Thursday, January 12, 2012

20120112 1810 FCPO EOD Daily Chart Study.

FCPO closed : 3202, changed : -32 points, volume : higher.
Bollinger band reading : pullback correction upside biased.
MACD Histrogram : weakening, buyer taking profit.
Support : 3200, 3150, 3100, 3070 level.
Resistance : 3250, 3270, 3300, 3350 level.
Comment :
FCPO closed recorded loss with little improve better volume traded. Soy oil price currently registering gain firmer after overnight closed recorded loss by more than 1% while crude oil price currently trading higher after yesterday fall.
Pressure from lower soybean price due to rain fall in Argentina soybean planting area resulted FCPO price to eased lower.
Still, FCPO is trading in a pullback correction upside biased market development.
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.

20120112 1734 CPO Breaking News.

Palm Oil Drops as Rains Ease Soybean Crop Concerns in Argentina By Ranjeetha Pakiam
    Jan. 12 (Bloomberg) -- Palm oil declined after soybeans
fell the most in seven weeks yesterday as the threat of crop
damage from dry weather in South America eased following rain in
Argentina and on forecasts for precipitation in Brazil.
    The March-delivery contract dropped as much as 1.1 percent
to 3,198 ringgit ($1,018) a metric ton on the Malaysia
Derivatives Exchange and was at 3,219 ringgit in at 3:34 p.m.
Kuala Lumpur.
    An inch (2.5 centimeters) to 2 inches of rain fell in much
of Argentina, reducing crop stress on 75 percent of the corn and
soybean fields, Commodity Weather Group LLC said in a report
yesterday. Rains in the past 36 hours in Argentina should have
helped stabilize crop yield forecasts somewhat, although more
rain will be needed after the recent extreme heat in the region,
Telvent DTN Inc. said in a report yesterday.
    The “palm oil market is following the soybean oil price
yesterday,” Ryan Long, vice president of futures and options at
OSK Investment Bank Bhd., said by phone from Kuala Lumpur.
“There’s been news about the La Nina phenomenon getting weaker,
so people who were betting on the price going higher due to
weather are either taking-profit or reducing their position.”
    The La Nina weather event that parched crops in Argentina
and Brazil and flooded plantations in Thailand and Malaysia may
be weakening, Telvent said yesterday. The Southern Oscillation
Index, used to measure its strength, has declined since peaking
in December, signaling it “has topped out,” said Bryce
Anderson, an agricultural meteorologist.
    Soybean oil, a substitute for palm oil, for delivery in
March fell 1.2 percent to 51.89 cents a pound on the Chicago
Board of Trade yesterday. Futures were at 52 cents at 3:20 p.m.
in Singapore today. Soybeans for March delivery gained as much
as 0.6 percent to $12.10 a bushel, rebounding from a 2.4 percent
decline yesterday.
    Palm oil for delivery in September dropped 0.4 percent to
close at 8,140 yuan ($1,288) per ton on the Dalian Commodity
Exchange, while soybean oil for delivery in the same month slid
0.4 percent to end at 9,082 yuan a ton.

20120112 1729 FKLI EOD Daily Chart Study.

FKLI closed : 1524.5, changed : +0.5 points, volume : lower.
Bollinger band reading : pullback correction upside biased.
MACD Histrogram : weakening, buyer taking profit.
Support : 1515, 1505, 1500, 1494 level.
Resistance : 1530, 1540, 1550, 1565 level.
Comment :
FKLI closed 1 tick higher with thin volume changed hand doing 1 point discount compare to cash market that closed recorded small gain. Overnight U.S. market closed slightly lower and today Asia markets ended mixed while European markets trading mostly higher.
Global markets traded mixed after news on weaker Japan trade data, China slower inflation level lead to speculation of easing monetary policy and markets awaits Italy and Spain bond auction development.
Pullback correction upside biased market development phase still.
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.

20120112 1656 Regional Markets EOD Daily Chart Study.

 DJIA chart reading :  little upside biased.
 Hang Seng chart reading : upside biased.
KLCI chart reading : upside biased.

20120112 1555 Global Market & Commodities Related News.

Shares subdued as Spain auction puts investors on edge
TOKYO, Jan 12 (Reuters) - Asian shares were subdued and the euro hovered near a 16-month low as worries about euro zone sovereign funding kept investors risk-averse ahead of a Spanish debt sale that is seen as a key test of confidence.
"The month-on-month CPI was lower than the same month in the past few years. That means inflation is no longer a main concern for policymakers," said Zhiwei Zhang, economist at Nomura in Hong Kong. "China is more worried about an economic slowdown now and will continue the policy easing cycle."  

FOREX-Euro claws higher but gains seen capped
TOKYO, Jan 12 (Reuters) - The euro struggled higher in Asia on Thursday, moving away from a fresh 16-month low hit overnight, but its gains were capped ahead of a bond sale by Spain that is seen as a test of confidence in Europe's ability to meet its funding needs.
The single currency edged up 0.1 percent to $1.2714, after earlier bouncing off support at $1.2700, ahead of an option barrier at $1.2650 and another said to lie at $1.2590. The euro fell as low as $1.26615  on trading platform EBS in New York on Wednesday. Resistance is seen at the overnight high around $1.2790.

Soy up after losses; corn, wheat firm ahead of US report
SINGAPORE, Jan 12 (Reuters) - Chicago soy edged higher , recouping some of the previous session's deep losses, while corn and wheat firmed ahead of a key U.S. report on global demand and supply of agricultural commodities.
"Rains in Argentina were probably little better than some of the pessimistic forecasts which led to weakness in soybean prices overnight," said Victor Thianpiriya, agricultural commodity strategist at ANZ.

China to issue extra 1.1 mln T cotton import quota for 2012 -website
BEIJING, Jan 12 (Reuters) - China will soon issue another 1.1 million tonne cotton import quota for 2012, an industry website reported on Thursday, citing industry sources.
The extra quota will be subject to a sliding tariff ranging from 5 percent to 40 percent, according to a report published on, a website run by Cotlook Ltd, the China Cotton Association and the China National Cotton Exchange.

Philippines says likely hit 2011 farm output goal
MANILA, Jan 12 (Reuters) - The Philippines' farm output growth in 2011 may have hit a government target of 3-3.5 percent, helped by favourable weather early in the year that boosted crop harvests led by rice, corn and sugar, the agriculture minister said on Thursday.
Rice output would have been better if not for a series of typhoons in the second half, Agriculture Secretary Proceso Alcala told reporters.

Glyphosate-resistant weed spreads to Canada crop belt
WINNIPEG, Manitoba, Jan 11 (Reuters) - A weed resistant to a widely used chemical to protect crops has spread for the first time to Western Canada, the country's grain and canola belt.
Kochia weed turned up in three fields in Southern Alberta last August, despite the use of glyphosate, and Canadian government scientists have now confirmed that it is resistant to the farm chemical, seed company Monsanto Canada  said on Wednesday.
Rains come but Argentine farmers say need more
BUENOS AIRES, Jan 11 (Reuters) - Rains hit parts of Argentina's grains belt early Wednesday, moistening fields parched by drought, but farmers said the showers came to late to revive corn crops and clamored for government aid.
Weeks of dryness have shrunk Argentina's corn exporting capacity, which the world was counting on to replenish supplies after a disappointing U.S. harvest. The South American country is also a major soy producer.

Ghana cocoa buys hit 556,847 T by Dec 29 -Cocobod
ACCRA, Jan 11 (Reuters) - Cocoa purchases declared to Ghana's Cocobod reached 556,847 tonnes by Dec. 29 since the start of the 2011/2012 harvest season on Oct. 14, data from the industry regulator showed on Wednesday.
The figures, which covered the first 11 weeks of the 2011/12 main crop, were up 7.3 percent over the first 11 weeks of last season, according to the data seen by Reuters.

Brent firms as tensions between Iran, West mount
SINGAPORE, Jan 12 (Reuters) - Brent stayed near $113 on worries about supply disruption from Nigeria and Iran which offset pressure from a high inventory build and persisting eurozone debt woes.
"Clearly, there are reasons for the market to be jittery," said Jeremy Friesen, commodity strategist at Societe Generale in Hong Kong.

