Friday, January 13, 2012

20120113 1812 FCPO EOD Daily Chart Study.

FCPO closed : 3151, changed : -51 points, volume : higher.
Bollinger band reading : pullback correction upside biased.
MACD Histrogram : weakening, buyer taking profit.
Support : 3150, 3100, 3070, 3050 level.
Resistance : 3200, 3250, 3270, 3300 level.
Comment :
FCPO closed recorded substantial loss with higher volume participation. Soy oil price currently trading between gain and losses after overnight closed weaker while crude oil price currently trading lower testing 100 support level.
News on bigger soybean supply forecast by USDA and switching switching to April month contract activities resulted FCPO to trade lower today.
Chart reading remained suggesting a pullback correction upside biased market development with MACD indicator having negative cross down.
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.

20120113 1744 FKLI EOD Daily Chart Study.

FKLI closed : 1527, changed : +2.5 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 recorded small gain with dying volume transacted hand doing 4 points premium compare to cash market that closed little lower. Overnight U.S. market closed rebounded slightly higher and today Asia markets ended mostly higher while European markets also currently trading in positive territory.
Most markets traded higher after lower borrowing cost on Spain and Italy bond auction.
Again, still 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 resistance or strength with quick cut loss and profit target.

20120113 1733 Regional Markets EOD Daily Chart Study.

DJIA chart reading :  little upside biased.
 Hang Seng chart reading : upside biased.
KLCI chart reading : correction range bound upside biased.

20120113 1730 Global Market & Commodities Related News.

Shares gain as strong debt sales ease risk aversion
TOKYO, Jan 12 (Reuters) - Asian shares rose to a one-month high and the euro clung near its strongest in a week as strong demand in Spanish and Italian debt sales tempered risk aversion ahead of another auction from Rome later in the day.
"The tide may turn around soon from extreme pessimism seen last year as people become less convinced the euro zone debt crisis would devastate global growth and wonder if it isn't time to start thinking positively," said Tetsu Emori, a fund manager with Astramax Co. in Tokyo.  

FOREX-Euro steady, shows signs of stabilising vs AUD
SINGAPORE, Jan 13 (Reuters) - The euro held steady clinging to gains made the previous day after debt sales in Spain and Italy drew solid demand, with technical signals suggesting it may also get some reprieve versus the Australian dollar.    
"We are thinking that the risk is you have a small bounce," said Dhiren Sarin, chief technical strategist Asia FX for   Barclays Capital in Singapore, adding that the euro's rise against the Australian dollar the previous day produced some bullish technical signals.

India Dec palm oil imports to fall; soyoil up
NEW DELHI, Jan 12 (Reuters) - India's palm oil imports are likely to decline in December over the previous month as domestic oilseeds crushing peaked, but the fall is expected to reverse next month as local supplies run out, a Reuters survey showed on Thursday.
The other reasons for the fall are a weak rupee that has made imports costlier and a tendency of palm oil to solidify at lower temperatures. It is winter in India now.

GRAINS-US corn at 3-week low on supply surprise, soy rebounds
SINGAPORE, Jan 13 (Reuters) - Chicago corn slid to a three-week low , deepening losses after falling by its daily limit in the last session, while wheat traded near a four-week low, pressured by a U.S. forecast of higher-than-expected global supplies.
"I think there is upside potential in corn as the market looks oversold, there could be some bargain hunting," said Lynette Tan, analyst with Phillip Futures in Singapore.

More rain seen for drought-hit Argentine grains
BUENOS AIRES, Jan 12 (Reuters) - Rains are expected in the northern part of Argentina's grains belt over the week ahead as temperatures fall, relieving soy and corn crops racked by drought, the Buenos Aires Grains Exchange said Thursday.
Weeks of dryness have toasted grains fields in the world's No. 3 soybean- and No. 2 corn-exporting country, prompting crop estimate cuts and denting hopes that Argentina could replenish corn supplies depleted by a lacklustre U.S. harvest.

Peru coffee exports hit record $1.55 bln in 2011
LIMA, Jan 12 (Reuters) - Coffee exports from Peru reached a record $1.55 billion in 2011, up from the $860 million exported in 2010, the country's national council of coffee producers said on Thursday.
The Andean country's production increased by 29 percent to 6.8 million 46-kg bags of coffee in 2011 as investments in fertilizer and plantation management for small-scale farmers paid off, Council President Cesar Rivas Pena said.

Brazil sugar output down 7 pct this season
BRASILIA, Jan 12 (Reuters) - Sugar output in Brazil's main center-south cane region reached 31.2 million tonnes from the start of the season to Jan. 1, down 7 percent from this time a year ago, the sugar cane industry association Unica said on Thursday.
Brazil's center-south cane crush has now all but finished and only a handful of mills are still operating, pending the start of the next harvest around March, which some analysts hope will expand output after this season's weather-battered crop.

Chinese cotton imports offset bearish USDA report
Jan 12 (Reuters) - China's cotton imports soared in December and the country will soon issue another import quota of 1.1 million tonnes (5 million 480-lb bales), offsetting the bearish impact of a U.S. crop report.
The U.S. Agriculture Department's monthly supply/demand report on Thursday raised world 2011/12 end-of-season cotton stocks to 58.35 million bales from 57.67 million.  

Brent rises above $111.50 on supply fears; debt sales support
SINGAPORE, Jan 13 (Reuters) - Brent crude rose above $111.50 a barrel, boosted by worries over supply disruption from Nigeria, while easing fears on the euro zone debt crisis after positive demand in Spanish and Italian debt sales supported sentiment.  
"Iran is perhaps a longer-term issue, meaning that it is not going to cause an immediate supply disruption," said Victor Shum of energy consulting firm Purvin & Gertz.

India to buy Iran oil despite US sanctions -minister
NEW DELHI, Jan 12 (Reuters) - India will keep doing business with Tehran and sees no reason to seek a waiver from the United States that would protect buyers of Iranian oil from a fresh round of sanctions, a senior Indian cabinet minister said on Thursday.
"Why should we seek waiver from the U.S.? We have done business with Iran earlier and will continue to do business," the minister, who has knowledge of the matter but did not want to be named as the issue is confidential, told Reuters.

London copper slips, China buys slow before break
SHANGHAI, Jan 13 (Reuters) - London copper slipped in Asian trading, snapping three days of gains, as buying by Chinese consumers of the industrial metal slowed before the start of the week-long Lunar New Year holidays.
"Maybe European debt issues will exacerbate copper during the Lunar new year, so consumers are not purchasing a lot of cathode. They are very cautious, they will just take profits," Qu said.

Xstrata unit says to appeal Philippines' denial of mine permit
MANILA, Jan 13 (Reuters) - Global miner Xstrata Plc's  Philippine unit said on Friday it was "extremely disappointed" with a government decision not to clear for now its planned $5.9 billion copper-gold Tampakan project, potentially the biggest in Southeast Asia.    
Sagittarius Mines Inc (SMI), operator of the Tampakan project and partly owned by Australian miner Indophil Resources NL , will appeal to the Department of Environment and Natural Resources (DENR) to reconsider its decision, which it said contradicted the government's earlier stance that the national law was superior to local policies.

LME CEO firm on fee hike, sale opposition hardens
LONDON, Jan 12 (Reuters) - London Metal Exchange (LME) CEO Martin Abbott held firm on a decision to hike trading fees that has hardened members' opposition to the potential sale of the world's top metals marketplace.
High-level members of the 130-year-old exchange say that the trading fee hike announced last month is window dressing to enhance the LME's attractiveness for potential suitors by steeply raising revenues.

