Friday, January 6, 2012

20120106 1058 Global Market & Commodities Related News.

Asian Stocks Decline as Europe Concern Overshadows U.S. Data
Asian stocks (MXAP) dropped for a second day as higher borrowing costs in a French bond auction stoked concern Europe’s debt crisis is deepening, overshadowing improving economic data in the U.S. Sony Corp. (6758), a Japanese electronics maker that gets 21 percent of its sales from Europe, fell 2 percent. Elpida Memory Inc. (6665), a manufacturer of computer memory chips, sank 4 percent after Nomura Holdings Inc. cut its growth forecast for chips used to help computers juggle programs. Daewoo Shipbuilding & Marine Engineering Co. dropped 2.3 percent after the Korea Development Bank said it will revive plans to sell its stake in the South Korean shipyard.
“Europe is going to be a headwind with all the bond auctions coming up,” said Belinda Allen, a Sydney-based senior investment analyst at Colonial First State Global Asset Management, which oversees about $145 billion. “The first bond auctions from Germany and France did relatively OK, but there’s a risk Italy won’t perform as well. Markets are a lot more comfortable with the U.S. economy at this point in time. The outlook really hinges on Europe and China.”

GLOBAL MARKETS-Europe woes weigh on shares, euro; US helps curb loss
TOKYO, Jan 6 (Reuters) - Asian shares edged down and the euro hovered near a 16-month low against the dollar and an 11-year low against the yen on Friday on worries the euro zone debt crisis is crippling European banks, but more positive U.S.
data helped curb the losses.
"Euro area stresses remain elevated," said Standard Chartered in a research note. "Poor economic data, sovereign downgrades and weak demand for government bond issues remain key threats to the region."

COMMODITIES-Markets tumble after strong start to 2012
NEW YORK, Jan 5 (Reuters) - A surprise build in U.S. crude stockpiles pulled oil prices down sharply on Thursday while grains markets tumbled on euro zone worries and a resurgent dollar, casting a pall over commodities' strong start to the year.
"The dollar is going to continue to strengthen, Europe is in trouble. Those issues are going to come back to the forefront," said Robert Bresnahan, who runs grains trading advisory Trilateral Inc in Chicago.

Oil falls back on U.S. stock build, higher dollar, technicals
NEW YORK, Jan 5 (Reuters) - Brent crude dropped back drastically and U.S. crude deepened losses near the close on Thursday as investors took a second look at data showing a surprise build in U.S. stockpiles and the sharp rise in the dollar encouraged traders to jettison riskier assets.
"The late extension of losses reflect a delayed reaction to the EIA data (and) the dollar's gradually rise and the euro's slump also put pressure on crude futures," said Dominick Chirichella, senior partner at Energy Management Institute in New York.

NYMEX-Natural gas sinks 4 pct to below $3/mmBtu
NEW YORK, Jan 5 (Reuters) - U.S. natural gas futures slid nearly 4 percent on Thursday, pressured back below $3 per million British thermal units for the third time in four sessions amid concerns over bloated inventories and mild winter weather.
"With the recent cold spell breaking in major heating regions and warming back above normal, heating demand continues to be muted thus far seasonally. Couple that with brimming storage levels and natural gas prices continue to remain under pressure," said Caprock Risk Management president Chris Jarvis.

Euro Coal-Rises $1-2/t as buying picks up
LONDON, Jan 5 (Reuters) - South African physical prompt coal bids rose by around $1.00 a tonne percent on Thursday as buyers began to emerge after the end-year holiday hiatus.
"Drummond is seeing the worst delays of around two weeks, Prodeco almost as bad but even though Prodeco's coal is high-grade and some is specialist pulverised coal for steelmaking, it is important and it does matter to the market," one European utility source said.

20120106 1040 Malaysia Corporate Related News.

Genting Malaysia‟s indirect wholly-owned subsidiary, Genting New York LLC (“Genting NY”), has entered into a non-binding letter of intent dated 3 Jan 12 with the New York State Urban Development Corporation (doing business as Empire State Development Corporation), to consider the development of an integrated mixed-use complex on real property located adjacent to the Aqueduct Racetrack, Queens, New York, United States of America. The proposed Project is anticipated to cost at least US$4bn, which will include an integrated 3.8m sf of convention and exhibition centre with up to 3,000 hotel rooms and an expansion of Resorts World Casino New York City. (BMSB)

The sale of electricity from Malaysia to Singapore may come from a power plant built at Petronas’ refinery and petrochemical integrated development complex in Pengerang, Johor. Prime Minister Datuk Seri Najib Tun Razak said following talks in Putrajaya with his Singaporean counterpart Lee Hsien Loong that Malaysian companies were prepared to sell electricity to Singapore. The electricity deal could be a strategy by Petronas to grow is gas and power business after acquiring a 30% stake in GMR Energy Singapore Pte Ltd in late Sept 2011 for an undisclosed price as well as investments in the Kimanis and Lahad Datu power plants in Sabah. (Star Biz)

Datuk Seri Ong Tee Keat has backed Tony Pua‟s claim that Malaysia Airports (MAHB) did not inform the government that shifting KLIA2 to its current site would lead to higher construction costs. Ong, who was transport minister when MAHB first mooted the change, said he did not recall being told by the airport operator of the additional costs. MAHB has earlier denied withholding crucial information from government officials, stressing that the terminal was only shifted upon approval from all stakeholders. (Malaysian Insider)

Many aviation experts and travel agents on the east coast of the US say that Malaysia Airline’s (MAS) loss has become Emirates’ gain. The oblique reference is to the discontinuation since nearly four years of MAS‟ regular direct flight service between Newark airport in New Jersey. „After all, the east coast of the US is the world‟s most important and indeed prestigious route for airlines, many of which still fly despite low yields. „ Since MAS pulled out of Newark, other airlines have had a field day in tapping the lucrative South-East Asian market. Emirates is making an aggressive pitch for South-East Asia, particularly to Malaysia. It has become the first airline to operate a scheduled A380 service to Malaysia. (Bernama)

TL Offshore (TLO), a wholly-owned subsidiary of SapuraCrest Petroleum has finalised, executed and formalised two separate contracts with Cosco (Nantong) Shipyard Co. Ltd for the construction of two units of pipelay cum heavylift offshore construction vessels at a combined contract value of USD227m. Both parties have agreed that the contract be effective from 10 Sep 11. One of the Vessels is scheduled to be delivered in the 4Q13, whilst the other vessel is scheduled to be delivered in the 1Q14. (BMSB)

Malaysia's total industry volume (TIV) is expected to increase by 1.2% to 612,000 units this year from an estimated 605,000 units last year despite uncertain global economic outlook, limited new mass market models and concerns on loan approval. Frost & Sullivan partner & head of the automotive & transportation practice, Asia-Pacific, Kavan Mukhtyar, said TIV in 2012 would be driven by the C-segment (small family car) and D-segment (large family car) while hybrid would continue on a high-growth path amid the extended duty exemption. (Bernama, BT)

Frost & Sullivan expects vehicle sales in Malaysia to grow marginally to 612,000 units this year, due to the uncertainties in the global economy, limited new mass market model launches and concerns over loan approval rate. Growth will be mainly driven by C-segment vehicles (or small family cars) and D-segment vehicles (large family cars), as they are expected to grow by 3.8% and 23% respectively. Multi-purpose vehicles (MPV) and A-segment vehicles will get hit the most next year, as demand for the car is expected to fall by 10.1% and 9% respectively. "The A-segment will continue to shrink this year as there are only limited models offered and the increasing trend of first-time buyers opting straight for B- and C-segment models ... demand for MPV is also expected to decline, due to the lack of new MPV models in the market," said Frost & Sullivan. (BT)