Japan to reduce Iran oil imports for US sanctions
TOKYO, Jan 12 (Reuters) - Japan's finance minister pledged after talks with U.S. Treasury Secretary Timothy Geithner on Thursday to steadily reduce oil imports from Iran in support of U.S. sanctions on Tehran over its disputed nuclear programme.  Geithner welcomed Tokyo's cooperation, which could be an encouraging sign for U.S. foreign policy after China, a big buyer of Iranian crude, rebuffed U.S. appeals to starve Iran of much-needed revenue from oil sales.

Japan eyes significant cut in Iran crude imports -media
TOKYO, Jan 12 (Reuters) - The Japanese government has started coordinating with the domestic oil industry on significantly cutting crude imports from Iran, aiming to secure a waiver for Japanese banks from U.S. sanctions against Iran over its nuclear programme, the Yomiuri newspaper said on Thursday.
Tokyo is unlikely to ban Iranian oil imports completely as it is difficult to quickly secure alternatives, with Iran accounting for about 9 percent of total imports, and the size of the reduction will be decided based on consultations with the United States, the paper said without citing sources.

Asia solar stocks surge on strong demand hopes
HONG KONG, Jan 12 (Reuters) - Asian solar stocks on Thursday echoed a rally by their U.S. peers, with some surging as much as 20 percent on signs that prices for solar energy components are stabilising.
In Hong Kong, GCL-Poly Energy Holdings Ltd  was up 13.2 percent, Trony Solar Holdings Co Ltd  rose 8.3 percent, Apollo Solar Energy Technology Holdings Ltd  firmed 3.5 percent and Solargiga Energy Holdings Ltd  climbed 13.2 percent.

Copper steady, eyes euro zone funding stress
SHANGHAI, Jan 12 (Reuters) - And, sendCopper was flat a day after hitting its highest level in a month, as markets turned cautious ahead of a Spanish debt auction and as Chinese buying wound down before the Lunar New Year holidays.  
"The demand picture here in China is quite mixed. We have heard that some of the home appliance makers are reporting very weak order books in January and February and will start their holidays from next week," she said.

Cyclone batters Australian iron ore shipping zone
SYDNEY, Jan 12 (Reuters) - Tropical cyclone Heidi lashed the west Australian coast on Thursday packing winds up to 120 km per hour (75 mph), forcing seaside residents to flee rising tidewaters and closing the world's biggest iron ore export terminals.   Traders predicted the storm, coupled with weather-related delays in Brazil this week, could support iron ore prices, which have been flat over the past two days.

Vale halts Brazil iron ore shipments due to rains
RIO DE JANEIRO, Jan 11 (Reuters) - The world's No. 1 iron ore exporter Vale   said on Wednesday it halted some iron ore shipments from Brazil due to heavy seasonal rainfall that has killed dozens of people and made mining hazardous.
The Brazilian miner said it will lose an estimated 2 million tonnes of ore shipments, the equivalent of nearly 1 percent of its annual output, due to the rains that have affected its operations in the southeastern region of the country.

BNP sees average 2012 metal prices below 2011 mean
Jan 11 (Reuters) - BNP Paribas said on Wednesday it expected the average price of all base metals to be lower in 2012 than in 2011, as economic and financial uncertainty will keep weighing on prices for much of the first quarter of the year.    
"But 2012 averages should all be higher than current prices and most metals are likely to make further progress in 2013," BNP Paribas analyst Stephen Briggs said in a note.

Iceland power outage hits aluminum smelters
Jan 11 (Reuters) - Century Aluminum Co  said on Wednesday that extreme weather knocked out power to its smelter in Iceland and it is in the process of resuming full operations.
The outage lasted about three hours on Tuesday and power was fully restored after about 12 hours, the California-based company said.

METALS-Copper steady, eyes euro zone funding stress
SHANGHAI, Jan 12 (Reuters) - And, sendCopper was flat on Thursday a day after hitting its highest level in a month, as markets turned cautious ahead of a Spanish debt auction and as Chinese buying wound down before the Lunar New Year holidays.  Three-month copper on the London Metal Exchange  traded at $7,771 a tonne, down 0.18 percent, by 0320 GMT.

PRECIOUS-Gold steady as Spain auction, ECB meeting loom
SINGAPORE, Jan 12 (Reuters) - Gold prices edged higher on Thursday on concerns about the euro zone debt crisis ahead of Spain's bond auction and an European Central Bank meeting, as robust buying from China and India also supported sentiment.
Bullion built on gains from the previous two sessions, even as the euro wallowed near a 16-month low hit on Wednesday, after Fitch warned the European Central Bank to ramp up asset purchases to avoid the euro's demise.

Gold steady as Spain auction, ECB meeting loom
SINGAPORE, Jan 12 (Reuters) - Gold prices edged higher on concerns about the euro zone debt crisis ahead of Spain's bond auction and an European Central Bank meeting, as robust buying from China and India also supported sentiment.
"The dollar and gold are both good buys at the moment as the markets watches the situation in Europe," said an official at a large bullion house in Tokyo, adding that the close correlation between the euro and gold at the end of 2011 has already broken.

20120110 1054 Global Market & Commodities Related News.

Most Asia Stock Indexes Advance as Lower China CPI May Allow Policy Easing
Most Asian stock indexes rose as slowing inflation in China added to speculation the government may be able further ease monetary policy in the world’s second- largest economy. Japanese stocks fell as weaker exports added to evidence Europe’s crisis is crimping global demand. Zoomlion Heavy Industry Science & Technology Co., a Chinese construction machinery maker, gained 3.3 percent in Hong Kong. Nissan Motor Co. (7201), Japan’s third-biggest carmaker, fell 1.2 percent after the nation’s current-account surplus narrowed on weak overseas demand. QBE Insurance Group Ltd., an Australian property and casualty insurer, tumbled 23 percent after predicting a drop in 2011 profit. The MSCI Asia Pacific Index (MXAP) dropped 0.1 percent to 116.17 as of 11:25 a.m. in Tokyo, with five shares falling for every four that rose. The gauge advanced 1.7 percent in the past three days amid bets that China will ease monetary policy. The MSCI Asia Pacific excluding Japan Index climbed 0.2 percent.

GLOBAL MARKETS-Shares subdued as Spain auction puts investors on edge
TOKYO, Jan 12 (Reuters) - Asian shares were subdued and the euro hovered near a 16-month low on Thursday as worries about euro zone sovereign funding kept investors risk-averse ahead of a Spanish debt sale that is seen as a key test of confidence.  "We see testing times ahead for the market, with uncertainty reverting higher, European currencies remaining under pressure," and safe haven assets such as the U.S. dollar getting fresh support, said analysts at Barclays capital in a research note.

COMMODITIES-Energy leads lower prices
NEW YORK, Jan 11 (Reuters) - U.S. commodities prices ended mixed on Wednesday with energy markets seeing some of the biggest declines as concerns over European debt drove oil prices down and mild weather and a surplus of natural gas sent prices tumbling.  "There's no really cold weather on the horizon, so no one's burning any gas, and we're producing like crazy. The only thing to do is keep selling it," a New York-based trader said, adding gas prices could test the $2 level this year.

Japan eyes significant cut in Iran crude imports -media
TOKYO, Jan 12 (Reuters) - The Japanese government has started coordinating with the domestic oil industry on significantly cutting crude imports from Iran, aiming to secure a waiver for Japanese banks from U.S. sanctions against Iran over its nuclear programme, the Yomiuri newspaper said on Thursday.
Tokyo is unlikely to ban Iranian oil imports completely as it is difficult to quickly secure alternatives, with Iran accounting for about 9 percent of total imports, and the size of the reduction will be decided based on consultations with the United States, the paper said without citing sources.

Canada PM to visit China, seeking higher oil sales
OTTAWA, Jan 11 (Reuters) - Canadian Prime Minister Stephen Harper plans to visit China next month as his government looks to open new markets for oil sands crude in the wake of Washington's decision to delay approval of a major pipeline from Alberta to Texas.
Harper is scheduled to fly to Beijing in the second week of February and aims to deepen economic ties with the Asian powerhouse, the prime minister's office said in a statement on Wednesday after he met with China's ambassador.

U.S. gasoline futures test below 300-day moving avg
NEW YORK, Jan 11 (Reuters) - U.S. gasoline futures briefly dipped below their 300-day moving average on Wednesday, dragged down by data showing a strong build in U.S. oil stocks and tepid demand.  U.S. front-month February gasoline futures fell 0.95 cent to settle at $2.7633 a gallon, after falling to $2.7328 and pushing below the 300-day moving average of $2.7494 a gallon.