Vale shares fall as rains halt some Brazil shipments
SAO PAULO, Jan 12 (Reuters) - Shares of Vale, the world's largest iron ore producer, seesawed on Thursday as traders waited for more news about the company's  decision to halt some iron ore shipments from Brazil.
Vale said late on Wednesday that heavy rain "created serious challenges to operations" in the state of Minas Gerais, the source of more than half its iron ore output. Rains tend to slow mining due to the risk of mudslides and accidents at open pit operations.

Poland's controversial mining tax gets key backing
WARSAW, Jan 12 (Reuters) - A key government committee in Poland has backed a proposed new mining tax after several ministries clashed over the controversial levy aimed at raising 1.8 billion zlotys ($511 million) for state coffers this year.
The bill, approved by the committee that prepares government legislation, must now receive final clearance from the government and parliament.

China aluminium smelters to keep output steady in Q1
HONG KONG, Jan 12 (Reuters) - Most of China's large aluminium smelters have no plans to cut production like the world's top global producers of the metal, with firm domestic prices encouraging steady output in the first quarter of 2012, smelter sources and analysts said on Thursday.
In the past week, Alcoa Inc  and Norsk Hydro , said they planned to reduce output due to low prices, raising expectations that smelters in China, the world's top aluminium producer, will follow.

PRECIOUS-Gold falls on easing euro zone fears
SINGAPORE, Jan 13 (Reuters) - Gold prices eased as fears about the health of the global economy abated after successful debt sales by Spain and Italy encouraged investors to put their money in riskier assets.
"The recent headlines from the euro zone and the United States have not offered signs of essential change on the fundamentals of those economies," said Hou Xinqiang, an analyst at Jinrui Futures.

US Gold Corp sees gold price over $2,000 this year
NEW YORK, Jan 12 (Reuters) - U.S. Gold Corp   Chief Executive Rob McEwen said he expects global financial worries to push gold prices above $2,000 an ounce this year and even higher in the next few years.
He also said major gold mining companies should increase dividends to attract investors. Shareholders currently are not getting the kind of returns they should expect with the gold price so high, he added.

METALS-London copper slips, China buys slow before break
SHANGHAI, Jan 13 (Reuters) - London copper slipped in Asian trading, snapping three days of gains, as buying by Chinese consumers of the industrial metal slowed before the start of the week-long Lunar New Year holidays.
"Maybe European debt issues will exacerbate copper during the Lunar new year, so consumers are not purchasing a lot of cathode. They are very cautious, they will just take profits," Qu said.

PRECIOUS-Gold falls on easing euro zone fears
SINGAPORE, Jan 13 (Reuters) - Gold prices eased as fears about the health of the global economy abated after successful debt sales by Spain and Italy encouraged investors to put their money in riskier assets.
"The recent headlines from the euro zone and the United States have not offered signs of essential change on the fundamentals of those economies," said Hou Xinqiang, an analyst at Jinrui Futures.

20120113 1532 Palm Oil Breaking News.


Palm Oil Drops as USDA Forecasts Bigger U.S. Soybean Supplies
2012-01-13 05:44:27.796 GMT


By Ranjeetha Pakiam
    Jan. 13 (Bloomberg) -- Palm oil fell to a two-week low,
heading for the first weekly loss in four, on speculation that a
bigger U.S. soybean crop will boost global cooking oil supplies.
    The March-delivery contract dropped as much as 1.4 percent
to 3,156 ringgit ($1,007) a metric ton on the Malaysia
Derivatives Exchange in Kuala Lumpur, the lowest since Dec. 30,
and ended the morning trading session at 3,160 ringgit in Kuala
Lumpur. Palm oil is set for a 1.6 percent decline this week, the
first drop since the five days ended Dec. 16.
    U.S. inventories of soybeans on Aug. 31, before this year’s
harvest, will be 20 percent larger than forecast a month ago at
275 million bushels, the most in five years, the U.S. Department
of Agriculture said in a report yesterday. The forecast was
raised for a third straight month and tops the 232 million
bushels forecast by analysts. The U.S. soybean crop was larger
than estimated a month ago, the government said.
    “The USDA is estimating higher production and the ending
stock is also estimated to be higher as well,” Ker Chung Yang,
an analyst at Phillip Futures Pte., said by phone from Singapore
today. “The palm market will come under pressure due to the
decline in the soybean market” yesterday, he said.
    Soybeans for March delivery dropped 1.7 percent to close at
$11.825 a bushel on the Chicago Board of Trade yesterday.
Futures traded 0.5 percent higher today at $11.8825 at 12:56
p.m. in Singapore. Soybean oil, a substitute for palm oil, for
delivery in March was little changed at 51.46 cents a pound.
    Soybeans have “underlying support” from concern that the
Argentine and Brazilian crops will be hit by hot, dry weather,
said Ker.
    Palm oil for delivery in September dropped as much as 1.2
percent to 8,042 yuan ($1,274) per ton on the Dalian Commodity
Exchange, while soybean oil for delivery in the same month slid
as much as 0.9 percent to 9,002 yuan a ton.

20120113 1457 Global Market & Commodities Related News.

GLOBAL MARKETS-Shares gain as strong debt sales ease risk aversion
TOKYO, Jan 12 (Reuters) - Asian shares rose to a one-month high and the euro clung near its strongest in a week on Friday as strong demand for Spanish and Italian debt sales tempered risk aversion ahead of another auction from Rome later in the day.  "Market risk appetite continues to be stable despite the more mixed news that has emerged over the past 24 hours," largely owing to the ECB and the auctions, analysts at Barclays Capital said in a research note.

COMMODITIES-Oil dives on delayed Iran embargo news, grains sink
NEW YORK, Jan 12 (Reuters) - Commodities fell broadly on Thursday, with oil tumbling in a late sell-off on the latest report that Europe would phase in a ban on imports of Iranian crude, while grains slumped on disappointing U.S. supply and planting estimates.  "The trade was coming in looking for some pretty bullish   numbers for the corn market. We did not get that," said Terry   Roggensack, analyst with The Hightower Report, referring to the crop estimates released by the U.S. Department of Agriculture.

Oil falls on Iran embargo phase-in plan
NEW YORK, Jan 12 (Reuters) - Oil prices tumbled on Thursday in a late sell-off sparked by a report that a proposed European Union ban on imports of Iranian crude would be phased in over six months, reinforcing news already published by Reuters.   "It's not surprising to me that the European Union would delay the Iranian embargo as doing it now would have come at the worse possible time, amid austerity measures being taken as they have a lot of economic problems," said Peter Beutel, president of trading consultants Cameronhanover.com in New Canaan, Connecticut.

Natural gas settles lower, prices hit 28-month low
NEW YORK, Jan 12 (Reuters) - U.S. natural gas futures ended lower on Thursday, as mild winter weather and record high supplies drove the front-month contract down for a fourth day to another 28-month low in spite of a weekly inventory draw that beat consensus expectations.  "We're looking at record storage at the end of winter, and as inventories approach 4 tcf by next winter, we could see problems handling all that gas," said Teri Viswanath, director of commodity research at BNP Paribas in Houston.

Euro Coal-Prices dip $1, ignoring oil's rise
LONDON, Jan 12 (Reuters) - Prompt South African physical coal prices dropped by around $1.00 a tonne on Thursday on weak buying in Europe and Asia and a loosening of the South African supply tightness see earlier this month.  "Renewables are providing more power in countries where they can make a difference, apart from Spain and Italy where the burn has been good and everybody's sitting on stockpiles of coal," one European utility source said.

20120113 1034 Local & Global Economic Related News.

