect for wheat exports has faded as local prices have inched above international rates. Also, expectations of a good winter-sown wheat crop means the country can easily allow export of another 2.0 million tons of rice, said a food ministry official, who didn't want to be identified.

Cyclone To Hit India's Southern Tamil Nadu State; May Damage Crops (Source: CME)
A severe cyclone is likely to hit parts of southern India Friday morning, which could damage some of the standing crops of rice and corn, the weather department's chief said. "We expect the cyclone Thane to be severe in four districts of Tamil Nadu," Ajit Tyagi, director general of the India Meteorological Department, said at a news conference. The cyclone may also cause some rains Friday in the western state of Maharashtra, the country's top sugar-producing province, Tyagi said.

Western Australia's Big Wheat Harvest Buoyed By Record Northern Crop -CBH (Source: CME)
A record crop in the northern Wheatbelt of Western Australia state is underpinning the state's second-largest harvest of winter grains on record, Cooperative Bulk Handling Ltd. reported. Deliveries of wheat, barley, canola and other winter grains to unlisted Perth-based CBH, which dominates storage and handling in Western Australia, reached 12.65 million metric tons on Wednesday, eclipsing the previous second-largest intake, set in the crop year ended March 31, 2006, of 12.5 million tons, the company said in a weekly harvest report. To date, around 92% of CBH's in 2011-12 intake--estimated at 13.5 million tons, more than double 2010-11's drought-reduced harvest--has been received, CBH said. Typically, 70% of the harvest is wheat and deliveries to CBH account for 90% of total state production--nearly all of which is exported. Grain receivals in the northern Geraldton Port zone have reached 3.4 million tons, easily exceeding the previous record of 2.6 million tons set in 2003-04, it said.
CBH General Manager Operations Colin Tutt said that though the harvest is one of the largest on record, it is also one of the most challenging. "We have seen significant weather delays [and] quality issues," he said, also citing a reduction in the performance of rail in hauling grain to port. "Although the harvest has been pleasing from a production [yield] perspective, with low grain prices and deteriorating grain quality due to inclement weather events, there will be growers in some districts struggling to make a profit, which is the disappointing part of such a high-production year," Tutt said. Separately, Viterra Inc. reported the harvest in South Australia slowed in the week ended Sunday due to wet weather, with the company, which dominates upcountry storage and export logistics in that state, having received 6.2 million tons of winter grains.
Harvest continues in the state's southeast, with grain receivals proceeding from growers who have finished harvesting but held grain on farms, helping fill the strong export shipping program, it said in a weekly harvest report issued Wednesday.

Corn, wheat snap 8-day rally; soy falls for 2nd day
SINGAPORE, Dec 29 (Reuters) - Chicago wheat slid 1 percent, while corn lost 0.8 percent as the grain markets snapped eight straight sessions of gains on risk aversion which weighed on equities and buoyed the U.S. dollar.
"Right now it seems like a bit of risk off environment as we are seeing that across the equity markets," said Adam Davis, a senior commodity analyst at Merricks Capital in Melbourne.

Cyclone could damage south India coastal crops-weather office
NEW DELHI, Dec 29 (Reuters) - Rice, groundnut and maize crops in coastal areas of southern India could be damaged by a cyclonic storm which is currently expected to hit land on Dec. 30, the Indian Meteorological Department said on Thursday.
"Storm is expected to damage the standing rice, groundnut and maize in coastal districts of Tamil Nadu (state) and rice and groundnut in coastal Andhra Pradesh" state," the weather office said on its website.

Mexico dry bean output seen down due to drought-attache
Dec 28 (Reuters) - Following are selected highlights from a report issued by a U.S. Department of Agriculture attache in Mexico:
"The marketing year 2011/12 dry bean production estimate is lowered by 220,000 tonnes to 600,000 tonnes as a result of drought, lower yields, and lower-than-previously estimated planted area. The Secretariat of Economy is expected to issue a year-long 100,000 tonnes dry bean duty-free import tariff rate quota in early 2012 to compensate for the domestic production decline. Corn, sorghum, wheat, and rice supply and demand estimates remain unchanged."

Russia 2011 grain exports seen at 22.6 mln tonnes-attache
Dec. 28 - Following are selected highlights from a report issued by a U.S. Department of Agriculture attache in Russia:
"In July - November 2011 Russia exported over 15 million tonnes of grain, including 12.8 million tonnes of wheat and 1.7 million tonnes of barley. However, in November 2011, price competition in the world grain markets increased with low-priced Argentine wheat entering key Mediterranean markets.

La Nina dryness cuts Argentine corn forecasts
BUENOS AIRES, Dec 28 (Reuters) - Argentina's 2011/12 corn crop will be smaller than initial forecasts due to dry weather linked to La Nina, but production should still reach a record, analysts say.
The lowest estimates, figuring in losses caused by the La Nina climate phenomenon, remain higher than the record 23 million tonnes of corn harvested in the 2010/11 season.