Natural gas ends down 6 pct, front hits 28-month low
NEW YORK, Jan 11 (Reuters) - U.S. natural gas futures ended lower on Wednesday for a third straight day, with fairly mild winter weather and record high supplies driving the front-month to its lowest level in more than two years and the biggest three-day slide seen in 14 months.  "The withdrawals from storage this winter have been below average, and it that doesn't look like that trend will change based on the (fairly mild) weather outlook and strong production," said Eric Bickel, commodity analyst at Summit Energy in Kentucky.

Euro Coal-Prices fall $1/T with oil, low coal burn
LONDON, Jan 11 (Reuters) - Prompt European physical coal prices slipped by around $1.00 a tonne on Wednesday as utilities sold coal swaps in the face of weak coal burn across most of northern Europe after the warmest winter for 30 years.  "There was a lot of utility selling earlier today, everybody's got too much coal and the burn outside of southern Europe has been poor," one European utility source said.

20120112 1010 Local & Global Economic Related News.

Malaysia: Export growth slows as shipments of electronics ease
Malaysia’s exports grew at the slowest pace in 4 months in November as sales of electrical and electronic goods to the US and Thailand fell. Overseas shipments climbed 8% to RM56.9bn from a year earlier after gaining a revised 15.4% in October. (Bloomberg)

Germany: Economy shrank in Q4 as crisis weighs
Germany showed first signs of feeling the pain from the euro zone’s debt crisis as the economy shrank in the last three month of 2011, despite outperforming its peers for main part of the year thanks to strong domestic demand and exports. GDP grew 3.0% in 2011, below the previous year’s growth rate of 3.7%. But GDP contracted by around 0.25% in the fourth quarter of 2011. (Reuters)

EU: Parliament group opposes new draft of euro fiscal treaty
Leading members of the European Parliament objected to a planned euro fiscal treaty, saying it bypasses standard EU checks and balances and is skewed away from promoting economic growth. The latest draft of the treaty, which euro governments aim to sign by March, flouts “the normal procedures laid down in the EU treaties to ensure proper democratic scrutiny and accountability,” 4 parliamentarians said. (Bloomberg)

UK: Trade deficit widens more than forecast as exports fall
The UK goods-trade deficit widened more than economists forecast in November as exports dropped, led by lower sales of silver and consumer goods. The trade gap widened to GBP8.64bn from a revised GBP7.87bn in October. Exports fell 1.5% on the month, while imports rose 1.1%. (Bloomberg)

US: Mortgage applications picked up last week
Applications for US home mortgages rose in the first week of the year as demand for both purchases and refinancing perked up, an industry group said on Wednesday. The Mortgage Bankers Association said its seasonally adjusted index of mortgage application activity, which includes both refinancing and home purchase demand, rose 4.5% in the week ended 6 Jan. Its seasonally adjusted index of refinancing applications gained 3.3%, while the gauge of loan requests for home purchases climbed 8.1%. (Reuters)

US: Obama launches push to bring jobs back
President Barack Obama is launching a full-court press to make it easier for companies to bring jobs back to the US, including eliminating tax breaks that the administration says gives advantages to companies moving jobs overseas, the White House announced Wednesday. The administration said it will also in coming weeks propose new tax rewards for companies that bring back jobs. (Reuters)

20120112 1009 Malaysia Corporate Related News.

Bina Puri to bag Pakistan highway deal?
Bina Puri Holdings is close to securing the privatization concession for the Motorway 9 (M-9) highway in Pakistan sources told The Edge Financial Daily. The M-9 links Hyderabad to Karachi, the country’s largest city and seaport. It is understood that Bina Puri has already received the letter of intent (LOI) from the National Highway Authority of Pakistan but is still negotiating the finer points of the contract. According to source, the construction firm will have a 28-year concession to operate the highway, 3 years of which will entail Bina Puri upgrading the M9 from 4 lanes to 6 lanes, at a cost of some RM600m. (Financial Daily)

RHBCap awaits nod on merger with OSK unit
RHB Capital Bhd (RHBCap), is awaiting central bank approval for its planned merger of OSK Holdings Bhd's investment banking business. A merger of the two would create the country's largest stockbroker, unseating CIMB Investment Bank Bhd from its current top position. Both RHBCap and OSK said in separate filings to the stock exchange that they applied for approval from Bank Negara Malaysia (BNM) yesterday. (BT)

Tan Chong refutes speculation of Proton bid
Automotive manufacturer and distributor Tan Chong Motor Holdings has denied speculation that the company may join the race to acquire Khazanah Nasional Bhd's 42.74% stake in Proton Holdings. It was reported that the company had been invited to submit a bid and was in the midst of drawing up a proposal. Tan Chong's board of directors said in an announcement on Bursa Malaysia that they had neither received any formal invitation nor had any plan to bid for the stake. Group chairman Tan Sri Asmat said UMW’s focus was on its present commitments, mainly its partnerships with Toyota and Perodua. (Bernama)

Petra Energy names new CEO
Integrated oil and gas brownfield services provider Petra Energy has appointed Datuk Anthony @ Firdauz Bujang, 53, as CEO. He was previously group CEO of The New Straits Times Press (M) Bhd and CEO of television station, NTV7. (StarBiz)

Supermax sees better profit on expansion, higher prices
Supermax Corp Bhd expects to post a profit after tax of between RM100m and RM110m for its financial year ended 31 Dec 2011 (FY11). Executive chairman and group managing director Datuk Seri Stanley Thai said while Supermax would be announcing its full-year results by next month, the company was also expecting sales in FY11 to be around RM1bn. “We should be able to achieve our earlier forecast targets,” he said after the company's EGM. He expects a better financial year in 2012, with earnings to be similar with 2010. Thai said Supermax is aiming for sales growth of 20% to 30% in 2012, driven by its capacity expansion and expected higher demand for natural rubber gloves due to softening latex prices. (StarBiz)

Kulim board to discuss Malay Chamber of Commerce counterbid before CNY
The directors of Kulim (M) Bhd will meet before the Chinese New Year holidays to discuss a counterbid from the Malay Chamber of Commerce Malaysia (MCCM) to buy Kulim's 54% stake in QSR Brands Bhd. Sources say it is likely that the board will reject MCCM's offer. “The view has always been that Johor Corp (JCorp, which owns 55.9% of Kulim) is not keen on disposing of any of its prized assets, especially QSR and KFC. So it should come as no surprise if there is a rejection,” said a source close to the matter. (StarBiz)

Plan to privatise KTMB on track
Keretapi Tanah Melayu Bhd (KTMB) has been asked to assist MMC Corp to conduct due diligence on the national railway company starting this month, said its president Dr Aminuddin Adnan. The due diligence is important for MMC to decide if it wants to privatise KTMB. Business Times reported in December 2011 that MMC plans to pump some RM1bn into KTMB and take over its operations. Aminuddin told BT that the process by MMC to take over KTMB’s operation is on-going. “MMC sent us a letter stating that they want to start the due diligence this month and we have been asked to assist them. Other than that, we have not received any instructions from the government to put the matter on hold,” he said. (BT)

20120112 1003 Renewable Energy Related News.

Jan 10 (Reuters) - Sempra Energy  and BP Plc  will spend $1 billion to build new wind power farms this year in Pennsylvania and Kansas with a total output capacity of 560 megawatts, the companies said on Tuesday.
Wind power developers are racing to build new plants ahead of the expected expiration of a tax credit at the end of 2012, an incentive the industry is seeking to have extended to help make the renewable power source competitive against fossil fuel power stations.

LONDON, Jan 10 (Reuters) - Gazprom Energy, the retail subsidiary of Gazprom Marketing & Trading, signed its first contract to buy power from a small producer and is talking to other independent generators about offtake agreements, the company said.
Gazprom Energy signed a one-year power purchase agreement (PPA) for 16 megawatts (MW) with Infinis, a renewable energy company which generates power from biogas, hydro and wind.

MADRID, Jan 10 (Reuters) - Spanish hydropower reserves continued a recent slide last week, official data showed on Tuesday, which could drive up power prices and gas consumption in the world's eighth-biggest natural gas importer.
Reservoirs set aside for irrigation meanwhile rose, despite dry weather, which will tend to help Spain contain cereal import needs of at least 7 million tonnes a year, which lures sellers from Kazakhstan to Argentina.