Economy: Malaysia on track to achieve 5% to 6% growth this year
Malaysia is on track to attain 5% to 6% growth this year, fuelled by an upsurge in domestic  investments, despite the uncertain global economic climate. International Trade and Industry  Minister Datuk Seri Mustapa Mohamed said Malaysia started pro-active initiatives to spur  domestic investments since 2010 and this year the government would pay more attention to  stimulate domestic investments, especially from the Chinese community, to realise the  target. However, the euro debt crisis in Europe and the recession in the United States would  be the main worry for the global market and Malaysia, being a trading nation, was no  exception. Mustapa, however, stressed that foreign investments would continue to be the  hallmark for Malaysia's GDP growth this year. (Bernama)

Economy: 2011 commodity exports to reach RM130bn
Minister of Plantation Industries and Commodities Tan Sri Bernard Dompok said commodity  exports for 2011 is expected to reach RM130bn, compared to RM113.2bn in 2010. He said  Malaysia managed to achieve RM118.2bn in commodity exports for the period of Jan to Oct 2011. The Minister added that there was a potential for an increase in palm oil production  this year due to growing maturity of plantations. He also noted that CPO prices at the range  of RM3,200 per tonne was favourable. (Financial Daily)

Indonesia: Holds rate as currency drop revives inflation risk
Indonesia kept interest rates unchanged for a second month, extending a pause in monetary easing after a weaker rupiah and a government plan to contain fuel subsidies threatened to spur inflation. Bank Indonesia kept the reference rate at 6%, Governor Darmin Nasution said yesterday. The rupiah slid more than 6% against the dollar in the past six months after rate cuts in October and November made Indonesia one of the first Asian nations to reduce borrowing costs last year. While inflation has eased, policy makers need to watch the impact of a possible increase in fuel prices as the government may limit subsidies in 2012, central bank Deputy Governor Hartadi Sarwono said this month.(Bloomberg)

China: Inflation cools to 15-month low
China’s inflation cooled to a 15- month low and producer-price gains were the smallest in two years in December, leaving the government more room to support growth as a global slowdown hurts exports. Consumer prices rose 4.1% from a year earlier, the National Bureau of Statistics said yesterday. Yesterday’s data may allow Premier Wen Jiabao to proceed with a shift in policy focus to bolstering expansion as Europe’s debt crisis crimps overseas demand and officials sustain a campaign to cool property prices. Imports and exports increased the least in two years last month, excluding seasonal distortions, and a report next week may show the world’s second-largest economy expanded at the slowest pace in 10 quarters.(Bloomberg)

India: Production rebounds, giving RBI scope to hold rates
India’s industrial production rebounded from the worst month since March 2009, a sign consumer demand is withstanding record interest-rate increases. Output at factories, utilities and mines increased 5.9% in November from a year earlier after a revised 4.7% decline in the previous month, the Central Statistical Office said in a statement yesterday. The data gives scope for the Reserve Bank of India to keep borrowing costs unchanged on 24 Jan for a second straight month to help fight inflation. (Bloomberg)

Europe: Industrial output declines for a third Month
Euro-area industrial production declined for a third straight month in November, adding to signs that the economy failed to expand in the fourth quarter as leaders struggled to quell the region’s fiscal crisis. Production in the 17-nation euro area fell 0.1% from October, when it dropped a revised 0.3%, the European Union’s statistics office said yesterday. In the UK, output fell for a second month in November as the weakening economy curtailed demand for metals, wood and paper products. Europe’s economy is edging toward a recession as governments toughen budget cuts, eroding consumer spending, and global export demand weakens. Economic confidence dropped to the lowest in more than two years in December and manufacturing contracted. (Bloomberg)


EU: ECB holds rates at 1% and waits for policy to work
The ECB left interest rates on hold on Thursday, pausing to assess the impact of back-to-back cuts and a slew of other measures it unleashed late last year that are showing some signs of helping fight the euro zone debt crisis. The ECB, holding its first policy meeting of this year, held its benchmark rate at 1.0%, matching the lowest level ever. The decision was in line with market expectations.  Financial markets showed little reaction. The euro and benchmark German bund futures were both unmoved by the decision. (Reuters)

UK: May resist adding stimulus for now
Bank of England Governor Mervyn King may refrain from adding to emergency stimulus again  as policy makers await new forecasts and the economy showed some resilience heading into 2012. The Monetary Policy Committee will maintain its 275bn-pound ($421bn) bond-purchase target after a meeting in London, according to all but one of 41 economists in a Bloomberg News survey. (Bloomberg)

Italy: Bond yields down sharply at 1-year auction
Italy paid less than half compared with a month ago to sell 1-year bills at its first auction of 2012 on Thursday, highlighting continued support for its short-term debt from cheap funds the ECB injected last month. The yield on Italian 12-month bills fell to 2.735%, from the near 6% yield Italy paid to sell one-year paper at a mid-Dec auction. The 10-year yield spread between Italian and German bonds fell below 500 bps for the first time this year. Italy sold 8.5bn euros ($10.78bn) of 12-month BOT bills and 3.5bn euros of bills maturing at the end of May. Italy will launch its 2012 bond issuing campaign on Friday when it offers up to 4.75bn euros of debt including its three-year benchmark and two off-the-run issues. (Reuters)

US: Consumer comfort reaches highest level in six months
Consumer confidence in the U.S. last week reached the highest level since July as the improving job market helped allay pessimism. The Bloomberg Consumer Comfort Index was minus 44.7 in the period ended 8 Jan from minus 44.8 the prior week. As recently as October, the index registered its lowest readings since the 2007-2009 recession, making 2011 the second-worst year in 25 years of data. It’s since increased in four of the past five weeks. Less unemployment and growing payrolls may be lifting consumers’ moods, providing the spark for increases in consumer spending, which accounts for about 70% of the economy. Nonetheless, gasoline prices that are once again rising and wage gains that fail to keep pace with inflation may be obstacles to greater improvement in confidence. (Bloomberg)

US: Jobless claims climb more than forecast last week
More Americans than forecast filed applications for unemployment benefits last week, raising the possibility that a greater-than-usual increase in temporary holiday hiring boosted December payrolls. Jobless claims climbed by 24,000 to 399,000 in the week ended 7 Jan. The number of people on unemployment benefit rolls rose, while those receiving extended payments decreased. Hiring by package delivery companies and retailers during the holidays to meet demand for gifts may now be giving way to an increase in dismissals. At the same time, claims figures are subject to greater volatility during this time of year, as the government has trouble adjusting the data for the seasonal swings in employment. (Bloomberg)

US: Retail sales in increase less than forecast
Sales at US retailers rose less than projected in Dec, confirming forecasts for a slowdown in consumer spending at the start of 2012. The 0.1% gain in purchases last month followed a 0.4% increase in Nov, according to figures from the Commerce Department.  The median estimate in a Bloomberg News survey called for a 0.3% rise. Another report showed more Americans than projected filed claims for jobless benefits last week.  The slowdown in demand means households are looking to rebuild savings after spending jumped early in the fourth quarter, showing further job gains are needed to fuel purchases. (Bloomberg)

20120113 1027 Malaysia Corporate Related News.