Tenders for the beautification portion of the River of Life (RoL) programme, potentially worth up to RM1bn could be called in the second half of this year upon completion of the project‟s master plan. A total of RM4bn had been earmarked by the Federal government for the RoL programme. Aecom was chosen to work with the KL City Hall to produce the master plan after it won the RoL Masterplanning International Competition. (Financial Daily)

Cititel Hotel Management (CHM) Sdn Bhd, a subsidiary of IGB Corporation Bhd, will invest RM183m to build two more hotels in Penang. CHM's MD Datuk Eric H.K. Lim said the properties would be built at the Gat Lebuh Noordin area by early 2014.The two hotels are the four-star St Giles Hotel and a budget hotel - Cititel Express. The St Giles Hotel will have 500 rooms and the Cititel Express will have 275 rooms.Both these new hotels will be built adjoining each other at the site.(BT)

DBS Group Holdings said it was investigating complaints from customers of unauthorized withdrawal of funds in Malaysia, through the use of the bank‟s debit and ATM cards. It did not disclose the number of customers or the amount of funds withdrawn. (Reuters)

Eversendai Corp Bhd is bidding for jobs worth a total of RM12bn, which include both infrastructure and building of iconic projects worldwide. Group MD, Datuk A.K. Nathan, said the group expects to be successful in about 20% of these bids."But right now, our order book stands at about RM1.5bn and that are the amount of jobs we can get on the year-to-year basis. "For the bids, we will only know the success rate within the next two to three years, while some projects might be as long as five years," he said. Most of the bids were for the jobs in the Middle East, Southeast Asia and in the Commonwealth of Independent States. "We expect a minimum growth of 10% this year, but we always exceed that number," he said when asked about the company's outlook.Nathan said currently, 95% of Eversendai's earnings were derived from its overseas operations. "However, this year we will be very busy in Malaysia. We have just completed the Manjung power plant (in Perak) and have started on the KLIA 2 project.
This year, we are bidding for more projects in Malaysia." (BT)

Can-One told Bursa Malaysia Securities it was unaware of the reasons for the unusual market activity. Can-One surged 31 sen to close at RM1.37 with 6.95m shares done. Can-One said they were not aware of any rumour, report or other factors that may have caused the jump in its share price. There are also no unannounced material corporate development or on-going negotiations. (Financial Daily)

Navis Capital is keen to acquire HongPeng International Holdings Ltd‟s entire stakes in Xidelang Holdings (XDL). XDL is a shoemaker from China. XDL made an additional filing saying “there was no discussion on Navis Capital‟s offer price which is equivalent to 1.2x book value during the informal discussion.” (Bernama)

Boustead Heavy Industries Corp (BHIC) reiterated that it has not received any indication or direction from its shareholders with regards to any major acquisition of shares in the company. (Bernama)

TDM will invest RM300m this year to develop its plantation sector in Terengganu and Kalimantan. The company which owned 32,000ha of oil palm land in Terengganu had recently acquired 40,000ha in Kalimantan. (Bernama)

XiDeLang: Navis showed interest in 55% stake
Private equity investor Navis Capital has indicated its intention to buy out the 55% stake held by HongPeng International Holdings in XiDeLang Holdings, according to an announcement by XiDeLang. However, a source familiar with the matter said that while Navis did look at the possibility, the private equity firm was “pretty lukewarm” toward a possible investment in the China-based shoe and sports apparel company (StarBiz)

20120106 1039 Local & Global Economic Related News.

Malaysia and Singapore are examining the prospect of expanding the scope of the proposed Rapid Transit System (RTS) between Singapore and Johor Baharu to include underground road link between the two neighbours, PM Datuk Seri Najib Tun Razak said yesterday. A study has been commissioned for the most viable option for the project, targeted to be operational by 2018, Najib said. It will study the viability of water taxis to boost links, he noted. Malaysia has proposed selling electricity to Singapore, he said. (Bernama, BT)

Iskandar Malaysia (IM) recorded total cumulative committed investments of RM84.78bn in various sectors from its inception in 2006 till end of Dec 2011. Johor Menteri Besar Datuk Abdul Ghani Othman said that 45% of that cumulative committed investments had been realised. "Iskandar Malaysia is currently in Phase 2 of its Comprehensive Development Roadmap covering the period 2011 to 2015," he said adding that the RM15.3bn new investments which IM attracted last year represented 21% of the 2011-2015 target. The manufacturing sector in IM led the surge in total committed investments with RM31.22bn, followed by the property sector (RM27.3bn). (Bernama)

US planned firings rose 30.6% yoy to 41,785 in Dec (-12.8% in Nov), which were the fewest since Jun 2000, according to Chicago-based Challenger, Gray & Christmas Inc. Job cuts totaled 606,082 for all of 2011, up 14% from the previous year, the report showed. (Bloomberg)

For the first time since 1996, the components of the US leading economic indicator index (LEI) will change, according to the New York-based Conference Board. Gone will be the inflation-adjusted money supply, the Institute for Supply Management‟s supplier deliveries gauge, the Thomson Reuters/University of Michigan‟s measure of consumer expectations and the Commerce Department‟s orders for non-defense capital goods. Replacing the money supply will be the Conference Board‟s own Leading Credit Index, which aggregates measures of the yield curve, interest-rate swaps and the Federal Reserve‟s senior loan officer survey. The ISM‟s supplier deliveries gauge will give way to the group‟s index of new orders. Instead of using one measure of consumer confidence, the Conference Board will include an equally weighted average of the Michigan sentiment expectations reading and its own measure. Finally, the capital goods component will be replaced by the one that excludes commercial aircraft.
The changes respond to structural changes in the US economy and are aimed at making the LEI a better predictor of peaks and troughs in the business cycle, the Conference Board said. The new index will start with the Dec number coming out on 26 Jan and readings will be revised retroactively to 1990. (Bloomberg)

The US Institute for Supply Management‟s services index rose to 52.6 in Dec (52.0 in Nov), albeit at virtually the same level as at halfway through 2011, with companies reporting cautious gains in business. (AFP)

Initial jobless claims in the US fell 15,000 from the prior week‟s 387,000 to 372,000 in the week ending 31 Dec, the Labor Department reported. The four-week moving average accordingly fell to 373,250, a decline of 3,250 from the previous week. (AFP)

Private employers in the US added 325,000 jobs to their payrolls in Dec (204,000 in Nov), the ADP National Employment Report revealed. The median forecast was for a gain of 178,000 jobs. (Reuters)

US: Consumer comfort climbs to five-month high
Consumer confidence in the U.S. rose last week to the highest level in more than five months and the pace of firings declined, showing an improving job market is bolstering the biggest part of the economy. The Bloomberg Consumer Comfort Index climbed to minus 44.8 in the period ended 31 Dec, the best reading since mid-July, from minus 47.5 the prior week. A pickup in hiring will further lift Americans’ moods, raising the odds household spending, which accounts for about 70% of the economy, will keep climbing. (Bloomberg)

Japan‟s domestic sales of new cars, trucks and buses lost 15% in 2011 to 4.21m vehicles, mostly attributed to the widespread disruption to production wreaked by the earthquake and tsunami in Mar 11, according to the Japan Automobile Dealers Association and the Japan Mini Vehicles Association. (AFP)