Russian 2011 grain crop seen at 93.8 mln T - AgMin
MOSCOW, Dec 28 (Reuters) - Russian 2011 grain crop is preliminarily estimated at 93.8 million tonnes, up from 61 million tonnes in the drought-hit 2010, but down from 97 million in 2009, the Agriculture Ministry said on Wednesday.
This volume will allow Russia to cover all domestic needs and to export 25 million tonnes of grain in the 2011/12 crop year, the ministry said in a statement.

Ukraine grain exports at 1.65 mln T Dec.1-26
KIEV, Dec 28 (Reuters) - Ukraine exported 1.65 million tonnes of grain between Dec. 1-26 against 1.81 million tonnes in the same period in November, analyst UkrAgroConsult said on Wednesday.
The consultancy said in a report the volume included 1.22 million tonnes of maize, 380,000 tonnes of wheat and 50,000 tonnes of other cereals.

Sugar below 3-week peak, robustas above 2-month low
LONDON, Dec 29 (Reuters) - ICE raw sugar futures eased in early trading and hovered below the prior session's three-week high, while arabica coffee and cocoa dipped, and robustas were weaker and above a two-month low, pressured by a big crop in top producer Vietnam.ICE benchmark raw sugar futures dipped on light investor selling and book-squaring, trading below Wednesday's a three-week peak, and were pressured by big crops in the EU, Russia, Ukraine, India and Thailand.

Brazil's Bahia cocoa main crop now past peak
BRASILIA, Dec 28 - Warehouse deliveries in Brazil's top cocoa-producing state Bahia slowed in the week to Dec. 25 from the previous week, data from Bahia Commercial Association showed, marking the start of the harvest's declining phase.
"Arrivals from Bahia have started to diminish but still maintained a volume that is the highest for the Christmas week of the last 15 years," said Bahia-based cocoa analyst Thomas Hartmann.

Cocoa Drops for Fifth Day on Supply Outlook; Sugar, Cotton Futures Climb (Source: Bloomberg)
Cocoa fell for a fifth session on signs that supplies will be ample as Europe’s debt crisis threatens economic growth. Sugar, cotton and orange juice gained, while coffee slid. In the week ended Dec. 18, cocoa deliveries to ports from farms in Ivory Coast, the world’s biggest producer, rose 14 percent from a year earlier to 578,368 metric tons, a document from the industry’s regulator showed. Purchases from farmers in Ghana, the second-largest grower, rose 4.3 percent in the first nine weeks of the current season, the Ghana Cocoa Board said. “Prices have weakened on supply ideas, especially from western Africa, where arrivals and export declarations are running ahead of last year,” Jack Scoville, a vice president for Price Futures Group in Chicago, said in an e-mailed report.

Cameroon raises cotton price to curb smuggling
YAOUNDE, Dec 28 (Reuters) - Cameroon state firm SODECOTTON has increased farmgate raw cotton price by 27.5 percent for the current harvest in an effort to dissuade farmers from smuggling their produce to neighbouring Nigeria, a spokesman said on Wednesday.SODECOTTON said it will pay farmers 255 CFA francs ($0.50)per kg of cotton this season from 200 CFA per kg in the previous season.

Ivorian cocoa buyers seek end to grinders tax break
ABIDJAN, Dec 28 (Reuters) - Major buyers of Ivorian cocoa have urged the government of the world's top producing nation to cut a 20-year old tax break given to local grinders, arguing the incentive handed grinders an unfair market advantage.
Members of an international and local buyers association, which includes France-based commodities firm Sucden and leading cocoa trader Armajaro, said in a letter to Ivorian authorities  the tax benefit distorted the market.

Mosaic cuts fertilizer output due to weak prices
Dec 28 (Reuters) - Fertilizer producer Mosaic Co  said on Wednesday it will cut production of phosphate, a key nutrient used for crop production, because prices have fallen to unsustainable levels.
The Minnesota-based company said it would cut its planned production of phosphate by 250,000 tonnes over the next three months, blaming economic uncertainty for a drop in prices. It said it still expected record global demand for fertilizer in 2012.

US gasoline demand up over Christmas holiday
Dec 28 (Reuters) - U.S. retail gasoline demand rose sharply last week from the previous week as Americans hit the road for the Christmas holiday, but demand was down from the same week in 2010, MasterCard said in its weekly SpendingPulse report on Wednesday.  
Last week's gasoline demand rose 7.7 percent compared with the previous week, MasterCard said, but demand was 1.6 percent lower than it was a year ago.