CIMB to conclude negotiations for Philippines' Bank of Commerce
CIMB Group Holdings group chief executive Datuk Seri Nazir Razak hopes to conclude negotiations with brewer San Miguel Corp on the acquisition of a stake in Philippines' Bank of Commerce within the current quarter (1Q2012). Nazir remained mum about the stake size and cost of acquisition, saying that there are no definitive details as yet because both parties are still in negotiations. (StarBiz)

Is RHB-MBSB merger on?
With the merger plans of RHB Capital and OSK Holdings coming closer, the question arises again as to whether the former will contemplate a takeover of Malaysia Building Society (MBSB), a non-bank lender to civil servants. This talk arose from speculation last October that the EPF was mulling over a move to merge both businesses following an announcement by RHBCap last September that it had written to BNM seeking permission to start talks with OSK. EPF holders a 44.8% stake in RHBCap and 65.5% stake in MBSB. (StarBiz)

Sime to intervene in E&O minority’s suit against SC
Sime Darby has received the green light to intervene in a legal challenge that an Eastern & Oriental (E&O) minority shareholder has filed against the Securities Commission (SC). Sime Darby has just acquired a 30% stake in E&O. Sime Darby said the court had allowed a bid by its unit, Sime Darby nominees SB, to intervene in the judicial review application by E&O minority shareholder Michael Chow Keat Thye against the SC.(Financial Daily)

AirAsia X to withdraw flights to four cities
The long-haul budget carrier yesterday announced that it would be withdrawing its services to Mumbai by next month, while flights to New Delhi, London and Paris will all stop in late March. All passengers affected by the route cuts will be given the option of either flying on an alternative airline, obtain a full refund or be re-routed to another AirAsia X destination. It is understood that passengers opting for an alternative airline will be transferred to Malaysia Airlines. (BT)

Bina Puri confirms talks with Pakistan over highway privatization deal
Bina Puri is negotiating the financial and legal aspects of a privatization concession agreement with the National Highway Authority in Islamabad, Pakistan. It had received the letter of intent from the highway authority. The letter of intent was for the conversion of existing four-lane Karachi-Hyderabad super highway into a six-lane motorway on a build, operate and transfer (BOT) basis.(Financial Daily)

SapCrest buys 2 pipelay vessels
SapuraCrest Petroleum’s wholly-owned units TL Offshore PLSV1 Ltd and TL Offshore PLSV2 Ltd have entered into contracts with IHC Offshore and Marine BV for the construction and purchase of two 550-tonne piplelay support vessels.(Financial Daily)

Proton: Khazanah told bidders to show proof of funding
Sources familiar with the issue said that Khazanah Nasional Berhad has asked the interested  bidders for their stake in Proton to show proof of funding by next week. It is learnt that the  sovereign wealth fund has set aside appointment dates for the whole of next week to assess  the funding mechanisms of the various bidders. While the dates are nto certain, it is  undertstood that Tan Sri Syed Mokhtar Al-Bukhary’s DRB-Hicom will meet with Khazanah in  the middle of the week while Datuk Seri Nadzmi Mohd Salleh is likely to meet Khazanah  earlier in the week. (Financial Daily)

Felda: Should have only one strategic partner
Sources said that Felda Global Ventures should ideally have only one strategic global partner,  although talks are ongoing with several parties. A source said the partner would bring in the  know-how and capabilities in the downstream activities. The source added that the purpose  of the strategic partner is to grow the business across the value chain from being too reliant  on upstream to mid-stream and downstream. (Bernama)

QSR: Tabung Haji says no invite from MCCM for joint acquisition
Tabung Haji MD and CEO Datuk Paduka Ismee Ismail said Lembaga Tabung Haji (Tabung Haji)  has not received any invitations from the Malay Chamber of Commerce Malaysia (MCCM) to  jointly acquire Kulim Bhd's stake in QSR Brands Bhd. Ismee was speaking to reporters on the  sidelines of the Cross Fertilisation and Cross Assignment programme handover to Talent  Corporation Malaysia Bhd (TalentCorp) Tuesday. (Business Times)

TM: Keen to put in bid for DTTB
Telekom Malaysia is keen to submit its bid for the Digital Terrestrial Television Broadcasting  (DTTB) when the request for proposal is made,  possibly by the end of  1Q 2012. TM group  CEO said the company would like to see the RFP first in order to determine the extent of the  role that TM can play.  According to sources, for those wanting to submit a proposal, one of  the requirements is for them to have a technical partner. TM is still looking for one as the  previous party it was talking to, Broadcast Australia has since teamed up with Celcom Axiata  Bhd.  (Starbiz)

Manulife: Eyes 15% rise in customer base
Manulife Malaysia expects to see an improvement of between 10-15% in its customer base  by year-end through enhanced promotional efforts. Its latest initiative is the Manulife  branding on the Kuala Lumpur hop-on-hop-off tourist bus.  Manulife Malaysia group  CEO Michael Chan Yui Lung said that the company also wants to increase their presence in Sabah  and Sarawak while sustaining growth in key areas of Peninsular Malaysia. Commenting on  plans for Manulife Malaysia in 2012, he said in addition to Sibu and Kuching, the company  intends to expand its footprint with a new office in Kota Kinabalu. (Business Times)

MBM Resources: 78% owned OMI invests RM103m in alloy wheel plant
MBM Resources’ subsidiary Oriental Metal Industries (OMI) is investing RM103m in an alloy  wheel manufacturing factory in Rawang, with the annual capacity to produce 1m units. MBM  Resources said the investment would see its 78% owned OMI becoming the largest Tier-1  integrated wheel manufacturer in the country. MBMR  MD Looi Kok Loon said  they are  targeting to export about 35% of their products. MBM Resources said phase one of the  project, which is next to OMI’s existing wheel module assembly plant, was scheduled to be  completed by the 4Q 2012 and fully completed by 3Q 2015. (Financial Daily)

Takaso: To tap Papua New Guinea timber sector
Takaso Resources, which is considering to acquire Kayumas (PNG) Ltd, can look forward to an  estimated net profit of US$72m (RM226m) over a  9-year period from the latter's logging  project in Papua New Guinea. Takaso director Chin Boon Kim said the company will be  conducting a due diligence over the estimates and if all goes well including approvals from  shareholders, it will finalise the proposed acquisition within 3 months. He also said that once  the deal is signed, Takaso will fork out RM6.5m as working capital in stages. Chin added that  the acquisition cost of Kayumas and the type of fund-raising exercise will be determined  once Takaso finalises the percentage of Kayumas shares it intends to acquire. (Business  Times)

Tebrau Teguh: Land sale 143% above NBV of RM11.6m
Tebrau Teguh is disposing of two parcels of commercial land in Plentong, Johor for RM28.3m,  which is estimated to be RM16.67m or 143.7% above the NBV of RM11.6m as at Dec 31,  2010. The company said the RM28.3m was based on a valuation report by Messrs. Raine  Horne International Zaki + Partners dated June 17, 2011.  The total net book value as per  audited financial statements for the year ended Dec 31, 2010 is RM11.6m. (Financial Daily)

Supermax: 340m bonus shares to go ex on Jan 26
Supermax Corporation’s 340.1m new bonus shares will go ex on Jan 26. The company said  the shares were issued on a one-for-one basis. The entitlement date is Jan 30. (Financial  Daily)

Konsortium Transnational: Eyes 60,000 passengers by 2013
Konsortium Transnasional Bhd (KTB) targets to double its Nice Executive Coach membership  to 50,000 from 25,000 currently by the end of the year.KTB executive director and  COO  Tengku Hasmadi Tengku Hashim said the target would be driven by its luxury coach with onboard tablet infotainment system.  Nice Executive Coach is the first public transportation  company to install the RM20m state-of-the-art infotainment system in Malaysia. By the end  of 1Q 2012, a total of 45 Nice Executive coaches will be installed with the Blue ICE on-board  infotainment system, followed later by 150 Plusliner and Transnasional coaches. The tablet is  mounted at the back of every seat, allowing the passenger to watch movies, listen to music,  play games, browse the internet and read the  news and more while travelling.  (Business  Times)