China‟s trade surplus narrowed to about US$160bn in 2011 (US$183bn in 2010) due to evidently weaker demand from its key export markets like the US and Europe, according to Commerce Minister Chen Deming. Total trade volume, however, grew more than 20% to US$3.6tr in the year. (AFP)

Australia: Trade surplus in November unexpectedly narrows
Australia’s trade surplus unexpectedly narrowed in November as exports of resources slowed while aircraft imports increased. Exports exceeded imports by AUD1.38bn (USD1.43bn), from a revised AUD1.42bn surplus in October, the Bureau of Statistics said in a report yesterday The report showed stable demand for Australian exports that were outpaced by an increase in goods and services coming into the country. The Reserve Bank of Australia last month made its first back-to-back interest-rate cuts since 2009 as weaker commodity prices ease inflation pressure. (Bloomberg)

European industrial orders increased less than economists estimated of 1.8% mom in Oct (-7.8% in Sep), adding to signs of a deepening economic slump in the single-currency region. Economists had forecast orders to increase 2.5%. (Bloomberg)

UK banks expect to toughen the criteria on loans to companies and households in 1Q12 because of strains in wholesale funding markets, which may impede investment and economic growth, the Bank of England said in its fourth-quarter Credit Conditions Survey. “Developments in the euro area and their impact on banks‟ funding conditions would be a key determinant of credit availability over the coming quarter,” it said. (Bloomberg)

UK: Services surge may help Britain avoid a recession
Service industries in the UK grew at the fastest pace in five months in December and strengthened in the US, suggesting their economies are partly withstanding the euro-area debt crisis. A gauge of UK services activity based on the survey of purchasing managers rose to 54 from 52.1 in November, Markit Economics and the Chartered Institute of Purchasing and Supply said yesterday. The data suggest the UK economy strengthened in December after surveys earlier this week showed construction and manufacturing improved. Still, the euro-area crisis is clouding the outlook for the global recovery. (Bloomberg)

Bank Indonesia remains mindful of inflation even as it sees room to cut interest rates further if needed, Deputy Governor Hartadi Sarwono said. Gains in the rupiah are helping reduce imported price pressures and policy makers are “happy” with the trend of easing inflation, Sarwono said. The central bank‟s 2012 inflation target for prices to rise 3.5-5.5% will likely be met, he said. The next policy meeting is scheduled for 12 Jan. (Bloomberg)

The Philippine central bank may “unify and simplify” rules on banks’ reserve requirement this month, a change that will have a “neutral effect,” Governor Amando Tetangco said. The monetary authority may review its benchmark interest rate and banks‟ reserve requirement ratio on its 19 Jan policy meeting, Tetangco said. There‟s room for monetary easing and authorities do no see signs of a property bubble, he said. (Bloomberg)

Philippine inflation eased to an 11-month low of 4.2% yoy in Dec (4.8% in Nov) as gains in food and utility costs slowed, boosting scope for an interest-rate cut to aid economic growth. Economists had forecast for a 4.7% gain. (Bloomberg)

China will implement initiatives to drive domestic consumption in 2012 as the economy is buffeted by gathering external headwinds, according to Commerce Minister Chen Deming said. These efforts might be in the form of encouraging purchases of energy-saving products like cars and household appliances and the promotion of online shopping and tourism. (Bloomberg)

Reserve Bank of India deputy governor Subir Gokarn said the country‟s persistently high inflation may prevent an imminent reversal of record interest-rate increases, as the weakening rupee and the rebound in the price of oil narrow the scope for monetary easing. (Bloomberg)

20120106 1023 Global Market Related News.

Asian Stocks Decline on European Concern (Source: Bloomberg)
Asian stocks (MXAP) dropped for a second day as higher borrowing costs in a French bond auction stoked concern Europe’s debt crisis is deepening, overshadowing improving economic data in the U.S. Sony Corp. (6758), a Japanese electronics maker that gets 21 percent of its sales from Europe, fell 2 percent. Elpida Memory Inc. (6665), a manufacturer of computer memory chips, sank 4 percent after Nomura Holdings Inc. cut its growth forecast for chips used to help computers juggle programs. Daewoo Shipbuilding & Marine Engineering Co. dropped 2.3 percent after the Korea Development Bank said it will revive plans to sell its stake in the South Korean shipyard.
“Europe is going to be a headwind with all the bond auctions coming up,” said Belinda Allen, a Sydney-based senior investment analyst at Colonial First State Global Asset Management, which oversees about $145 billion. “The first bond auctions from Germany and France did relatively OK, but there’s a risk Italy won’t perform as well. Markets are a lot more comfortable with the U.S. economy at this point in time. The outlook really hinges on Europe and China.”

Most U.S. Stocks Advance on Employment Reports, Rally Among Financials (Source: Bloomberg)
Most U.S. stocks rose, sending the Standard & Poor’s 500 Index (BKX) higher for a third day, as a rally by banks and improving jobs data offset reduced profit forecasts at companies including Target (TGT) Corp. and J.C. Penney Co. Citigroup Inc. (C) and JPMorgan Chase & Co. (JPM) rallied at least 1.2 percent after Deutsche Bank AG saw “encouraging signs” for the industry’s fourth-quarter earnings. Bank of America Corp. (BAC) soared 8.6 percent amid speculation that the Obama administration may introduce a nationwide loan refinancing program. Target and J.C. Penney lost more than 2.6 percent. Chevron Corp. (CVX) slipped 1 percent as oil prices tumbled. About three shares rose for every two that fell on U.S. exchanges as of 4 p.m. New York time. The S&P 500 climbed 0.3 percent to 1,281.06, after tumbling as much as 0.9 percent earlier. The Dow Jones Industrial Average (INDU) dropped 2.72 points, or less than 0.1 percent, to 12,415.70 today.

Japan Alternative Exchanges Have Best Year (Source: Bloomberg)
Japan’s alternative equity markets won more business than ever from the Tokyo Stock Exchange as investment funds sought better prices and places to buy and sell when traditional channels failed. Markets including SBI Japannext and Chi-X Japan as well as dark pools, or venues that don’t display prices, handled 7.8 percent of the volume in Topix Index (TPX) stocks last year, up from 6 percent in 2010, data compiled by Bloomberg show. That’s the biggest annual increase and the most market share since such platforms were introduced in 2007, the data show. The venues, known as proprietary trading systems, handled more volume in Tokyo Electric Power Co. (9501), Canon Inc. and Olympus Corp. than the Tokyo Stock Exchange on some days, the first time that’s ever happened, because of stock halts and price differences across venues, data compiled by Bloomberg show. The Nikkei Stock Average Volatility Index posted its biggest two-day gain in March after the nation’s largest earthquake and tsunami.

European Stocks Slide on Bank Capital Raising Concern; UniCredit Tumbles (Source: Bloomberg)
European stocks (SXXP) declined for a second day as concern that the region’s banks will have to raise capital overshadowed a report showing that U.S. companies added more workers to their payrolls than economists had predicted. UniCredit SpA, which announced a rights offer at a 43 percent discount yesterday, slumped to a 19-year low. Societe Generale SA dropped 5.4 percent after announcing it will cut corporate- and investment-banking staff. The Stoxx Europe 600 Index fell 0.9 percent to 247.39 at the close in London. The gauge lost 11 percent last year as policy makers struggled to contain the euro area’s debt crisis.