ESSEN, Germany, Jan 10 (Reuters) - German utility RWE  plans to invest about 5 billion euros ($6.4 billion) to expand its green power business over the next four years, struggling to tap new areas of growth in a move to prepare itself for a nuclear-free energy market at home.
By announcing an investment plan for its renewable unit, RWE follows German peer E.ON , which in mid-December said it would spend 7 billion euros for its green energy business over the next five years.

BEIJING, Jan 10 (Reuters) - China, the world's biggest energy consumer, put another 90 gigawatts of power generating capacity into operation in 2011, bringing the total to 1,050 GW, the head of China's National Energy Administration said on Tuesday.
But Liu Tienan told a gathering of government, industry and Communist Party officials that China still needed to impose limits on energy consumption and address its growing reliance on foreign supplies, the People's Daily newspaper reported.

LOS ANGELES, Jan 9 (Reuters) - A little-known dispute between a U.S. renewable energy company and its Chinese customer over the theft of trade secrets could prove to be a significant test of China's intellectual property laws, and the success of Western companies in pursuing claims in China.
American Superconductor Corp , which makes wind turbine components and transmission grid systems, is seeking to recover $1.2 billion from Chinese wind turbine maker Sinovel Wind Group Co Ltd  in four separate legal actions in China. The U.S. company has accused its former biggest customer of stealing the software AMSC makes to power wind turbines and illegally canceling contracts.

FRANKFURT, Jan 9 (Reuters) - New solar installations reached a fresh record of 7.5 gigawatts (GW) in Germany in 2011, playing into the hands of advocates for steeper cuts in tariff subsidies to reduce growth of solar power and the resulting higher costs for consumers.
The figure slightly exceeds the 7.4 GW recorded in 2010, German network regulatory agency Bundesnetzagentur (BnetzA) said in a statement on Monday.

(The author is a Reuters market analyst. The views expressed are his own.)
LONDON, Jan 9 (Reuters) - A glut in solar power will drive yet more bankruptcies this year among panel producers after a brutal 2011, but falls in equipment prices will slow and leading firms may recover as spare capacity goes to the wall.
At the heart of solar power problems is a chronic over-capacity now almost double demand.

BUCHAREST, Jan 9 (Reuters) - Romanian state-owned hydro power producer Hidroelectrica will be unable to lift force majeure due to drought in the first quarter of the year, and will produce no more than 60 percent of its usual output, its general director was quoted as saying on Monday.
Hidroelectrica, which has installed capacity of some 6,400 megawatts and is Romania's cheapest power producer, declared force majeure in September and has cut deliveries to clients as a prolonged drought has lowered water levels on the Danube river, lifting power prices.

RABAT, Jan 6 (Reuters) - Morocco's state-run power utility, ONE, on Friday invited companies to submit expressions of interest in five wind farm projects with a total power generation capacity of 850 megawatts in the energy-importing country.
ONE said will take bids until March 2 from firms or consortia for "the development, design, financing, construction, operation and maintenance" of the five projects.

NAIROBI, Jan 5 (Reuters) - Construction of a 310 megawatt (MW) wind power project in Kenya is expected to start in April after its financiers complete due diligence on the project, a senior company official said on Thursday.
Most of Kenya's power is generated by hydroelectric plants, which are prone to the vagaries of frequent droughts, which cut water levels in dams, lead to power outages and force east Africa's biggest economy to rely on diesel-powered generators.

20120112 1002 Biofuel Related News.

LONDON, Jan 10 (Reuters) - Camco International  saw a 27 percent rise in the number of California carbon credits issued in the second half of last year as participants geared up for the start of the U.S. state's emissions trading scheme, the low-carbon project developer said in a trading update on Tuesday.
As of Jan. 6, Camco had 356,061 California carbon credits under management, compared to 281,061 on July 28, 2011.

FRANKFURT, Jan 9 (Reuters) - German carrier Lufthansa  is ending the trial use of a biofuel mix for its planes because it has used up stocks of certified biofuel and no other reliable supplies are available.
The trial, which ran on flights between Frankfurt and Hamburg, will end Jan. 12 on a flight from Frankfurt to Washington.

Jan 5 (Reuters) - U.S. ethanol production hit another  record high in the latest week as the industry sought every last drop of benefit out of the blender's tax credit that expired on Dec. 31, 2011.
Output hit 963,000 barrels per day for the week ended Dec. 30, up from the previous record of 962,000 barrels a day notched a week earlier, the Energy Information Administration reported on Thursday.

Jan 4 (Reuters) - It's been a "bumpy ride" for efforts to develop cellulosic ethanol as a viable alternative to corn ethanol, but several projects are moving forward and the biofuel should be flowing later this year and next, a leading industry executive said.
ZeaChem Inc CEO Jim Imbler said in a telephone interview on Wednesday that investor skepticism and technology complexities are among many factors keeping the cellulosic side of the U.S. biofuels business from taking off.

20120112 1001 Global Market & Commodities Related News.

Asian Stocks Swing Between Gains, Losses (Source: Bloomberg)
Asian stocks swung between gains and losses as mounting concern that Europe is heading toward a recession countered optimism the U.S. economy is improving. Mizuho Financial Group Inc., Japan’s third-largest lender by market value, fell 1.8 percent on concern Europe’s worsening sovereign-debt crisis will hurt bank earnings. Dainippon Sumitomo Pharma Co. sank 3.1 percent in Tokyo following a rating downgrade by Barclays Capital. James Hardie Industries SE (JHX), which counts the U.S. as its biggest market, gained 2.3 percent in Sydney after the Federal Reserve said the world’s biggest economy improved last month across most of the country. The MSCI Asia Pacific Index (MXAP) lost 0.1 percent to 116.16 as of 9:40 a.m. in Tokyo, having swung between gains and losses at least five times. More than two shares dropped for each that rose on the measure. The gauge advanced 0.9 percent last week as manufacturing growth from China to the U.S. bolstered confidence in the global economy.

Japanese Stocks Snap Two-Day Rally on Mounting European Recession Concern (Source: Bloomberg)
Japanese stocks fell, snapping a two-day advance, as a shrinking German economy fed concern Europe is headed toward a recession. Canon Inc. (7751), a camera maker that gets about a third of its revenue in Europe, fell 0.9 percent as the yen traded near an 11-year high against the euro. Inpex Corp. (1605), Japan’s No. 1 energy explorer, slid 0.2 percent after oil prices fell. Olympus Corp. (7733), gained 4.6 percent after a newspaper reported the scandal-hit optics manufacturer may form an alliance with companies including Sony Corp. and Panasonic Corp. The Nikkei 225 Stock Average fell 0.4 percent to 8,415.94 as of 9:21 a.m. in Tokyo. The broader Topix Index lost 0.3 percent to 731.38.

Most U.S. Stocks Advance as Financial Rally Overshadows Europe Concerns (Source: Bloomberg)
Most U.S. stocks advanced, sending the Standard & Poor’s 500 Index higher for a third day, as a rally in banks helped the market recover from an early slump spurred by growing signs Europe may slip into a recession. Citigroup Inc. (C) climbed 4.2 percent as analyst Dick Bove said the shares could “easily” triple in five years. Lennar Corp. (LEN) jumped 7.2 percent, pacing gains in homebuilders, after reporting a jump in new orders. Energy shares had the biggest decline in the S&P 500 among 10 industries as Chevron Corp. (CVX) dropped 1.2 percent. Urban Outfitters Inc. (URBN) tumbled 19 percent as the company’s chief executive officer resigned. About seven stocks rose for every five that fell on U.S. exchanges at 4 p.m. New York time. The S&P 500 increased less than 0.1 percent to 1,292.48. The benchmark index gained 1.2 percent in three days. The Dow Jones Industrial Average retreated 13.02 points, or 0.1 percent, to 12,449.45 today. The Nasdaq Composite Index advanced 0.3 percent to 2,710.76.