Faber Group: Subsidiary faces RM11.2m suit from sub-contractor
Faber Group’s subsidiary Faber LLC is facing a suit from a sub-contractor, Sweet Home  Technical Works LLC, for services provided for housing projects in Abu Dhabi. Faber said that  it had received a statement of claim dated Jan 10 for AED13.12m (RM11.2m), which Faber  LLC is disputing. It also said that the Al Dhafra Court of First Instance, Justice Department,  Emirate of Abu Dhabi had fixed the hearing of the statement of claim on Monday, Feb 6,  2012. (Financial Daily)

TatGiap acquires 60% stake in Buminox
Tatt Giap Group Bhd has acquired a 60% stake in Buminox Sdn Bhd for a total cash consideration of RM3.6m. Upon completion of the proposed acquisition, Buminox shall be a 60% subsidiary of TatGiap. The cost for the proposed acquisition will be funded internally. (Business Times)

Atlan 3Q net profit dips 9.9% to RM8.33m
Atlan Holdings Bhd net profit for the third quarter ended Nov 30, 2011 fell 9.9% to RM8.33m from RM9.25m a year earlier, mainly due to lower revenue in the duty free segment. Its revenue for the quarter dipped 5.35% to RM177.57m from RM187.63m in 2010. (The Edge)

TAS Offshore’s earnings improve, RM2.2m net profit in 2Q
TAS Offshore Bhd’s earnings continued to improve, with net profit of RM2.227 million in the second quarter ended Nov 30, 2011 compared with net loss of RM184,000 a year ago, boosted by sale of its tugboats under construction. (The Edge)

20120113 1009 Global Market Related News.

Asia Stocks Rise on Europe Optimism (Source: Bloomberg)
Asian stocks rose, with a regional benchmark index poised for its highest close in a month, as a drop in Italian and Spanish borrowing costs added to optimism the European Central Bank is averting a credit crunch in financial markets. Canon Inc. (7751), a camera maker that gets a third of its sales in Europe, climbed 2.3 percent in Tokyo. Inpex Corp., Japan’s largest energy explorer, gained 1.6 percent after saying it and partner Total SA will build a $34 billion liquefied natural gas facility in Australia. BHP Billiton Ltd., the world’s largest mining company, rose 1.5 percent in Sydney after copper futures increased.
Once concern about Europe’s debt crisis is “lifted at least in the short-term, we should see some good performance in Asian equity markets,” said Diane Lin, a fund manager with Sydney-based fund Pengana Capital Ltd., which manages about $1.1 billion in global assets. ECB policy makers “have stabilized the whole situation. There’s a lot of bonds to be issued by European governments in the short-term. It is important for them to be able to refinance all those papers.”

U.S. Stocks Rise Amid Lower Borrowing Costs at Europe Auctions (Source: Bloomberg)
U.S. stocks rose, sending the Standard & Poor’s 500 Index higher for a fourth day, as a drop in borrowing costs at auctions in Europe overshadowed disappointing American jobless claims and retail sales data. Alcoa Inc. (AA) and Caterpillar Inc. rallied at least 2.3 percent, pacing gains among the biggest companies. Target Corp. (TGT) added 1.6 percent as the discount retailer said it will buy back as much as $5 billion of its shares. Energy companies slumped as oil sank and Chevron Corp. (CVX) lost 2.6 percent after reporting fourth-quarter profit was “significantly below” the previous period. Bank of America Corp. (BAC) dropped 1.2 percent. The S&P 500 rose 0.2 percent to 1,295.50 at 4 p.m. New York time, erasing a decline of as much as 0.5 percent. The benchmark gauge for American equities gained 1.4 percent in four days to the highest since July 28. The Dow Jones Industrial Average added 21.57 points, or 0.2 percent, to 12,471.02 today.

Retail Sales Miss Forecasts in Sign Further U.S. Job Gains Needed: Economy (Source: Bloomberg)
Sales (RSTAMOM) at U.S. retailers rose less than projected in December, confirming forecasts for a slowdown in consumer spending at the start of 2012. The 0.1 percent gain in purchases last month followed a 0.4 percent increase in November, according to figures from the Commerce Department released today in Washington. The median estimate in a Bloomberg News survey called for a 0.3 percent rise. Another report showed more Americans than projected filed claims for jobless benefits last week. Merchants like Williams-Sonoma Inc. (WSM) cut prices during the most important shopping season of the year amid concern stagnant wages and lower property values would hold customers back. The slowdown in demand means households are looking to rebuild savings after spending jumped early in the fourth quarter, showing further job gains are needed to fuel purchases.

U.S. Consumer Confidence at Highest in Six Months, Bloomberg Index Shows (Source: Bloomberg)
Consumer confidence in the U.S. last week reached the highest level since July as the improving job market helped allay pessimism. The Bloomberg Consumer Comfort Index (COMFCOMF) was minus 44.7 in the period ended Jan. 8 from minus 44.8 the prior week. As recently as October, the index registered its lowest readings since the 2007-2009 recession, making 2011 the second-worst year in 25 years of data. It’s since increased in four of the past five weeks. “Considering where it’s been, the trend is a welcome one,” Gary Langer, president of Langer Research Associates LLC in New York, which compiles the index for Bloomberg, said in a statement. “Sentiment is hardly on a predictable path, given factors including the uncertainty of the 2012 presidential election, volatility in global markets and economic question marks from Europe to China.”

Jobless Claims in U.S. Rose More Than Forecast (Source: Bloomberg)
More Americans than forecast filed applications for unemployment benefits last week, raising the possibility that a greater-than-usual increase in temporary holiday hiring boosted December payrolls. Jobless claims climbed by 24,000 to 399,000 in the week ended Jan. 7, Labor Department figures showed today in Washington. The median forecast of 46 economists in a Bloomberg News survey projected 375,000. The number of people on unemployment benefit rolls rose, while those receiving extended payments decreased. Hiring by package delivery companies and retailers during the holidays to meet demand for gifts may now be giving way to an increase in dismissals. At the same time, claims figures are subject to greater volatility during this time of year, as the government has trouble adjusting the data for the seasonal swings in employment.

Fed Officials Divided Over Easing as They Prepare Interest Rate Forecasts (Source: Bloomberg)
Federal Reserve officials disagreed on the need for more easing amid signs of improvement in the economy that may shape the interest-rate forecasts they will reveal for the first time this month. Chicago Fed President Charles Evans in a speech yesterday said economic growth is modest and called for “substantial” accommodation. During the past week, New York Fed President William Dudley, Boston’s Eric Rosengren and San Francisco’s John Williams have also backed consideration of a third round of bond buying. The calls preceded release of the Fed’s Beige Book report on regional economies, which indicated the expansion improved last month in most of the U.S. on increased holiday retail sales, demand for services and oil and gas extraction. Other data in the past week showed the unemployment rate dropped to the lowest level in nearly three years and consumer credit jumped.

Geithner Gets Japan Backing on Iran After China Snub (Source: Bloomberg)
U.S. Treasury Secretary Timothy F. Geithner’s efforts to tighten economic sanctions on Iran over its nuclear program won backing from Japan after China rejected limiting oil imports from the country. “We want to take concrete steps to reduce our share in an orderly way as soon as possible,” Finance Minister Jun Azumi said at a joint press conference in Tokyo yesterday with his U.S. counterpart. “The world cannot tolerate nuclear development.” Geithner’s meetings were part of a trip to Asia’s two largest economies aimed at building support for tighter Iranian economic sanctions after international monitors detected an acceleration in the nation’s nuclear development program. China, which counts Iran as one of its top petroleum suppliers, snubbed the U.S. this week, with a vice foreign minister saying his nation “opposes imposing pressure and sanctions.”