Japanese Stocks Decline as Euro Weakens Amid Debt Crisis Concern (Source: Bloomberg)
Japanese stocks (TPX) declined for a second day as the euro fell to an 11-year low against the yen, clouding the earnings outlook for exporters and outweighing better-than- expected U.S. employment data. Sony Corp. (6758), which gets about 20 percent of its sales in Europe, slid 1.3 percent after higher borrowing costs in a French bond auction added to concern the debt crisis is deepening. Olympus Corp. (7733), the camera maker mired in an accounting scandal, slumped 4 percent after former Chief Executive Officer Michael Woodford said he won’t battle for control of the company. Fast Retailing Co. rose 1.4 percent after the clothier’s sales jumped. The Nikkei 225 (NKY) slipped 0.4 percent to 8,451.41 as of 9:32 a.m. in Tokyo. The broader Topix fell 0.5 percent to 732.54, heading for a weekly gain of 0.5 percent.

Consumer Comfort Climbs to Five-Month High (Source: Bloomberg)
Consumer confidence in the U.S. rose last week to the highest level in more than five months and the pace of firings declined, showing an improving job market is bolstering the biggest part of the economy. The Bloomberg Consumer Comfort Index (COMFCOMF) climbed to minus 44.8 in the period ended Dec. 31, the best reading since mid-July, from minus 47.5 the prior week. Applications for jobless benefits (INJCJC) decreased by 15,000 during the same time to 372,000, according to Labor Department figures. A pickup in hiring will further lift Americans’ moods, raising the odds household spending, which accounts for about 70 percent of the economy, will keep climbing. A Labor Department report tomorrow may show employers added more workers to payrolls in December, brightening the outlook for growth this year.

Companies Add 325,000 to Payrolls in December (Source: Bloomberg)
Companies added more workers than forecast in December, a sign that the U.S. labor market was gaining momentum heading into 2012, according to a private report based on payrolls. The 325,000 increase was the highest in records going back to 2001 and exceeded the highest projection in a Bloomberg News survey after a revised 204,000 gain the prior month, the report from the Roseland, New Jersey-based ADP Employer Services showed today. The median estimate called for an advance of 178,000. An acceleration in hiring may spur further gains in consumer spending, which accounts for about 70 percent of the world’s largest economy. A Labor Department report tomorrow may show payrolls rose by 150,000, not enough to keep the unemployment rate (USURTOT) from rising to 8.7 percent, economists in a Bloomberg survey projected.

U.S. Service Economy Expands as ISM’s December Index Rises to 52.6 From 52 (Source: Bloomberg)
Service industries in the U.S. expanded less than forecast in December, indicating improvement in the economy will be uneven. The Institute for Supply Management’s index (NAPMNMI) of non- manufacturing industries, which account for almost 90 percent of the economy, rose to 52.6 last month from 52 in November, the Tempe, Arizona-based group said today. The median forecast of economists surveyed by Bloomberg News called for an increase to 53. Fifty is the dividing line between expansion and contraction. Slow wage growth, limited job gains and depressed real estate values may make it tougher for Americans to boost their spending after the holiday shopping season. The figures stand in contrast to recent data showing declining claims for jobless benefits and the strongest pace of manufacturing in six months.

Alcoa Earnings Estimates Plunge After Aluminum Drop: Commodities (Source: Bloomberg)
Alcoa Inc. (AA) earnings estimates have plunged the most in three years as analysts’ expectations mount that the biggest U.S. aluminum producer may even record a fourth-quarter loss. Net income will tumble 96 percent to 1 cent a share from 21 cents a year earlier, according to the average of 18 analysts’ estimates compiled by Bloomberg. That’s 88 percent less than the average projection from a month ago. Nine of the 12 estimates (AA) compiled within the last 28 days are for New York-based Alcoa to post a loss in the fourth quarter. The average price of aluminum was 11 percent lower in the quarter from a year earlier after global growth decelerated amid a sovereign-debt crisis in Europe and government action to control inflation in China. Supply is exceeding demand and inventories have soared, leaving some smelters unprofitable at current metal prices. Alcoa said today it would close 12 percent of its smelting capacity amid falling prices.

Jobless Claims Drop by 15,000 Last Week (Source: Bloomberg)
Fewer Americans filed claims for unemployment insurance payments last week, showing the labor market is starting 2012 on better footing than a year earlier. Applications for jobless benefits (INJCJC) decreased 15,000 in the week ended Dec. 31 to 372,000, Labor Department figures showed today. The median estimate of 38 economists in a Bloomberg News survey forecast 375,000 claims. The average over the past four weeks declined to the lowest level in more than three years. The decrease in firings indicates employers may be getting more comfortable with their headcounts and their economic outlooks as the year begins. Economists forecast a Labor Department report tomorrow will show hiring picked up and joblessness held below 9 percent in December.

Job Cuts in U.S. Jumped 31% From Prior Year’s Decade Low, Challenger Says (Source: Bloomberg)
Job cuts announced by U.S. employers increased in December from the prior year’s decade low. Planned firings (CHALTOTL) rose 31 percent to 41,785 last month from 32,004 in December 2010, which were the fewest since June 2000, according to Chicago-based Challenger, Gray & Christmas Inc. Job cuts totaled 606,082 for all of 2011, up 14 percent from the previous year, the report showed. Government and financial services accounted for four of every 10 announcements last year, and the areas will probably struggle this year as federal agencies try to reduce budget deficits and the European debt crisis threatens to cut off credit, the report said. At the same time, the year’s total was less than half the recession peak of 1.29 million firings announced in 2009.

Fed Study Says Greater Mortgage-Agency Losses May Aid U.S. Housing Revival (Source: Bloomberg)
A report from Federal Reserve Chairman Ben S. Bernanke called the weakness in the housing market a “significant barrier” to U.S. economic health and said Fannie Mae (FNMA) and Freddie Mac might have to bear greater losses to stoke a broader recovery. The study, delivered today to leaders of the Senate Banking and House Financial Services committees, noted “tension” between aiding the economy and minimizing losses of the failed government-sponsored enterprises, which depend on taxpayer aid for survival. “Some actions that cause greater losses to be sustained by the GSEs in the near term might be in the interest of taxpayers to pursue if those actions result in a quicker and more vigorous economic recovery,” according to the study.

Bullard Says Fed ‘Very Close’ to Consensus on Inflation Target: Tom Keene (Source: Bloomberg)
Federal Reserve Bank of St. Louis President James Bullard said that policy makers at the central bank may be nearing consensus about clearly stating their goals for the rate of inflation. “I think we’re very close to having inflation targeting in the U.S.,” Bullard said in a Bloomberg Radio interview today. “This may be the opportunity to get something done that everyone on the committee can rally around.” “I think it would come in the form of some kind of statement from the committee that would name a target but would also reiterate some of the things we’ve said over the years about how keeping inflation low and stable contributes to great economic performance overall,” Bullard said, referring to the policy-setting Federal Open Market Committee.

China Seeks to Boost Consumption, Chen Says (Source: Bloomberg)
China will roll out measures to boost consumption this year as it strives to meet challenges posed by a global slowdown, Commerce Minister Chen Deming said. The government is studying policies to encourage spending on energy-saving products, and will take other measures including the promotion of online shopping and tourism, Chen told the ministry’s annual works conference, according to a statement posted on its website yesterday. Policy makers have cut taxes to spur consumption and help sustain growth in the world’s second-largest economy as Europe’s debt crisis clouds the outlook for exports and a property crackdown damps investment at home. Premier Wen Jiabao said Jan. 3 that business conditions may be “relatively difficult” this quarter.