European Stocks Decline From One-Week High; Repsol, Pirelli Lead Retreat (Source: Bloomberg)
European stocks fell from a one-week high as Fitch Ratings said the European Central Bank must do more to prevent debt crisis from spreading and a report indicated the German economy is shrinking. Repsol YPF SA (REP), Spain’s largest oil company, tumbled 5.7 percent after selling 61 million of its own shares. Pirelli & C. SpA, Europe’s third-largest tiremaker, lost 4.5 percent after Goodyear Tire & Rubber Co. said global tire demand is weak. Chr. Hansen Holding A/S (CHR) jumped 9.8 percent as Novo A/S agreed to buy a 26 percent stake in the Danish food-ingredient company. The Stoxx Europe 600 Index dropped 0.4 percent to 249.93 at the close of trading, after earlier climbing as much as 0.3 percent. The gauge has still advanced 2.2 percent this year as economic reports around the world added to optimism the global economy can withstand the euro area’s debt crisis.

Most Emerging Stocks Rise as U.S. Expansion Beats Europe Recession Concern (Source: Bloomberg)
Most emerging-market stocks advanced as an improving U.S. economic expansion outweighed concern that Europe may be headed for a recession. The MSCI Emerging Markets Index was little changed at 948.65 at the close in New York as 412 stocks rose and 358 declined. Brazil’s Bovespa stock index advanced for a fourth day after a measure of prices unexpectedly dropped. Turkish shares gained 1.2 percent. Czech, Polish and Hungarian equities declined. The Philippine Stock Exchange Index (PCOMP) rose to a record after the central bank said monetary policy may be eased this quarter. The U.S. economy expanded at “a modest to moderate pace” from late November through December, according to the U.S. central bank. Germany may be on the brink of recession after the sovereign debt crisis caused the economy to contract in the final quarter of 2011. Europe’s largest economy shrank “roughly” 0.25 percent in the fourth quarter from the third, the Federal Statistics Office in Wiesbaden said today in an unofficial estimate.

Bernanke Doubling Down on Housing Bet Asks Government to Help: Mortgages (Source: Bloomberg)
Ben S. Bernanke is signaling his willingness to double down on a three-year bet that’s failed to revive housing, showing the extent of the Federal Reserve chairman’s effort to wrest a recovery from the deepest recession. Since the Fed started buying $1.25 trillion of mortgage bonds in January 2009, the value of U.S. housing has fallen 4.1 percent, and is down 32 percent from its 2006 peak, according to an S&P/Case-Shiller index. The central bank is poised to buy about $200 billion this year, or more than 20 percent of new loans, as it reinvests debt that’s being paid off. Some Fed officials have said they may support additional purchases that Barclays Capital estimates could total as much as $750 billion.
Even as Bernanke and fellow U.S. central bankers consider expanding their efforts, they are acknowledging their inability to turn around the housing market without help from the rest of the government. Bernanke underscored the importance of residential real estate, which represents 15 percent of the economy, in a study he sent to Congress last week that said ending the slump is necessary for a broader recovery.

Rail Traffic Surge Shows Canada Economy May Beat Growth Forecasts: Freight (Source: Bloomberg)
A boom in traffic at Canadian National Railways Co. (CNR) and Canadian Pacific Railway Ltd. (CP), the country’s two largest rail companies, may mean Canada’s recovery will be buoyant even after economists and the Bank of Canada pared their outlook for growth this year. Canadian freight volumes accelerated in the fourth quarter to their fastest pace in 2011 on a year-over-year basis, while commodity carloads were up 6.8 percent in December from November on a seasonally adjusted basis, according to data from the Association of American Railroads. Data from Statistics Canada showing stronger volumes in the August-October period also suggest future economic growth.
Rising rail shipments add to evidence that sales at Canadian producers such as chemicals maker Canexus Corp. (CUS) haven’t faltered in the face of the European debt crisis and a weak U.S. recovery. Bank of Canada Governor Mark Carney said last month risks to the global economy may lead to a “prolonged period of deficient demand.” Changes in rail carloads have predicted 63 percent of changes in monthly GDP three months into the future since 2000, according to Bloomberg calculations.

China Trade Triggers $115 Billion Australia Ports, Railway Boom: Freight (Source: Bloomberg)
Australia is set for an A$112 billion ($115 billion) infrastructure boom as the nation adds ports and railways to feed China and India’s appetite for coal and iron ore. The largest exporter of the key steelmaking materials will build enough railroads to stretch from Washington D.C. to Los Angeles over the next decade, as well as a new port on the Great Barrier Reef coast that will dwarf the world’s biggest bulk harbor. The projects will near-double global coal trade and add 57 percent to the market for seaborne iron ore. “There is so much opportunity here,” said Philippe Bouquet, Australia construction head at French builder Bouygues SA. “People in Paris are very impressed. They say: ‘23 million people? How can they do so much?’”

Vietnam May Cut Rates as Inflation Eases (Source: Bloomberg)
Vietnam signaled that it may cut policy interest rates to “more suitable” levels after the first quarter and weaken the dong this year as Asia’s fastest inflation eases. “The central bank will adjust policy rates to more suitable levels, aiming to help ease the average level of market interest rates,” central bank Governor Nguyen Van Binh said at a press conference yesterday. Vietnam faces a trade deficit, risks in the banking sector and slowing economic growth as the global recovery falters. While Indonesia and Thailand have cut borrowing costs in recent weeks to shield expansion, the World Bank and International Monetary Fund said last month Vietnam may undermine progress toward economic stability if it loosens monetary policy too soon.
“Based on recent policy statements they’ve made and the fact that inflation is slowing and growth is weakening, and given the pressures they’re under, I would be 99 percent sure that he meant that the next adjustment in rates would be down,” Gareth Leather, a London-based economist at Capital Economics, said after Binh’s comments.

South Korea to Start OTC Derivatives Clearinghoue to Reduce Global Risks (Source: Bloomberg)
Korea Exchange Inc. plans to start a clearing house for over-the-counter derivatives trading in the fourth quarter as Asia’s bourses join global efforts to reduce risk in the largely unregulated market. Korea Exchange, which operates the nation’s stock market, will first mandate clearing interest-rate swaps between financial firms operating in South Korea, Kim Jingyu, the president of the exchange’s derivatives market division, said in an interview at his Seoul office on Jan. 10. The clearing house will expand to other over-the-counter products such as credit- default swaps and cross-border trades, Kim said, without giving a time frame.
Regulators worldwide are increasing scrutiny of over-the- counter derivatives after they were blamed in part for masking risk in the lead up to the 2008 credit crisis and the collapse of Lehman Brothers Holdings Inc. Governments globally are working to move the trades on to exchanges and through central clearing houses, which manage risk. The market reached $708 trillion at the end of June 2011, according to Bank for International Settlements data.

Europe’s $39 Trillion Pension Threat Grows as Regional Economies Sputter (Source: Bloomberg)
Even before the euro crisis, people were worried about Europe’s pension bomb. State-funded pension obligations in 19 of the European Union nations were about five times higher than their combined gross debt, according to a study commissioned by the European Central Bank. The countries in the report compiled by the Research Center for Generational Contracts at Freiburg University in 2009 had almost 30 trillion euros ($39.3 trillion) of projected obligations to their existing populations. Germany accounted for 7.6 trillion euros and France 6.7 trillion euros of the liabilities, authors Christoph Mueller, Bernd Raffelhueschen and Olaf Weddige said in the report. “This is a totally unsustainable situation that quite clearly has to be reversed,” Jacob Funk Kirkegaard, a research fellow at the Peterson Institute for International Economics in Washington, said in a telephone interview.

Europe Banks Resisting Draghi Bid to Avert Credit Crunch by Hoarding Cash (Source: Bloomberg)
Banks are hoarding the European Central Bank’s record 489 billion-euro ($625 billion) injection into the banking system, thwarting attempts by policy makers to avert a credit crunch in the region. Almost all of the money loaned to 523 euro-area lenders last month wound up back on deposit at the Frankfurt-based central bank instead of pouring into the financial system, ECB data show. Banks will use most of the three-year loans to meet their refinancing needs for this year and next, analysts at Morgan Stanley and Royal Bank of Scotland Group Plc estimate. “It’s illusory to think that the measure will translate into credit generation,” Philippe Waechter, chief economist at Natixis Asset Management in Paris, said in an interview. “It will assuage some of the anxiety banks have regarding their liquidity needs. But they’ve engaged into a massive overhaul of their strategy and shrinkage of their balance sheets, which is, coupled with the deteriorating economy, not compatible with increasing credit.”