China Gets Cheaper Iranian Oil as U.S. Pays for Strait of Hormuz Patrols (Source: Bloomberg)
China stands to be the biggest beneficiary of U.S. and European plans for sanctions on Iran’s oil sales in an effort to pressure the regime to abandon its nuclear program. As European Union members negotiate an Iranian oil embargo and the U.S. begins work on imposing sanctions to complicate global payments for Iranian oil, Chinese refiners already may be taking advantage of the mounting pressure. China is demanding discounts and better terms on Iranian crude, oil analysts and sanctions advocates said in interviews. “The sanctions against Iran strengthen the Chinese hand at the negotiating table,” Michael Wittner, head of oil-market research for Societe Generale SA in New York, said in a phone interview. While there are no confirmed numbers, Chinese refiners are likely to win discounts on Iranian crude contracts as buyers from other nations halt or reduce their purchases of Iranian oil to avoid being penalized under U.S. and European sanctions, he said.

India Industrial Output Rebounds, Giving Central Bank Scope to Hold Rates (Source: Bloomberg)
India’s industrial production rebounded from the worst month since March 2009, a sign consumer demand is withstanding record interest-rate increases. Output (INPIINDY) at factories, utilities and mines increased 5.9 percent in November from a year earlier after a revised 4.7 percent decline in the previous month, the Central Statistical Office said in a statement in New Delhi today. The median of 27 estimates in a Bloomberg News survey was for a 2.1 percent gain. Manufacturing in India and China improved in December, according to the Purchasing Managers’ Index, showing the world’s fastest-growing major economies have so far been resilient to Europe’s debt crisis. Today’s data gives scope for the Reserve Bank of India to keep borrowing costs unchanged on Jan. 24 for a second straight month to help fight inflation.

Draghi Says Debt-Crisis Strategy Is Working as ECB Postpones ‘Armageddon’ (Source: Bloomberg)
European Central Bank President Mario Draghi says his strategy for battling Europe’s debt crisis is starting to work. The ECB’s massive injection of cash into the financial system last month is beginning to lubricate seized credit markets and there are “tentative signs” of economic stabilization in the euro area, Draghi said in Frankfurt yesterday. While “substantial downside risks” remain, he pointed to falling yields on Italian and Spanish debt this week. That may mitigate the need for further interest rate cuts in the short term and muffle calls for the ECB to step up its government bond purchases. While the 17-nation euro region is still in danger of sliding into recession after the debt crisis spread to Italy and Spain, driving up borrowing costs and hurting the export markets of stronger economies such as Germany, recent data suggest the worst may be over.

Draghi Says Europe Credit Crunch Averted as Signs of Stabilization Emerge (Source: Bloomberg)
European Central Bank President Mario Draghi said the bank has averted a serious credit shortage and there are signs the economy is stabilizing, signaling policy makers may resist cutting interest rates further for now. “According to some recent survey indicators, there are tentative signs of stabilization of economic activity at low levels,” Draghi said at a press conference in Frankfurt today after the ECB kept its benchmark interest rate at 1 percent following two straight reductions. While the debt crisis poses “substantial downside risks” to the economic outlook and the ECB remains “ready to act,” Draghi gave no indication that another rate cut is imminent. With the euro area on the brink of a second recession in three years, some signs of economic resilience have given the ECB room to assess the impact of its stimulus measures to date, which include lending a record amount of cash to banks. Draghi said those loans prevented a “serious” credit contraction.
He also noted that borrowing costs for governments across the 17- nation region have dropped.

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.

20120113 1009 Global Commodities Related News.

Corn (Source: CME)
US corn futures tumble Thursday after the USDA issues much larger-than-expected supply estimates. Although the USDA's changes from last month were not huge, traders had widely been expecting supply cuts. Instead, the USDA raised its 2011 crop estimate and 2012 world stockpile projection, while leaving its US inventory projection unchanged. Traders were leaning the wrong way headed into the report, and the market plunged limit down shortly after the open and stayed there most of the day. The market is expected to fall again Friday, although worries about South America's crop and a looming three-day holiday weekend could add some uncertainty. CBOT March corn ends down 40c, or 6.1%, to $6.11 1/2. Friday's trading limit will be expanded to 60c.

Wheat (Source: CME)
US wheat futures stumbled on spillover pressure from corn as the grains complex succumbed to larger-than-expected USDA supply estimates. The market was driven lower by corn, which tumbled on the new forecasts. Estimates weren't as bearish for wheat, although the government did estimate winter-wheat plantings well above analysts' expectations. That's why it, traded in Chicago and Kansas City, fell more sharply than Minneapolis spring wheat. Some traders question the USDA's soft red-winter-wheat estimate and say that the hard red-winter-wheat acreage doesn't reflect what will actually be harvested. CBOT March wheat ends down 36c at $6.05 a bushel while KCBT March slides 28 3/4c to $6.73. MGEX March falls just 9c to $8.07 1/2.

Rice (Source: CME)
US rice futures fell Thursday on spillover pressure from other grains and the USDA's supply and demand update. Grains generally, and corn in particular, tumbled on the USDA's reports, which showed more supplies than expected. For rice, the USDA hiked projected 2011-12 long-grain ending stocks to 20.6 million hundredweight from 17.6 million despite lowering production. The production cut was more than offset by weaker domestic and export demand, a theme that has weighed on prices throughout the past several months. CBOT March rice ends down 23c to $14.57 a hundredweight.

U.S. soy edges up after tumble on Argentine rains
SYDNEY, Jan 12 (Reuters) - U.S. soy futures were a touch higher in early Asian trade , ticking up after posting their steepest fall in 1-/12 months overnight on news of rain in Argentina aiding the drought-stressed crop.
Showers in Argentina are expected to bring 1 to 2 inches of rain to heat-stressed corn and soybeans, benefiting the developing soy crop more than the corn crop, easing soy supply worries.

Russia Deputy PM says grain exports reach 18.6 mln T -RIA
MOSCOW, Jan 11 (Reuters) - Russian grain exports from July 1 have reached 18.6 million tonnes, First Deputy Prime Minister Victor Zubkov said on Thursday.
"Russia has returned to the ranks of top grain exporters, literally today exports reached 18.6 million tonnes," the official was quoted by RIA news agency as saying.

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.

Ukraine grain exports rise 22.4 pct in Dec vs Nov
KIEV, Jan 11 (Reuters) - Ukraine's grain exports rose to 2.454 million tonnes in December 2011 from 2.005 million in November, analyst UkrAgroConsult said on Wednesday.
The consultancy said in a report the volume included 1.975 million tonnes of maize, 367,100 of wheat and 82,800 of barley.