Germany Is Biggest Obstacle to Raising Emergency Fund, Klaas Knot Says (Source: Bloomberg)
European Central Bank Governing Council member Klaas Knot said Germany should support raising the European emergency fund to help end the region’s debt crisis. “The most important obstacle lies in Germany, not in the Netherlands,” Knot said in an interview on Dutch public television last night. “I think that more money is needed and we will use the time to convince our German colleagues.” German Chancellor Angela Merkel has resisted calls to ratchet up bailout funding amid warnings that the current amount isn’t enough to safeguard nations such as Italy and Spain. Germany has instead focused on budget discipline as the best means to stem the crisis now in its third year.

U.K. Services Expanded at Fastest Pace in Five Months in December: Economy (Source: Bloomberg)
Service industries in the U.K. grew at the fastest pace in five months in December and strengthened in the U.S., suggesting their economies are partly withstanding the euro-area debt crisis. A gauge of U.K. services activity based on the survey of purchasing managers (PMITSUK) rose to 54 from 52.1 in November, Markit Economics and the Chartered Institute of Purchasing and Supply said today in London. A U.S. services index rose to 52.6 in December from 52 the previous month. The data suggest the U.K. economy strengthened in December after surveys earlier this week showed construction and manufacturing improved. Still, the euro-area crisis is clouding the outlook for the global recovery. The Bank of England said today banks may toughen loan terms because of the debt turmoil, hampering growth, while some Federal Reserve officials have said prospective economic conditions may warrant “additional policy accommodation.”

Euro Drops on Crisis Concern; Dollar Gains on U.S. Job Growth (Source: Bloomberg)
The euro fell to an 11-year low against the yen and the weakest level in 15 months versus the dollar on concern Europe’s debt crisis is worsening and as reports showed the U.S. labor market is strengthening. The 17-nation currency weakened against most major peers after France’s borrowing costs rose at a bond sale today as credit-rating companies threaten to cut the nation’s top AAA ranking. Sterling strengthened to a 15-month high versus the euro. The Australian and New Zealand dollars dropped against the greenback for a second day as investors sought safer assets. “Europe trumps better U.S. data right now,” said Boris Schlossberg, director of research at the online currency trader GFT Forex in New York. “The market is very concerned about the sovereign debt and also the bank debt on the European side. Sentiment is very dour.”

Soros Says Fracture of Euro Area Would Have ‘Catastrophic’ Consequences  (Source: Bloomberg)
Billionaire investor George Soros said a fracturing of the euro area would have “catastrophic” consequences and that markets have started pricing in the possibility of the region breaking up. The disintegration of the 17-nation currency bloc would affect Europe and the “entire global financial system,” Soros said in the southern Indian city of Hyderabad today in response to questions. Leaders in the euro region have struggled to solve a sovereign-debt crisis that’s hampered the global recovery and is now in its third year. Greece, Ireland and Portugal have already been forced into bailouts and the European Central Bank has provided unprecedented cash injections, easing borrowing costs for Italy, Spain and Belgium.

20120106 1022 Global Commodities Related News.

Rich to Invest More in Commodities, Reduce Cash (Source: Bloomberg)
Wealthy investors plan to increase their allocations to commodities and private companies while decreasing their cash holdings this year, according to a survey released today. About 48 percent of respondents said they plan to add to commodities investments during 2012 and 55 percent said they intend to make more direct investments in private companies, according to a survey by the Institute for Private Investors. About 45 percent plan to increase real-estate holdings, said IPI’s survey of its members, who are families with at least $30 million in investable assets. “It’s part of that whole movement toward actually owning real assets,” Mindy Rosenthal, executive director of IPI, said in a telephone interview. “They’re looking at going back to the old school way of making money.”

Corn (Source: CME)
US corn futures stumble Thursday, ending lower on an improved Argentina weather forecast that eased concerns about the crop there. The market backtracked largely on the forecast calling for rains next week, traders say, though they add that a stronger dollar also factored in widespread losses in the grains. Traders also took profits after the market jumped more than 10% since mid-December. Demand questions remain, traders add. "Let's not lose sight of the fact that escalation in corn prices has turned beef cattle margins negative," says Joel Karlin, Western Milling analyst. He also notes ethanol margins are deep in the red, a situation exacerbated by the end of the blenders' tax credit. CBOT March corn ends down 15c, or 2.3%, to $6.43 1/2 a bushel.

Wheat (Source: CME)
US wheat futures end sharply lower on pressure from corn and a stronger dollar. The currency's surge against the euro weighed on grains generally and wheat specifically. "US wheat export prospects aren't good, and the cheaper euro makes them even worse," says RCM Asset Management's Doug Bergman. Meanwhile, corn's retreat amid a better outlook for Argentina's crop added to the pressure since it and wheat have been moving in tandem recently. Traders add the market was poised for some profit-taking after sharp recent gains. CBOT March wheat ends down 3.2% at $6.29 1/4 while MGEX March slides 2.4% to $8.18 1/2 and KCBT March tumbles 3.9% to $6.86.

Rice (Source: CME)
US rice futures end lower amid widespread losses in grains on a stronger US dollar. The market continues to pull back from one-month highs set Tuesday, as demand is weak. Stronger USD weighs on grains generally and an improved weather outlook for Argentina weighed on corn, adding to the negative tone. Some traders say the market will need to climb in order to convince farmers to plant more acres. CBOT Jan rice ends down 9c to $14.32 a hundredweight.

Wheat falls for 2nd day on risk aversion; soy steady
SINGAPORE, Jan 5 (Reuters) - Chicago wheat slid for a second straight session, weighed down by Europe's debt woes and the improved condition of the U.S. winter crop.
"It is Argentine weather playing out and this could remain as the main fundamental factor for price direction," said Lynette Tan, analyst with Phillip Futures in Singapore. "We are more bearish on wheat because of the poor fundamentals."

Zambia maize crop off to poor start-farm minister
LUSAKA, Jan 5 (Reuters) - Erratic rainfall has delayed planting of Zambia's staple maize crop that feeds the impoverished southern African nation, raising the specter of a poor harvest after several bumper seasons, the agriculture minister said on Thursday.
"The beginning has not been good. Although it's too early to tell how things will unfold we are very concerned. The rainfall pattern has been very patchy," Agriculture Minister Emmanuel Chenda told Reuters.

Indonesia targets zero rice imports in 2012 -Bulog
JAKARTA, Jan 5 (Reuters) - Indonesia will not import rice in 2012 and instead maintain high stock levels by buying 4 million tonnes of the staple grain from domestic sellers, state procurement agency Bulog said.
Southeast Asia's biggest economy and the world's third-largest rice grower, issued permits to import 1.9 million tonnes of rice last year, from Vietnam, Thailand and India.

La Nina, low stocks trigger corn, soy volatility
OXFORD, England, Jan 4 (Reuters) - Global corn and soybean stocks remain low, leaving both commodities vulnerable to the threat posed by the La Nina weather phenomenon to production in Argentina and southern Brazil, U.S. Department of Agriculture chief economist Joseph Glauber said on Wednesday.
"Stocks levels for both those commodities are still quite low. There is a lot of volatility because of that and I think that the markets are reflecting that uncertainty right now," he told Reuters in an interview.

Vietnam sees coffee, rice exports down in 2012, oil up -report
HANOI, Jan 5 (Reuters) - Vietnam plans to export 1.2 million tonnes, or 20 million bags, of coffee this year, down 4 percent from the amount shipped in 2011 but above a previous forecast of 1.1 million tonnes, a state-run newspaper reported on Thursday.
Annual rice exports were seen reaching 7 million tonnes this year, after Vietnam exported a record 7.1 million tonnes in 2011, according to the Cong Thuong (Industry and Trade) newspaper which cited annual targets from the Industry and Trade Ministry.