German Economy May Have Shrunk at End 2011 (Source: Bloomberg)
The German economy probably contracted in the final quarter of 2011 as the sovereign debt crisis damped demand for exports. Europe’s largest economy shrank “roughly” 0.25 percent in the fourth quarter from the third, the Federal Statistics Office in Wiesbaden said today, adding it may revise its assessment by the time official data are published on Feb. 15. Growth slowed to 3 percent in 2011 from 3.7 percent in 2010, which was the most since German reunification two decades ago, the office said. Germany’s budget deficit amounted to 1 percent of gross domestic product last year. German growth is slowing as the weaker global economy and waning demand from debt-stricken euro-area neighbors erodes foreign sales. Germany may still avoid a recession as unemployment at a two-decade low supports consumer spending.

Germany on Brink of Recession as Euro Debt Crisis Damps Exports: Economy (Source: Bloomberg)
Germany may be on the brink of recession after the sovereign debt crisis caused the economy to contract in the final quarter of 2011. Europe’s largest economy shrank “roughly” 0.25 percent in the fourth quarter from the third, the Federal Statistics Office in Wiesbaden said today in an unofficial estimate. Economists such as Christian Schulz at Berenberg Bank expect gross domestic product to contract again in the current quarter. A recession is defined as two consecutive quarters of declining GDP. “If the euro crisis does not get worse or is finally brought under control after another wave in early 2012, the German economy can rebound nicely from the summer onwards,” said Schulz, a senior economist with Berenberg in London. “However, we see a 25 percent chance of the euro crisis remaining out of control longer, or completely spiraling out of control with a series of sovereign and bank defaults. In such a scenario, Germany would enter a major recession.”

Spanish Banks Undermine Recovery With Discriminatory Home Loans: Mortgages (Source: Bloomberg)
Spain’s banks, saddled with 329,000 foreclosed homes, are still willing to provide mortgages, as long as the borrower wants to buy one of their properties, according to a consumer-rights group. That’s no help to homeowners and developers seeking to sell. Members of the group, OrganizaciĆ³n de Consumidores y Usuarios, or OCU, applied for mortgages at 46 bank branches in Spain in August and September to buy privately-owned homes. In every case, the lender tried to persuade the prospective borrower to purchase one of its own properties instead -- either by offering to finance 100 percent of the price or by refusing to lend for another home, spokeswoman Ileana Izverniceanu said. “People end up buying from the banks because they have no alternative,” Izverniceanu said in an interview at her office in Madrid.

20120112 1000 Global Commodities Related News.

Corn (Source: CME)
US corn futures end just below Tuesday's close as traders evened positions ahead of key government crop reports Thursday. Futures were supported by outlooks for the USDA to report a tighter balance between US corn supply and demand while badly needed rains in drought-stricken parts of Argentina produced light price pressure. Still, losses were limited by fears the rains were too late to eliminate crop damage there, analysts add. CBOT March corn ended down 1/2c at $6.51 1/2 a bushel.

Wheat (Source: CME)
US wheat futures end higher, rebounding from early declines as traders positioned ahead of tomorrow's government crop reports. USDA will release supply/demand and winter wheat seedings estimates Thursday morning. Market rallied despite US dollar strength, as participants took some profits on short positions in an effort to reduce risk exposure, analysts say. MGEX futures led the bounce in wheat futures, as traders anticipate USDA will likely show tight supplies for hard red spring wheat, analysts add. MGEX March wheat ended up 4 1/4c to $8.16 1/2/bushel; March KCBT wheat up 3 3/4c at $7.01 3/4; CBOT March wheat up 1 1/4c at $6.41.

Rice (Source: CME)
US rice futures end slightly higher amid consolidation ahead of Thursday's key USDA reports. The reports on quarterly stockpiles and ending stocks projections will be pivotal for the entire grain complex, traders say. Rice fundamentals remain weak as demand is poor, but the market has traded in a tight, sideways pattern in recent days. Worries about Brazil's rice crop adds underlying support. CBOT March rice ends up 3 1/2c to $14.80 a hundredweight.

US corn, soy fall on Argentina rains, firm dollar
SINGAPORE, Jan 11 (Reuters) - U.S. corn and soy slid around half a percent, weighed down by a firm dollar and rains in Argentina that brought much-needed relief to parts of its drought-hit crop belt.
"Corn and soybeans are feeling a little bit of pressure from current rainfall in South America as we are seeing some relief to the drought-stressed crops," said Luke Mathews, Commodities Strategist at Commonwealth Bank of Australia.

Rains finally hit Argentina, help corn, soy
BUENOS AIRES, Jan 10 (Reuters) - Rain finally started to hit Argentina's grain belt on Tuesday and farmers in the major agricultural exporter hoped the showers would last long enough to revive soy and corn fields dried out by a drought that raised global supply worries.
A long drought has shrunk the corn crop in Argentina, which the world has been counting on to replenish international stocks after a disappointing U.S. harvest.

French July-Nov wheat exports down 13 pct -customs
PARIS, Jan 10 (Reuters) - French soft wheat exports for the July-November period were down 13 percent on year as a sharp drop in shipments outside the European Union continued to outweigh a rise in volumes within the EU, customs data showed on Tuesday.
France exported 1.75 million tonnes of soft wheat in November, bringing the volume since the start of the 2011/12 season on July 1 to 7.5 million tonnes, down from 8.6 million at the same stage last season, the data showed.

Rains expected to hit Argentina, reviving corn, soy
BUENOS AIRES, Jan 10 (Reuters) - Rains will hit Argentina's central grains belt late Tuesday and on Wednesday, helping to revive soy and corn crops that had been left panting for water after weeks of drought, forecasters said.
Some parts of Argentina, which supplies nearly half the world's soyoil and soymeal and about 20 percent of its corn, got scattered showers early on Tuesday. But most growers, who have already lost up to a fifth of their 2011/12 corn crops and are worried about their soy fields, will have to wait a bit longer.

Ukraine sees fall in 12/13 grain crops, exports
KIEV, Jan 10 (Reuters) - Ukraine's exports of wheat are likely to fall by 17 percent in the 2012/13 season to 6.3 million tonnes due to a sharp decrease in this year's wheat harvest after a severe drought, analyst UkrAgroConsult said on Tuesday.
The consultancy said the former Soviet republic could export 7.6 million tonnes of wheat in 2011/12. In November, it expected the exports at 9.7 million tonnes.

Rain Brings Some Relief To Argentina's Parched Fields (Source: CME)
Argentina's farmers breathed a sigh of relief on Wednesday after rain fell overnight across some of the most productive regions of the South American nation's drought-stricken farm belt. Argentina is the world's second-leading corn exporter behind the U.S. and ranks third in soybean exports. "Rainfall was decent in parts of Buenos Aires, Cordoba and Santa Fe provinces," said Pablo Mercuri, director of the federal government's national water and climate office. However, in other areas it appeared that precipitation may not have been sufficient to reverse drought damage, he said. "We're evaluating the situation and preparing a report later today that will review the results," Mercuri said. Farmers have voiced serious concerns about what they say could be the worst drought in decades. The drought has already damaged part of the 2011-12 corn crop and threatens soybeans.
Both crops are key revenue generators for farmers and the government, which collects billions of dollars each year through export taxes on agricultural goods. Farm leaders have called on the government to lower or suspend those taxes to help farmers handle the financial fallout from the drought. So far, government officials have demurred, saying the situation may not be that critical. In November, when analysts still expected December and January rain to alleviate the dry spell, the 2011-12 corn crop was on track to produce a record 24 million to 25 million metric tons, according to Ernesto Crinigan, president of the Buenos Aires Cereals Exchange. That forecast included only commercial corn, not corn grown for animal feed and used at the same farm where it was grown. But the lack of rain could cause losses totaling millions of metric tons of corn, according to Argentina's Agrarian Federation and the Argentine Rural Society.
The U.S. Department of Agriculture last month forecast that Argentina would produce 29 million tons of 2011-2012 corn, with 20 million tons of that for export. Agrarian Federation President Eduardo Buzzi said earlier this week that 10 million tons of corn had been lost to the drought. The 2011-2012 soybean crop is considered to be in much better shape given that soybeans typically need less water than corn and it's still early enough in the season for soy to recover. The USDA last month put Argentina's 2011-2012 soybean output at 52 million tons, with 10.8 million tons for export. Most of the remainder is processed into soyoil and soymeal for export. It could be days or weeks before accurate estimates can be made about the state of the crops, Mercuri said.