Ukraine '12 grain harvest could fall 22 pct-minister
KIEV, Jan 11 (Reuters) - Ukraine's 2012 grain harvest may fall to between 44 and 46 million tonnes from a record 56.4 million tonnes in 2011 due to a drought during sowing, Farm Minister Mykola Prysyazhnyuk said on Wednesday.
Prysyazhnyuk told Reuters that a fall in the 2012 wheat harvest to about 12 million tonnes was the main reason for the decrease in the grain crop this year. Ukraine harvested 22.4 million tonnes of wheat in 2011.  -

US Crop Report Triggers Price Falls (Source: CME)
Higher global grain supplies could signal more downward pressure on food prices after an influential U.S. government report pointed to larger-than-expected domestic stocks and lifted harvest estimates for Europe and Asia. A raft of monthly and quarterly reports released Thursday by the U.S. Department of Agriculture eased concerns about the impact of drought on crops in South America, sending ripples through the agribusiness sector as grain futures fell sharply. The reports came as a United Nations agency said that its global index of food commodity prices hit a record high last year, though it fell 2.4% in December because of bumper crops, slowing demand and the stronger U.S. dollar. The U.S. government's outlook for corn supplies caught most traders by surprise as the USDA said farmers harvested 12.36 billion bushels in 2011, up slightly from its December estimate.
Traders were widely expecting a decrease that would further reflect last year's volatile weather across the Midwest, which included unusually severe spring flooding and then a July heat wave. Stock prices for fertilizer and farm equipment suppliers slipped Thursday because investors fear that falling grain prices will take some steam out of the red-hot U.S. farm economy. The prospect of cheaper livestock feed costs, however, lifted the stocks of meat companies even though grain prices remain far higher than historical levels. The grain markets will remain volatile because the carryout is still very tight," said Mike Cockrell, chief financial officer of Laurel, Miss., chicken company Sanderson Farms Inc. (SAFM), whose shares rose more than 7% in the wake of the USDA reports. The USDA reports show that global grain inventories still remain tight by historical standards, which is why some analysts continue to expect U.S. grain farmers will generate record high revenue from their 2011 crops.
The agency projected world corn supplies by the end of the U.S. summer at 128.1 million metric tons, up nearly one million tons from its December estimate, despite analyst forecasts that it would drop by at least 4 million tons. While the USDA projected a smaller Argentina corn crop due to drought, those losses are offset by larger supplies in China and the Ukraine, the USDA said. Most of the USDA's changes to its grain forecasts were relatively small, but still triggered big price moves in part because tight corn supplies have traders and food executives on edge. Corn prices fell to their daily limit, with the March delivery contract at the Chicago Board of Trade down 40 cents at $6.11 1/2 per bushel. "The price reaction says more about the psychology of the markets than any fundamental change in supply and demand," said Michael Swanson, an economist at Wells Fargo & Co. (WFC).
However, the response could have "a major impact" this spring if they discourage farmers from planting as much corn as expected, said Joe Vaclavik, analyst with Straits Financial in Chicago. CBOT wheat futures closed down 36 cents, or 5.6%, to $6.05 a bushel, while CBOT soybeans closed down 20 1/2 cents to $11.82 1/2 a bushel. Futures prices remain well above historical levels due to worries about the South American crop and tight U.S. supplies. But with profits sinking at many corn-to-fuel ethanol plants, and many livestock producers operating at a loss, prices are going to have to drop to avoid a supply glut, Vaclavik said. "That demand, if we stay at these prices, is going to get choked off to an extent that we're going to have more corn than we know what to do with," he said. The U.S. government's estimates were also considered negative for wheat and soybean prices. The USDA increased its projected world wheat stockpile estimate due to higher production in Kazakhstan, Brazil and Russia.
It also estimated U.S. winter wheat plantings at 41.9 million acres, up from 40.7 million a year ago despite concerns about severe drought in the southern Plains and wet weather in the eastern Midwest that kept farmers out of their fields this fall. The government also raised U.S. export projections for wheat and corn. Market analysts were generally not expecting USDA to make any changes to domestic soybean supply estimates, but government forecasters said production was stronger than previously expected. The USDA raised its soybean production estimate slightly, adding that exports and the annual soybean crush would be weaker than expected, pushing projected stockpiles this year up to 275 million bushels. The December forecast was for 230 million bushels.

Thailand Won't Subsidize Rice Exports (Source: CME)
Thailand's rice procurement program has boosted growers' earnings but the government is undecided on having similar programs for other crops, despite strong demand, particularly from rubber planters, Deputy Prime Minister and Minister of Commerce Kittiratt Na-Ranong said Thursday. He also categorically ruled out any subsidies for exports or domestic sales of rice after having guaranteed a price of THB15,000 a metric ton, well above market rates, for the growers. The deputy prime minister's comments provide a crucial insight into the government policy because the clamor is rising for creating a rubber stockpile to boost prices on the one hand and to subsidize rice sales for giving a push to exports and checking domestic inflation on the other. "Every crop has a different cost of production and we are yet to study if any minimum price needs to be guaranteed to producers of commodities such as rubber, cassava and pineapples," the minister said at a media briefing.
Thailand is the world's biggest exporter of natural rubber. Prices have slumped following a global economic slowdown, prompting many growers to take to the streets in protest. "It is not a policy of the government to negotiate with protesters on the street, but we can consider their grievances by meeting their representatives," the minister said. He said a panel headed by him to discuss these demands will likely meet Tuesday. Thailand's agriculture ministry favors the creation of a 200,000-ton stockpile to shore up USS3 prices to about THB120/kg from THB94/kg now. "But we need to first check whether the issues involved are directly related to price or other factors are involved," the minister said. Besides, the price of THB120/kg may be acceptable to planters in the south--which produces most of the country's natural rubber--but not to growers elsewhere, he said. The government's aim is not to create stockpiles but ensure a reasonable income to growers, the minister said.
He added that state procurement of rice is way below expectations and only around 25% of the output is finding its way into the stockpile, with the rest being traded in the open market. This shows that setting the government procurement price 50% above market rates has prompted private traders to buy at higher prices as well, he said. However, this has made Thai rice exports uncompetitive, with prices at least $100/ton higher than sales by India and Pakistan, leading to demands that the government should sell rice to exporters at lower rates but the minister ruled it out. Earlier policy of paying the differential between government-set price and market rates to the growers in cash was indirectly subsidizing exports, he said. Thai rice exports in volume will definitely fall this year due to higher prices but their price value will increase, he noted. Thailand is world's top rice exporter and had almost a one-third share in global trade volumes in 2011.
Thailand's unmilled rice output will likely fall by 10% this year to 27 million tons due to severe floods during plantings, the minister said. Around 5 million tons of unmilled rice was lost, but this will be partly offset by higher output from the secondary crop, to be harvested in April.

World Food Prices Fell In Dec On Big Crops (Source: CME)
World food prices decreased by 2.4% in December, the United Nation's food body said Thursday, driven by sharp falls in cereals, sugar and vegetable oils due to bumper crops and slowing demand. The Food and Agriculture Organization's food price index, which measures the monthly change in international prices of a basket of food commodities, fell five points from November to a new level of 211 points. The index now stands 11%, or 27 points, below its peak in February 2011, but the FAO said it was difficult to make any firm prediction on price trends for coming months. "International prices of many food commodities have declined in recent months, but given the uncertainties over the global economy, currency and energy markets, unpredictable prospects lie ahead," FAO Senior Grains Economist Abdolreza Abbassian said.
However, Rabobank grains analyst Nicholas Higgins said global food prices in 2012 will likely be driven higher by Ukrainian drought and La Nina weather effects in South America, while the performance  of row crops--such as corn, wheat and soybeans--in the U.S. and European Union will also be eyed. "The FAO [grains] indicator tends to lag the market measure and as such doesn't fully factor in the mid- to late-December rally in prices, which certainly bias' the indices move this month to the upside," Higgins added. Cereal prices registered the biggest fall in December due to record crops and an improved supply outlook, with the FAO Cereal Price Index dropping 4.8% to 218 points. Corn prices fell 6%, wheat 4% and rice 3%, the FAO said, meaning the index averaged 247 points in 2011, up around 35% from 2010 and the highest level since the 1970s. Meanwhile, expectations of an upcoming large production surplus weighed on sugar prices, with good harvests seen in India, the European Union, Thailand and Russia.
The FAO Sugar Price Index fell for the fifth consecutive month to 327 points in December, down 4% from the previous month and 18% from its peak in July. Poor global demand for soybeans and better-than-expected supplies of vegetable oil led to a rise in stocks, especially for palm and sunflower oil, deflating prices, the FAO said. The FAO Oils and Fats Price Index stood at 227 points in December, down 3% from November and well below the level of 264 points one year ago.