Morocco grain strong despite planting delay-attache
Jan 4 - Following are selected highlights from a report issued by a U.S. Department of Agriculture attache in Morocco:
"The 2011/12 grain planting season in Morocco had a late start, with the first significant rainfalls arriving the week of October 24. Despite the delay of planting, agricultural experts remain hopeful for a good grain harvest. The official estimates for the 2010/2011 grain production were revised slightly down, with soft wheat production at 4.17 million tonnes, durum wheat at 1.85 million tonnes and barley at 2.34 million tonnes.

Argentine crop weather seen dry and hot all week
BUENOS AIRES, Jan 4 (Reuters) - Argentina will stay hot and dry for the rest of the week, meteorologists said Wednesday, adding to worries that have boosted soy and corn futures in Chicago and led some forecasters to trim the South American country's 2011/12 crop production prospects.
The National Meteorology Service ( said it expected no major rains in Argentina's soy or corn areas during the day. Some scattered showers, however, were likely in southeastern Buenos Aires province.

Yellow Rust Disease Attacks India Wheat Crop In Two Small Pockets - Official (Source: CME)
The yellow rust fungal disease has struck India's wheat crop in two pockets of the breadbasket northern region, but the disease outbreak has been contained early and is unlikely to hit total output, a senior government official said. Farmers have been advised to monitor their crops closely and frequently as the disease is airborne and, if left unchecked, has the potential to spread quickly from a small area. Wheat is the most important winter-sown grain staple in India. India is betting on a repeat of last year's record wheat crop of around 86 million tons this year to shore up government stocks, pivotal to the rollout of a nationwide food security program expected this year. "Stripe or yellow rust [disease] has started appearing [on the wheat crop] in Una district of Himachal Pradesh and Ropar district of Punjab. Farmers have been advised to visit the crop frequently to spray fungicide," Indu Sharma, director of the Directorate of Wheat Research, told Dow Jones Newswires.
"We have come to know very quickly. I don't think there will be any [significant] losses due to the disease," she said. While weather conditions are largely favorable due to cold weather over key growing regions in northern India, government officials are working overtime to make sure farmers don't underplay the disease threat. "We have also advised farmers not to sow susceptible varieties," she added. Sowing of wheat this season has already begun and picked up since mid-November. It is expected to finish by the middle of January. The disease has manifested in those farmers' crops who ignored scientists' advice of a 20-day gap from the previous crop and started sowing at the end of October, Sharma said. Harvest of the crop usually begins in end-March or early April. The total area under wheat crop so far is about 0.1 million hectares less than the same period a year ago.
So far, the crop is in good shape though foggy conditions in the northern states of Haryana and Punjab have reduced availability of light that is important for the plant's nourishment. However, Sharma said that foggy weather affects the crop only if it prolongs for 20-25 days. "By and large, we can't say there will be any negative impact on the crop because of the fog," she added.

Higher Acreage May Cap Corn Prices If Weather Supportive -Credit Suisse (Source: CME)
Global corn prices will likely move sideways or lower over the next few months, but a supply disruption due to adverse weather could spark another rally, a senior Credit Suisse executive said. Growers in countries including the No. 1 producer, the U.S., responded to sharply higher corn prices in June by switching to corn from soybeans, which are direct substitutes for each other, Ric Deverell, Credit Suisse's head of global commodities research, told a conference. The near-month corn futures contract on the Chicago Board of Trade reached a record of almost $8 a bushel in June, and has swung as low as $6/bushel in the half year since. It settled at $6.585/bushel Wednesday. Deverell said higher production can keep prices in check for the time being, but overall fundamentals are strong because the global corn supply situation is about as tight as it has been in the past four decades. Last year, corn acreage expanded in the U.S., the world's biggest exporter, but production still fell due to adverse weather.
The  country normally accounts for more than half of the global corn trade, but it is likely to slump this year, with inventories at the end of August forecast to fall to 21.6 million metric tons from 28.7 million tons a year earlier. Close to 40% of U.S. corn output is used to produce ethanol, which constrains exports, Deverell said. With crude oil above $100 a barrel and given government incentives, it is still economical to blend gasoline with ethanol, he added. However, global corn trade growth may also be slow if China's plans to boost output and minimize imports by shifting land from soybeans succeed, Deverell said. In April 2009, China became a major corn importer for the first time in almost 15 years, and traders have said that it may have purchased close to 4.0 million tons of U.S. corn between March and September last year. Deverell said weather will continue to be a crucial factor in determining corn prices, which may rise further if the current spell of dry weather in South America is prolonged.
The impact of dryness in Brazil and Argentina on size of the upcoming corn harvest isn't fully clear to date, but a drought could reduce output and push up prices again. Argentina is world's second-largest corn exporter. It shipped out 15.4 million tons in the marketing year ended June 30, 2011, up 19% from 2009-10, according to the International Grains Council.

Ukraine Winter Grains Could Rise 40% If Better Sited-Meteorologist (Source: CME)
Ukraine's winter grain production could be increased by up to 40% through careful choices over sowing areas for wheat, according to a meteorology expert, as the country continues to struggle with adverse weather conditions. Nikolai Kulbida, head of the Hydrometeorological Center of Ukraine, said the optimum placement of crops could increase harvested volumes by 20% to 40%, even without technology changes, after recent drought caused a deterioration in planting and growing conditions. However, Kulbida conceded that permanently higher temperatures would mean the country will face a significant increase in droughts and worsening conditions for agricultural production in future, the Ukrainian Grain Association said Thursday. Risk manager Agritel said the Ukrainian government has reaffirmed its plans to increase inventories in anticipation of potentially significant winter losses, with cereal production in 2012-13 estimated at 56.4 million metric tons, of which 22.4 million tons are winter wheat.
It added that no change in the weather is anticipated in coming days and it should remain wet and unusually warm for the season. Another risk manager Offre & Demande Agricole said farmers in Ukraine and across the Black Sea region will be hoping that conditions remain warm to help winter crops recover their normal development rates. It added that current precipitation levels are allowing soil water content to return to normal levels after a dry autumn.