U.S. Wheat Expanding From Century Low as Glut Looms: Commodities (Source: Bloomberg)
U.S. farmers, the world’s biggest wheat exporters, probably planted the most winter grain in three years, expanding acreage from a century-low reached in 2009 just as a global supply glut swells to its biggest in a decade. About 41.02 million acres, an area bigger than Illinois, were sown from September to November, 0.9 percent more than a year earlier, according to the average of 16 analyst estimates compiled by Bloomberg. That will add to world inventories set to rise 4 percent to 207.7 million metric tons, the most since 2000, the survey showed. Winter wheat makes up 74 percent of the U.S. crop, and the government gives its first estimate tomorrow.
Wheat traded in Chicago fell 30 percent from a 29-month high in February as a 47 percent surge in 2010 spurred more planting. That helped global food prices tracked by the United Nations drop 9.6 percent from a record, easing costs that drove global inflation higher. The second most widely held option gives owners the right to sell wheat at $6 a bushel by February, 6.4 percent lower than now, Chicago Board of Trade data show.

La Nina May Weaken, Boosting Outlook for Grain Crops in Argentina, Brazil (Source: Bloomberg)
The La Nina weather event that parched crops in Argentina and Brazil and flooded plantations in Thailand and Malaysia may be weakening, said Telvent DTN Inc. The Southern Oscillation Index, used to measure its strength, has declined since peaking in December, signaling it “has topped out,” said Bryce Anderson, an agricultural meteorologist, who correctly predicted that wet conditions would delay U.S. corn planting last year. Dry weather has wilted crops in Argentina, the world’s second-biggest corn exporter, and in Brazil, the second-largest grower of soybeans. Corn futures have climbed 13 percent in Chicago since Dec. 15 on concern that the lack of rain would cut production. Soybeans and wheat have each rallied about 10 percent since the middle of last month.

ICA Warns On Sharp Price Swings In Cotton Market (Source: CME)
Sharp price swings in the global cotton market could hurt the supply chain of the fiber in the long term, a major industry regulator warned. Last March, cotton prices on ICE Futures U.S. surged to a record high of $2.27 a pound but the prices squashed global demand for the fiber and drove prices down 37% in 2011. The effects reverberated throughout the industry, crushing margins at apparel companies, commodity firms and textile mills. "It is easy to succumb to the attraction of short-term gains, but history shows that this will create irreparable damage that will affect the long-term economic sustainability of the cotton supply chain," Antonio Esteve, president of the Liverpool-based International Cotton Association, said in a statement. The International Cotton Association sets the rules for most of the world's cotton trade. Last year's price swings sparked a record number of legal disputes between cotton merchants and mills, the ICA said.
The ICA received 242 requests for arbitration in 2011, more than five times what it normally receives on average in a year. Many textile mills canceled orders for the fiber after prices fell. The ICA said it has developed a training course for spinners and cotton brokers to promote "responsible contracting." "The cotton supply chain is very long, but by reaching out in this way we know we can help promote a safer trading environment," said the group's statement.

Brazil sees record 2012 crop coffee despite dryness
BRASILIA, Jan 10 (Reuters) - Brazil will produce a record coffee crop in the 2012/13 harvest season, helped by increased investment and despite a harsh dry spell that cut productive potential at the season's outset, the crop supply agency Conab said on Tuesday.
Brazil should harvest 49 million to 52.3 million 60-kg bags compared with 48.1 million bags in the last 'on-year' crop in 2010, according to Conab estimates.

India's Dec rubber imports jump; trend seen continuing
MUMBAI, Jan 10 (Reuters) - India imported 21,734 tonnes of natural rubber in December, up 57 percent on year, state-run Rubber Board said, and traders expect the robust pace to continue as tyre makers resort to cheaper imports to make good a likely decline in domestic output.
India's rubber production rose just 1 percent to 104,000 tonnes in December, while consumption increased 4.39 percent to stood at 84,000 tonnes, the board said in a statement.  

Vietnam 2015 coal output to rise to 55-58 mln T -govt
HANOI, Jan 11 (Reuters) - Vietnam plans to raise its coal output to 55-58 million tonnes in 2015 from an estimated 48.9 million tonnes this year, the government said.
The output is projected to rise to more than 75 million tonnes by 2030 thanks to the exploitation of new sites, the government said late on Tuesday in an approved plan for coal development.

Euro Coal-Prices dip with oil, utility selling
LONDON, Jan 9 (Reuters) - Prompt European physical coal prices fell by $1 to $2 per tonne on Monday, in line with weaker oil, as some smaller European utilities started to sell cargoes they would not need due to the mild winter.
Last week the market appeared to have steadied and tight near-term supply of South African coal boosted prices, which had slipped during the Christmas and New Year holidays.

S.Africa 2011 RBCT coal exports up y/y to 65.5 mln T
JOHANNESBURG, Jan 9 (Reuters) - South Africa exported 65.5 million tonnes of coal from the Richards Bay Coal Terminal in 2011, up from 63.4 million tonnes the previous year, the terminal said in a statement on Monday.
Coal stocks at the terminal stood at 3.3 million tonnes at the end of December, it added.

Brent rises above $113 after blast in Iran
SINGAPORE, Jan 11 (Reuters) - Brent crude rose above $113, reversing losses as a blast in Tehran added to concerns of supply disruption from Iran, overshadowing worries about demand growth due to Europe's debt crisis.
"The market could be reacting to headlines of the blast and further price gains are possible during London and New York trading time, depending on Iran's reaction," said Ken Hasegawa, a derivatives manager with brokerage Newedge in Tokyo.

Saudi oil output nearing capacity limit
DUBAI/RIYADH, Jan 10 (Reuters) - Top oil exporter Saudi Arabia is nearing its comfortable operational production limits and may struggle to do much to make up for shortages that arise from new sanctions imposed on Iran by the West, Gulf-based sources said.    
The kingdom, now pumping just under record rates of 10 million barrels per day, has poured billions of dollars into its vast oil fields, which on paper should ensure it has the ability to ramp up to 12.5 million bpd.

U.S. oil supply growth to slow in 2013-EIA
WASHINGTON, Jan 10 (Reuters) - Despite the shale boom, U.S. oil production growth is seen slowing in 2013 after posting big gains over the past few years, the Energy Information Administration said on Tuesday.
U.S. oil output is expected to climb just 80,000 barrels per day to 5.82 million bpd in 2013, down from the 170,000 bpd increase estimated for this year, the EIA said in its monthly report.

China 2012 crude oil demand to grow faster - CPCIF
BEIJING, Jan 11 (Reuters) - China's apparent crude oil consumption could accelerate in 2012 from a year earlier due to ongoing strong demand for energy and chemical products, forecasts from an industry association showed on Wednesday.
The China Petroleum and Chemical Industry Federation estimated that apparent crude consumption will increase 5.3 percent year on year to 480 million tonnes in 2012, or 9.6 million barrels per day, compared with its forecast of a rise of around 3.5 percent in 2011.

Oil Gains on Bets Supplies May Be Curbed by Nigeria Strike, Iran Sanctions (Source: Bloomberg)
Oil rose from the lowest close this year in New York on signs that crude supplies may be reduced by a strike in Nigeria and the threat of sanctions on Iran. The Nigerian oil union Pengassan said it has started the process of shutting the platforms of Africa’s top petroleum producer to support demands for the return of fuel subsidies by labor unions. Japan may significantly reduce its imports of crude from Iran, the Yomiuri newspaper reported, without saying where it obtained the information. Futures for February settlement rose as much as 46 cents, or 0.5 percent, to $101.33 a barrel in electronic trading on the New York Mercantile Exchange. The contract was at $101.30 at 10:59 a.m. Sydney time. Crude yesterday slipped 1.3 percent to $100.87, the lowest close since Dec. 30.

China May Idle Most Aluminum Capacity Since 2009 on Prices: Commodities (Source: Bloomberg)
Chinese aluminum smelters may idle their annual capacity by one-third, the most in three years, as energy costs soar and prices slump. China may produce almost 20 million metric tons of the lightweight metal and its capacity may be as much as 30 million tons by the end of this year, said Luo Rongjin, a Beijing-based analyst with Bocom International Holdings Co. Monthly output from China, the world’s biggest producer, fell 8.3 percent in November from a record 1.6 million tons in August. Alcoa Inc. (AA), Rio Tinto Group and their global rivals are cutting production after prices dropped 19 percent last year, curbing profits. Alcoa, the largest U.S. producer that reported its first loss in two years this week, said China may use 70 percent of its capacity in 2012.