Oil Heads for Third Yearly Gain on Iran Tension, U.S. Economy Speculation (Source: Bloomberg)
Oil rose for a second day, heading for a third yearly increase, on speculation that escalating tension in the Middle East may disrupt supplies as a recovery in the U.S. economy bolsters demand. Futures advanced for the eighth day in nine, extending this year’s gain to 9.2 percent. A U.S. State Department spokeswoman yesterday called Iran’s threats to shut the Straits of Hormuz “irrational behavior.” About one-sixth of global supply travels through the seaway. The country faces sanctions on its crude exports and a possible boycott by European oil buyers over its nuclear program. Prices gained yesterday after U.S. jobless claims fell to a three-year low. Crude for February delivery gained as much as 19 cents, or 0.2 percent, to $99.84 a barrel on the New York Mercantile Exchange. It was at $99.74 at 8:20 a.m. Singapore time. Prices climbed 15 percent in 2010. This year’s gain would be the smallest since 2006 when the contract increased 0.02 percent.

Oil above $107, US stocks and Iran in focus
LONDON, Dec 29 (Reuters) - Oil held above $107 a barrel as investors looked ahead to a U.S. supply report expected to show a drop in crude stocks and as Iranian threats to halt a vital oil trade lent support.
"Worries over Iran are supportive. The market is up even though the API stats were bearish, so people may be waiting for the EIA," said Christopher Bellew, an oil broker at Jefferies Bache.  

Thailand, Cambodia aim for offshore oil development
PHNOM PENH, Dec 29 (Reuters) - Offshore oil and gas reserves in disputed waters of the Gulf of Thailand could take up to a decade to tap, despite progress between Thailand and Cambodia towards restarting talks on joint development, Thailand's energy minister said on Thursday.
The two countries are keen to reach an agreement on joint exploration and development of the Overlapping Claim Area (OCA) in the Gulf, which has been delayed by political upheaval in Thailand and sometimes deadly border disputes.

Vietnam 2011 crude oil output rises 1.1 pct y/y -govt
HANOI, Dec 29 (Reuters) - Vietnam produced an estimated 15.18 million tonnes, or 305,000 barrels per day (bpd), of crude oil this year, a rise of 1.1 percent from 2010, the government said on Thursday.
December's output reached an estimated 1.42 million tonnes, up 4.0 percent from the same month last year, the General Statistics Office said in its monthly report.

Gold Slides to Five-Month Low as Stronger Dollar Erodes Investment Demand (Source: Bloomberg)
Gold, on the brink of a bear market, posted the longest slump since March 2009 as gains in the dollar reduced demand for precious metals as alternative assets. The dollar climbed as much as 0.6 percent against the euro as an auction of Italian bonds fell short of the government’s target. Gold, down 12 percent in December, is headed for the biggest monthly drop since October 2008, compared to the greenback’s almost 3 percent gain against a six-currency basket. “The developments in Italy have perked up the dollar, and that is pushing gold down,” Sterling Smith, an analyst at Country Hedging Inc. in St. Paul, Minnesota, said in a telephone interview. “I expect gold to remain in negative territory this week.”

20111230 0957 Soy Oil & Palm Oil Related News.

Soybeans (Source: CME)
US soybean futures end lower as South American weather forecasts eased worries about the crop and prompted profit-taking. Possible rains for southern Brazil this weekend and Argentina late next week prompted traders to extract risk premium from the market. Year-end positioning and profit-taking also dominating trade. Lackluster export demand, and questions about demand above the $12/bushel level also hang over the market. Still, prices up sharply from $11 on Dec 14. Jan. CBOT soy ends down 10 3/4c to $11.87 1/2 a bushel.

Soybean Meal/Oil (Source: CME)
Products followed soybeans lower with March soymeal down $3.30 to $310.80 per short ton and March soyoil down 0.64c to 51.52c/lb.

Palm oil retreats from 5-week high, weather eyed
SINGAPORE, Dec 29 (Reuters) - Malaysian crude palm oil futures dipped  in cautious year-end trading, but losses were limited by worries that heavy rains may hit production in second-largest producer Malaysia.
"There's light profit-taking in the market, but it's going to be a wait-and-see game on the severity of the rainfall," said a dealer with a foreign commodities brokerage in Malaysia.

Outlook still dry for south Brazil, Argentina soy
BRASILIA, Dec 28 (Reuters) - Brazil's southernmost soy state Rio Grande do Sul will have little rain in the next fortnight, forecaster Somar said on Wednesday, putting the newly sown crop there at greater peril of losses while Argentina's soy regions also remain dry.Drought fears in South America have been a key driver behind a rise in Chicago soybean futures, which surged 3 percent to a six-week high on Tuesday. On Wednesday, January soybean futures  slid 7-3/4 cents to $11.92 a bushel by 9:33 a.m. CST (1533 GMT), hit by profit-taking.