Corn Seed Shortage Sows Farm Belt Woes (Source: CME)
As farmers across the U.S. prepare to plant this year's corn crop, they are running up against an unexpected obstacle: a lack of seed. By some estimates, U.S. production of corn seed was down 25% to 50% ahead of this planting season. Output of corn seed, which is grown from specialized plants, was sliced by drought conditions across the Midwest and the Great Plains last year. The shortage of seed threatens to scuttle what some expect to be the biggest planting of corn in the U.S., the world's largest producer, since World War II. Early forecasts have been calling for up to 95 million acres to be sown with corn this spring, a 3.4% increase from 2011. The problem could mean the second year in a row of tumult for the corn market. Last year, hot weather led to a smaller U.S. crop than traders had expected, fueling a historic rally in corn prices to a record $8 a bushel in late spring.
Corn prices slumped in the second half as the fall harvest replenished supplies. But in the past three weeks, corn futures prices have been on the rise, jumping 14% in the past three weeks. While much of that has been on the back of fears of lower-than-expected production in South America because of drought, the prospect of falling corn seed could propel prices even further, said Jason Britt, president of Central States Commodities, a Kansas City, Mo., brokerage. March corn futures trade around $6.50 a bushel at the Chicago Board of Trade. A disappointing crop could renew talk of corn reaching as much as $9 or $10 a bushel, Mr. Britt said. "The implications of having a crop like we had this year would be pretty extreme," Mr. Britt said. Traders are "going to have to question if that crop we're planting is starting off on the right foot." Monsanto Co. and other large seed companies remain sanguine about supplies.
Pioneer Hi-Bred, the seed subsidiary of DuPont Co., said farmers in some cases won't get their first choice of seed, but noted that this happens every year. The company doesn't expect major disruptions from tight supplies, said Terry Gardner, Pioneer's director of marketing and sales effectiveness. "We're in an excellent position as far as having an adequate supply of seed," Mr. Gardner said. Monsanto, the world's largest seed supplier by volume, is expected to provide an update on supplies when it reports quarterly earnings Thursday. A company spokeswoman declined to comment ahead of the report, but pointed to a November investor presentation in which an executive voiced confidence in supplies.
The shortage of corn seed is most acute in the northern Great Plains, an area that is becoming important as farmers try to keep pace with global demand. Already, it is clear farmers in North Dakota won't be able to plant as much corn as they would like, said Tom Lilja, executive director of the North Dakota Corn Growers Association. Given enough seed, farmers likely would have planted close to three million acres, he said, but the shortage will keep plantings closer to 2.5 million. Farmers in North Dakota planted 2.25 million acres last year. Further south in the heart of the corn belt, dealers said there aren't enough top-quality seeds, which are rated by how much corn they yield, to go around. "I really don't know that I've ever seen it quite this tight," said Skip Long, product manager for Merschman Seeds in West Point, Iowa. Mr. Long estimates U.S. seed corn production fell 40% to 45% in 2011.
Yield is a measurement of the number of bushels produced per acre, and lower yields result in smaller harvests. Yields often are volatile year to year, with last fall's crop averaging 146.7 bushels an acre, a 4% decline from the previous year. Corn seeds are kernels from a cob. Seed companies have bred and modified the plants genetically in a process that has resulted in hardier plants. Seed suppliers said they plan to turn to imports of seed from South America to make up for the weak U.S. seed crop. But turning to countries such as Chile and Argentina has its own risks. The drought conditions in South America that have hurt corn production also are imperiling the corn-seed crop. Moreover, a late harvest in South America or early planting season in North America could leave companies scrambling to get the seeds shipped, processed and into farmers' hands in time.

Sugar Drops Most Since September on Brazil Outlook; Coffee, Cocoa Falls (Source: Bloomberg)
Sugar fell the most since September as weather conditions improved for Brazil’s cane crop, the world’s largest, and a stronger dollar curbed the appeal of commodities as investments. Coffee and cocoa dropped. Brazil’s Center South, the world’s top sugar-producing region, will get rains in the next 10 days, easing concern that an earlier dry spell would erode yields from this year’s harvest, weather forecaster Somar Meteorologia said today. There are “some forecasts for rains in southern Brazil that could be beneficial,” Jack Scoville, a vice president for Price Futures Group in Chicago, said in an e-mail. Raw sugar for March delivery plunged 5.3 percent to settle at 23.13 cents a pound at 2 p.m. on ICE Futures in New York, the biggest decline since Sept. 16. The sweetener sank 27 percent in 2011 as crops expanded in Asia and Europe.

Sugar consolidates, robustas dip on crop pressure
LONDON, Jan 5 (Reuters) - ICE sugar consolidated in early trade on Thursday as prices adjusted to Tuesday's rally, while robusta coffee dipped holding above a 9-week low on crop pressure, and cocoa eased in thin volume.
ICE benchmark raw sugar futures  edged down 0.08 cent or 0.3 percent to 24.34 cents a lb in choppy dealings at 0931 GMT, below a seven-week peak of 24.65 cents per lb touched on Wednesday.

Ghana cocoa purchases up
ACCRA, Jan 4 (Reuters) - Ghana's official cocoa purchases are running 9 percent over last year, according to figures from state regulator Cocobod, but recent transport delays have triggered congestion at the West African nation's warehouses.
Purchases reached 518,531 tonnes by Dec. 22 since the start of the season on Oct. 14 in the world's No. 2 grower, according to Cocobod data seen by Reuters on Wednesday, with some 37,019 tonnes registered in the most recent week.

Cameroon cocoa exports reach 106,347 T by end-Nov
YAOUNDE, Jan 4 (Reuters) - Cameroon exported 41,410 tonnes of cocoa beans in the month of November 2011, bringing the total for the season so far to 106,347 tonnes, according to statistics from the National Cocoa and Coffee Board (NCCB) released on Wednesday.
That is a slight drop from 109,045 tonnes exported by the same time last season.

India Oct-Dec coffee export down 10 pct
MUMBAI, Jan 4 (Reuters) - Coffee exports from India fell 10.07 percent to 58,115 tonnes in the first three months of the coffee year which ends in September 2012, according to information available on the state-run Coffee Board's website.
In value terms, exports were at $174.14 million from October to December, up from $153.35 million for the same period last year.

China to ease up on rubber imports ahead of wintering
MUMBAI, Jan 5 (Reuters) - China, the world's biggest importer of natural rubber, is unlikely to buy in bulk ahead of the lower-supply wintering  months as it has enough stocks at home, a senior economist of the ANRPC grouping of rubber-producing nations, said.
China usually buys big going into the Lunar New Year holidays and ahead of wintering, when supplies dwindle and prices move higher.  

Monsanto sees drop in 2012 US cotton planting
ORLANDO, Jan 4 (Reuters) - - American cotton plantings in 2012 are seen falling 15 percent to around 12.5 million acres although the final figure will depend a great deal on prices of cotton and rival grains, as well as the vagaries of weather, a top official of lifesciences firm Monsanto  said.
"Cotton acres are going to be down," David Rhylander, the marketing lead for Monsanto's wholly owned cotton seed firm Deltapine, told Reuters in an interview late on Tuesday at the start of the annual Beltwide cotton conference here.

Brent rises near $114 as Iran offsets EU crisis
SINGAPORE, Jan 5 (Reuters) - Brent crude rose toward $114 a barrel as fears of an Iranian supply disruption mounted after the European Union agreed to cut off oil imports from the No. 2 OPEC producer, offsetting jitters over the euro zone crisis.
"It's a knee-jerk reaction as more countries are leaning to comply with the sanctions," said Ryoma Furumi, a commodity sales manager at Newedge Japan.

Qatar keeps Feb crude supply to Asia steady -source
TOKYO, Jan 5 (Reuters) - Qatar, one of OPEC's smallest producers, has notified at least one Asian buyer that it will supply Marine and Land crude at full contracted volumes for February, unchanged from January levels, a trade source said on Thursday.
Qatar gave buyers the option of asking for cargoes to be 5 percent more or less than contracted volumes, the same as the previous month, the source added.

Oil Declines a Second Day as U.S. Stockpiles, Europe Counter Iran Threat (Source: Bloomberg)
Oil fell for a second day, trimming a weekly gain, as investors speculated that increasing U.S. crude stockpiles and signs that Europe’s sovereign debt crisis will worsen indicate fuel demand may falter. Futures slid as much as 0.5 percent in New York after Energy Department data showed crude supplies climbed 2.2 million barrels (DOESCRUD) last week, compared with a forecast for a 1 million barrel decline in a Bloomberg News survey. Borrowing costs in France rose in the country’s first bond auction of the year and Hungary’s one-year bill yield climbed to the highest since 2009. Oil has gained 2.7 percent this week on concern that sanctions against Iran will curb supplies. Crude for February delivery slid as much as 50 cents to $101.31 a barrel in electronic trading on the New York Mercantile Exchange. It was at $101.50 at 10:38 a.m. Sydney time. The contract yesterday fell 1.4 percent to $101.81, the lowest close since Dec. 30. Prices gained 8.2 percent in 2011.