Iron Ore-Spot at 7-week top, Australian miners suspend loading
SINGAPORE, Jan 11 (Reuters) - Spot iron ore prices rose to seven-week highs, spurred by Chinese steel mills building inventories ahead of the Lunar New Year break later this month and expectations prices may climb further after the holiday.
News of supply disruption from top iron ore exporter Australia where miners Rio Tinto   and Fortescue Metals Group  have suspended loading operations ahead of a cyclone bearing down on west Australia should also support prices.

Cyclone shuts Australian iron ore ports & oil fields
SYDNEY/PERTH, Jan 11 (Reuters) - A tropical cyclone bearing down on west Australia forced the closure of some of the world's largest iron ore ports and several offshore oil fields on Wednesday, the first major series of shutdowns in what is forecast to be a tempestuous summer.
Ports serving the enormous iron ore mines of northwest Australia began closing on Tuesday night as Cyclone Heidi, packing winds of more than 100 kph (60 mph), swept across the Indian Ocean toward a stretch of coast where nearly two-thirds of the world's seaborne-traded iron ore is handled.

Venezuela 2011 iron ore output up 21 pct, but below capacity
CARACAS, Jan 10 (Reuters) - Venezuela boosted iron ore output to 17 million tonnes in 2011, up 21 percent from a year earlier, the country's primary iron producer Ferrominera Orinoco said, a figure still far short of its 25-million-tonne annual capacity.
The nation's state-run basic industries, which also include aluminum and steel, are producing well below capacity due to low investment, outdated technology, and a 2010 electricity crisis that the country never fully resolved.

China Dec iron ore imports down 0.2 pct -customs
BEIJING, Jan 10 (Reuters) - China's iron ore imports stayed near 10-month highs in December as lower prices encouraged stockpiling in the world's top buyer of the raw material despite uncertainty over the outlook for steel demand.
China imported 64.09 million tonnes of iron ore in December, down just 0.2 percent from the 10-month high in November, data from the country's customs authority showed on Tuesday.

German crude steel output seen flat in 2012
FRANKFURT, Jan 10 (Reuters) - Germany's crude steel output will probably remain almost flat this year as the euro zone debt crisis starts to affect the economy of Europe's largest steelmaker, and the risk of rising raw material prices weighs, a German industry body said.
The German Steel Federation said crude steel production last year rose 1 percent to 44.3 million tonnes, affected by a  summer dip in demand that deepened into a second-half slump that forced capacity cuts in steel mills.

Copper vulnerable to price spikes due to shorts
LONDON/NEW YORK, Jan 10 (Reuters) - Copper is more vulnerable to price spikes than other metals because of a large buildup of short positions by money managers, which could lead to short-covering rallies on a change in market sentiment.
Money managers have been betting on falling copper prices for 16 straight weeks, according to the latest data from the U.S. Commodity Futures Trading Commission (CFTC), which showed net short positions in the week to Jan. 6 at 2,007 lots.

METALS-Copper slips as China buyers hold back after Dec imports
KUALA LUMPUR/SHANGHAI, Jan 11 (Reuters) - London copper fell erasing some of the previous session's gains, as Chinese consumers held back purchases ahead of the Lunar New Year holidays.
Prices were up more than 3 percent on Tuesday on record imports from top consumer China in December that brightened the demand outlook for industrial metals.

PRECIOUS-Gold edges up as Europe uncertainty supports
SINGAPORE, Jan 11 (Reuters) - Gold inched up  to flirt with a key resistance level, shrugging off a stronger dollar, as persistent uncertainties on the euro zone debt crisis lured investors to the safety of bullion.
Bright economic prospects offered by Alcoa's upbeat outlook helped push Asian shares higher, although investors refrained from riskier bets before Italy and Spain put up bond auctions, seen as a test of investors' confidence in the euro zone.

Baltic index at 5-month low, to stay in doldrums
LONDON, Jan 10 (Reuters) - The Baltic Exchange's main sea freight index, which tracks rates to ship dry commodities, fell to its lowest in five months on Tuesday as a growing slowdown in cargo bookings hurt sentiment.
The shipping sector in coming months is expected to face a supply glut and economic gloom, including concerns over the outlook for Chinese demand for raw materials, which will pressure earnings.                  

S.Korea, China battle to be king of the LNG shipyard
SEOUL/SINGAPORE, Jan 10 (Reuters) - The battle between South Korea and China to own Gaztransport & Technigaz, a firm that develops systems for storing liquefied natural gas (LNG) on ships, could ultimately be one of survival for Korean shipbuilders after the country lost most of its market share in the building of standard ships to China.
South Korean shipbuilders could take the unprecedented step of joining forces to compete against China in acquiring the French firm, with the winner poised to dominate the lucrative LNG carrier market for years.

20120112 0953 Soy Oil & Palm Oil Related News.

Soybeans (Source: CME)
US soybean futures fell sharply as South American rains had traders reducing risk exposure before key government reports. Heavier-than-expected showers in Argentina overnight forced traders to reduce the weather premium placed in the market as fears of yield losses eased some. Otherwise, traders were aggressively evening positions before Thursday's USDA reports, taking profits in case government data produce a bearish surprise, analysts say. CBOT March soybeans ended down 2.4% at $12.03/bushel.

Soybean Meal/Oil (Source: CME)
Soy-product futures slumped in unison with soybean futures, succumbing to pressure from improved crop outlooks for South America. Beneficial rains in Argentina, eased supply fears, allowing traders to even trades ahead of Thursday's USDA reports. CBOT March soymeal ended down $9.70 at $312.80/short ton and March soyoil dropped 0.61c to 51.89c/pound.

Palm oil eases as Europe worries weigh
SINGAPORE, Jan 11 (Reuters) - Malaysian crude palm oil futures slipped as euro zone debt concerns overshadowed prospects of lower edible oil output due to dry weather in South America and heavy rains in Southeast Asia.
"Traders are mainly still in a puzzle mode over the bearish MPOB data. They will be looking for the USDA report to drive the market," said a dealer with a foreign commodities brokerage in Kuala Lumpur, referring to the U.S. Department of Agriculture report due Thursday.

Paraguay soy parched, crop losses to hurt economy
ASUNCION, Jan 10 (Reuters) - A  drought striking South American farm lands has affected 40 percent of Paraguay's 2011/12 soy crop, raising concern among banks that farmers will stop repaying loans and stoking worries that economic growth will be slashed.
Paraguay, one of South America's poorest countries, is the world's No. 4 soybean supplier and the oilseed is its top export earner. The lack of rain has shrunk its main crop while a foot-and-mouth disease outbreak pummels the beef industry.

Indian imports may raise vegoil prices -Oil World
HAMBURG, Jan 10 (Reuters) - A poor rapeseed harvest looming in India could its edible oil import requirements in coming months and add support to global vegetable oil prices at a time of concern about drought damage to South American soybean harvests, Hamburg-based oilseeds analysts Oil World said on Tuesday.
Indian oilseed processors warned on Jan. 4 that a poor rapeseed crop was likely in 2012. The extent of crop damage is unclear but larger edible oil imports are expected.

Brazil raises soy forecast after successive cuts
BRASILIA, Jan 10 (Reuters) - Brazil on Tuesday raised its forecast for the size of this year's soybean crop after seeing a larger total planted area than in previous months, but warned that drought conditions which have raised the specter of production shortfalls have not been fully accounted for.
Government crop agency Conab forecast 2011/12 soy production at 71.75 million tonnes, up from the 71.29 million tonnes it estimated in December.

Ukraine rapeseed harvest to fall in 2012
KIEV, Jan 10 (Reuters) - Ukraine's 2012 rapeseed harvest is likely to fall to between 0.95 and 1.2 million tonnes against 1.42 million tonnes in 2011 due to a poor state of winter rapeseed crops after a severe drought, analyst UkrAgroConsult said on Tuesday.
"A significant portion of weak, sparse crops may be lost in the winter or spring. We currently forecast Ukraine's 2012 winter rapeseed crop at 950,000 to 1.2 million tonnes," the consultancy said in a report.