Corn, Wheat Plunge Most in Three Months as U.S. Sees Bigger World Supplies (Source: Bloomberg)
Corn and wheat prices plunged the most in three months, while soybeans slid, after an increase in stockpile forecasts by the U.S. government eased concern that shortages will inflate prices for food and biofuels. Inventories of corn in the U.S., the world’s top grower and exporter, may total 846 million bushels before this year’s harvest, 12 percent more than analysts expected, a U.S. Department of Agriculture report showed today. The 2011 crop totaled 12.358 billion, above a December forecast, while global output will be a record for a fifth straight year. World wheat reserves will rise to the highest since 2000, the USDA said. The prospect of ample supplies of grain for livestock feed boosted shares of Tyson Foods Inc. (TSN), the largest U.S. meat producer, and Smithfield Foods Inc., (SFD) the top pork processor. World food prices fell in December for the fifth time in six months and are down 11 percent from a record in February, the United Nations Food and Agriculture Organization said today.

ICE cocoa hovers near 8-week high, coffee firms  
LONDON, Jan 12 (Reuters) - Cocoa futures on ICE hovered below an 8-week high early, in a mild technical correction after this week's steep rally fuelled by a sharp slowdown in port arrivals in top producer Ivory Coast.
ICE arabica coffee futures edged up, while raw sugar was marginally positive in thin volume.

China Dec cotton imports 790,400 T, up 71 pct on yr - report
BEIJING, Jan 12 (Reuters) - China's cotton imports in December totalled 790,400 tonnes, up 71 percent from a year earlier, an industry website reported on Thursday, citing customs data.
Cotton imports for the whole of 2011 totalled 3.36 million tonnes, up 19 percent, said the report on www.cncotton.com, a website operated by China National Cotton Reserves Corp.

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.

Oil Heads for Biggest Weekly Drop in a Month as Iran Embargo Seen Delayed (Source: Bloomberg)
Oil headed for the biggest weekly decline in almost a month in New York after a proposed European Union embargo of Iranian crude imports against the nation’s nuclear program was said to be facing a delay of six months. Futures were little changed after sliding the most in two weeks yesterday to the lowest settlement this year. The embargo postponement will allow countries such as Greece, Italy and Spain to find alternative supplies, according to an EU official with knowledge of the talks. Oil also fell after a report showed U.S. retail sales rose less than forecast in December, signaling an economic slowdown in the world’s biggest crude consumer. Crude for February delivery was at $99.34 a barrel, up 24 cents, in electronic trading on the New York Mercantile Exchange at 11:15 a.m. Sydney time. The contract yesterday fell $1.77, or 1.8 percent, to $99.10, the lowest close since Dec. 30. Prices are down 2.2 percent this week, the biggest decline since the period ended Dec. 16, and up 0.5 percent this year.

Bullish China oil demand depends on storage: Clyde Russell
--Clyde Russell is a Reuters market analyst. The views expressed are his own.--
SINGAPORE, Jan 12 (Reuters) - There appears to be an emerging consensus that China's oil demand will accelerate in 2012 compared to last year, with consumption slated to jump by more than half a million barrels a day.
Such an increase would take China's crude demand to around 9.5 million barrels a day.

Japan crude stocks rise to 2-1/2 month high
TOKYO, Jan 12 (Reuters) - Japan's commercial crude inventories rose last week for the second straight week to hit a 2-1/2-month high as oil companies curbed refining to reflect weak demand for gasoline, industry data showed on Thursday.
The refinery utilisation rate fell by 2 percentage points to 88 percent in the week to Jan. 7 after hitting the highest rate since March 2008 in the previous week.

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

China Gold Hoarding Turns Traders Most Bullish in Two Months: Commodities (Source: Bloomberg)
Gold traders are the most bullish in two months after mainland China imported the most metal ever from Hong Kong and investors bought U.S. bullion coins at the fastest pace in more than a decade. Eighteen of 23 surveyed by Bloomberg expect the metal to gain next week, the highest proportion since Nov. 11. Mainland China imported almost 102.8 metric tons in November, valued at about $5.5 billion, trade data on Jan. 11 showed. The U.S. Mint said it sold 82,500 ounces of American Eagle gold coins in the first 11 days of January. Full-month sales would reach 235,000 ounces at that pace, the most since 1999.
Bullion rallied 7.3 percent since plunging to within 1 percentage point of a bear market on Dec. 29, on mounting concern that economic growth is slowing and European leaders are failing to contain the region’s debt crisis. Holdings (.GLDTONS) in exchange-traded products backed by the metal are heading for the biggest weekly expansion since mid-November and are within 2 percent of an all-time high, data compiled by Bloomberg show.

20120113 1007 Soy Oil & Palm Oil Related News.

Soybeans (Source: CME)
US soybean futures fell Thursday, fueled by larger-than-expected supply estimates from government forecasters. The supply forecast coupled with beneficial rains moving into parched South American crop areas provided enough negative influences to briefly drop prices to 3-week lows. However, with a great deal of uncertainty still surrounding South American crop potential, and fresh export demand, futures found support to trim losses, analysts say. The soybean market was also buoyed by the traders unwinding corn/soy spreads and analysts' views that prices were oversold after tumbling the day before. CBOT March soy ended down 20 1/2c at $11.82 1/2/bushel.

Soybean Meal/Oil (Source: CME)
Soy product futures fell in unison with soybeans, pressured by larger government supply forecasts. Speculative selling was featured across the soy complex as traders reduced premium previously built into prices on tighter supply expectations. CBOT March soymeal dropped $5.70 to $307.10/short ton, March soyoil ended down 0.43c at 51.46c/lb.

Palm oil eases on Argentine rains, USDA report eyed
SINGAPORE, Jan 12 (Reuters) - Malaysian crude palm oil futures fell, tracking an earlier decline in soy futures as rains in Argentina provided temporary relief to the drought-stressed crops while investors remained cautious ahead of a key U.S. report.
"The market's tracking soyoil which was down quite bad. On the local front there's not much to lead the market. It's a range trading within 3,200-3,250 ringgit," said a trader with a foreign commodities brokerage in Kuala Lumpur.

China's Sinograin to expand soy crushing capacity
BEIJING, Jan 12 (Reuters) - China Grain Reserves Corp (Sinograin), which manages the state grain reserves, will expand its commercial operation of soy crushing to profit from the country's rising demand for cooking oils and animal protein, according to analysts and local media reports.
The expansion will enable the state-owned company to compete for market share with Singapore-based Wilmar International , which now has the biggest crushing capacity and market share of consumer pack edible oils in the country, the world's top soy importer.  

India Dec palm oil imports to fall; soyoil up
NEW DELHI, Jan 12 (Reuters) - India's palm oil imports are likely to decline in December over the previous month as domestic oilseeds crushing peaked, but the fall is expected to reverse next month as local supplies run out, a Reuters survey showed on Thursday.
The other reasons for the fall are a weak rupee that has made imports costlier and a tendency of palm oil to solidify at lower temperatures. It is winter in India now.