Copper Declines as Deepening European Woes Erode Demand Outlook for Metal (Source: Bloomberg)
Copper fell for the second straight day on concern that Europe’s debt crisis is deepening, eroding prospects for the economy and metal demand. European industrial orders rose less than forecast in October from the previous month, regional statistics showed. The euro (EURUSD) dropped to the lowest in almost 16 months against the dollar after French borrowing costs rose at a bond sale. “We are experiencing more euro-sourced angst, pressuring metals and energy in the process,” Edward Meir, an analyst at INTL FCStone Inc. in New York, said in a report.

Gold Traders Most Bullish in Month After Bear Market Averted: Commodities (Source: Bloomberg)
Gold traders are the most bullish in a month as Europe’s deepening debt crisis and increasing tensions over Iran drove the metal to its longest winning streak since October. Ten of 22 surveyed by Bloomberg expect the metal to gain next week and five were neutral, the highest proportion since Dec. 9. The U.S. Mint sold 45,500 ounces of American Eagle gold coins this month, compared with 65,500 ounces in the whole of December and 41,000 in November, data on its website showed. Britain and France will press the European Union to stop Iranian crude imports at a Jan. 30 meeting, in response to the country’s nuclear program. Iran is threatening to retaliate by blocking the Strait of Hormuz, a key chokepoint for global oil supplies. Greek Prime Minister Lucas Papademos warned his nation may face economic collapse as soon as March. Investors are holding (.GLDTONS) a near-record amount of gold through exchange-traded products after the metal rose for an 11th consecutive year.

20120106 1022 Soy Oil & Palm Oil Related News.

Soybeans (Source: CME)
US soybean futures fell sharply, fueled by speculative selling triggered by strength in the US dollar index and forecasts calling for improved chances of rain for South American soybean crops next week. USD index is higher on continued concern about the European banking system, and improving economic data. Better rain chances for South American crops added pressure, as traders trimmed weather premium built into prices during the market's three-week rally on Argentina dryness, analysts say. CBOT March soybeans dropped 21c or 1.7% to $12.09 a bushel.

Soybean Meal/Oil (Source: CME)
Soy product futures slumped in unison with soybeans, stumbling on broader-based weakness across asset classes. Strength in the US dollar vs the euro produced widespread selling in dollar-denominated commodities, with additional weakness derived from improved weather potential for South American soy crops, analysts say. CBOT March soymeal ended down $7.40 at $313.20/short ton; March soyoil fell 0.97c to 52.06c/lb.

Palm Oil Output in Malaysia Seen at Nine-Month Low on Flooding By Ranjeetha Pakiam    Jan. 6 (Bloomberg)
Palm oil production in Malaysia, theworld’s second-biggest supplier after Indonesia, probablydeclined to a nine-month low in December after floods disruptedharvests, according to a Bloomberg News survey.    Output fell 12 percent to 1.44 million metric tons, thelowest since March, from 1.63 million tons in November,according to the median estimate in the survey of three analystsand two plantation companies. Production was 1.23 million tons ayear earlier, according to the Malaysian Palm Oil Board, whichis scheduled to publish its estimates on Jan. 10.    Falling supply may pare stockpiles, helping futures inMalaysia extend the first quarterly advance in four, andpotentially boost profits at companies including Sime DarbyBhd., the world’s biggest publicly traded palm-oil producer.Futures may reach 3,400 ringgit ($1,080) a ton this month,according to Ker Chung Yang, an analyst at Phillip Futures Pte.    “The stockpile figures are likely to surprise on thedownside,” Ker said by phone from Singapore. “Stockpiles arelikely to go lower because the harvesting progress is beingaffected especially in Johor and Sabah,” two of Malaysia’s maingrowing regions, because of rains and flooding, he said.    The March-delivery contract fell 1.1 percent to 3,190ringgit per ton on the Malaysia Derivatives Exchange yesterday.The most-active contract gained 9.3 percent in the fourthquarter and reached a six-week high of 3,244 ringgit on Jan. 3.                      
Chinese Demand :  
Palm oil inventories in Malaysia probably fell 3.8 percentto 1.99 million tons, dropping below the 2 million-mark for thefirst time in four months, according to the survey. Exports maydrop 7.8 percent to 1.53 million tons, the survey showed.Shipments fell 2.6 percent to 1.49 million tons in December from1.53 million tons in November, surveyor Intertek said Dec. 31.    “Exports should hold up compared to last month consideringthat Chinese New Year celebrations will see some stockingactivities,” Arhnue Tan, vice president at Alliance ResearchSdn., said in an e-mail. “Stock levels will decline below 2million tons on high usage coupled with low production.”    La Nina weather conditions may have been responsible forabove-average rainfall in Southeast Asia in November and earlyDecember that interfered with palm oil harvesting, causing a“sharper-than-seasonal” drop in production, Hamburg-basedresearcher Oil World said Dec. 20.    Palm oil output typically peaks between July and October,before tapering off. The Lunar New Year festival in China willbe celebrated from Jan. 23 this year.    Malaysian output probably gained 11 percent to 18.9 milliontons in 2011 from a year earlier, according to the survey.

China Guangdong City Seizes More Tainted Cooking Oil -Report (Source: CME)
Government officials have seized counterfeit, substandard cooking oil in the Guangdong province city of Dongguan that could be harmful to health, the state-run China Daily newspaper reported, quoting city authorities. Although the volume involved is relatively small, the seizure is the latest in a renewed bout of food safety scandals, the most prominent of which was the recent discovery of carcinogenic aflatoxin in China Mengniu Dairy Co. products. The edible oil seized in Dongguan contained soyoil and palm oil, as well as an ingredient that made it smell like peanut oil, while crude cottonseed oil, which can cause infertility, was used to clarify the liquid, the paper said. Last month, in a separate incident, Guangdong government officials ordered a recall of carcinogenic cooking oil. In March 2011, police shut down a Shaoguan city business also for producing counterfeit peanut oil.
The Dongguan seizure amounted to 3,000 liters of edible oil or roughly three metric tons, according to Dow Jones Newswires calculations--tiny in comparison with the 6,575 tons the country consumes daily. The seizures so far may only have a negligible impact on the commodity trade now, but wider confiscations may alter market dynamics. Still, the problem of illegally recycled cooking oil is potentially market-moving if the government succeeds in eliminating and replacing it with fresh edible oil. "People in China consume about 2 million-3 million tons of illegal cooking oil every year," He Dongping, a food science expert at the Wuhan Polytechnic University, told state media. China consumes about 27 million tons of cooking oil a year, according to data from the China National Grain and Oils Information Center.

Palm oil eases on renewed euro zone concerns, weather eyed
SINGAPORE, Jan 5 (Reuters) - Malaysian crude palm oil futures slipped on rekindled investor caution over the euro zone debt crisis although weather concerns in oilseed growing regions limited losses.
"There is not much activity, probably because it's the beginning of the year. The weather is definitely a concern here. Plus the market has been up for quite sometime," said a trader with a foreign commodities brokerage in Malaysia.

India's Dec oilmeal exports up 24.5 pct y/y
NEW DELHI, Jan 5 (Reuters) - India's oilmeal exports rose 24.5 percent in December to 953,526 tonnes, a top trade body said on Thursday, following higher demand from traditional buyers such as Vietnam and Japan.  
Soymeal exports, which account for bulk of India's oilmeal sales, were at 798,041 tonne in December, up 30.6 percent from a year ago.