Tuesday, February 28, 2012

20120228 1807 FCPO EOD Daily Chart Study.

FCPO closed : 3295, changed : +12 points, volume : higher.
Bollinger band reading : upside biased.
MACD Histrogram : weakening, buyer taking profit.
Support : 3270, 3250, 3200, 3150 level.
Resistance : 3300, 3350, 3420, 3450 level.
Comment :
FCPO closed recorded small gains with improving volume transacted. Soy oil price currently trading firmer after overnight closed recorded gains while crude oil price trading range bound testing resistance level.
Strong crude oil price, forecast of slower global soybean output and stronger export resulted soy oil and crude palm oil to trade higher while trader awaits tomorrow export data.
Technical chart reading remained suggesting an 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.

20120228 1736 FKLI EOD Daily Chart Study.

FKLI closed : 1556, changed : +1.5 point, volume : lower.
Bollinger band reading : correction range bound upside biased.
MACD Histrogram : falling, buyer leaving and seller testing market.
Support : 1550, 1540, 1530, 1515 level.
Resistance : 1565, 1570, 1580, 1590 level.
Comment :
FKLI closed recorded small gain with lesser volume changed hand nearly on par with cash market that closed little lower. Overnight U.S. markets closed mixed and today Asia markets traded higher while European markets currently registering gains.
News on Chinese banks are allowed to keep lending to local governments, better than estimate U.S. home sales, Germany vote for Greece second bailout and retreating crude oil price lift global markets to trade higher.
Technical reading still suggesting a correction range bound upside biased market development with roll over activities taking place.
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.

20120228 1702 Regional Markets EOD Daily Chart Study.

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

20120228 1549 Global Market & Commodities Related News.

Asia shares edge up, ECB and oil in focus
TOKYO, Feb 28 (Reuters) - Asian shares edged higher and the euro steadied as markets waited for a second liquidity injection from the European Central Bank to gauge risk appetite that has been somewhat dented by worries over high oil prices.
"Markets have risen too rapidly and may consolidate from time to time, (with people) looking to buy after prices fall. But underlying sentiment is gradually firming, as people believe they've seen the worst." said Xiao Minjie, chief economist at FuNNeX Asset Management in Tokyo.

FOREX-Yen off lows as exporters buy in month-end trades
TOKYO, Feb 28 (Reuters) - The yen on Tuesday pulled further away from a 9-month low plumbed the day before, bolstered by aggressive month-end buying by Tokyo exporters, though the currency may remain weak, traders said.
A record trade deficit, shrinking current account surplus and surprise policy easing by the Bank of Japan have combined to trigger what is set to be -- despite an apparent correction kicking in -- the yen's sharpest monthly drop in more than two years.

U.S. grains lower on profit-taking, favourable weather
U.S. grain futures trimmed recent gains on the back of profit taking on a soybean high in earlier trade and more moist weather conditions expected in South America.   Spot soybeans  hit $12.95 per bushel, the highest   price on a continuous chart since Sept. 22, 2011. The March  and May  contracts broke and settled above their 200-day moving averages.

Singapore's Golden Agri to almost double Indonesian palm oil refining ops
SINGAPORE, Feb 28 (Reuters) - Singaporean palm oil firm Golden Agri Resources  plans to nearly double its Indonesian refining capacity to 2.6 million tonnes over the next two years as it exploits the country's lower export taxes for refined edible oils, a top official said.
With currently over half a million hectares of land and 1.4 million tonne refining capacity in Indonesia, Golden Agri is a key beneficiary of Jakarta's move in 2011 to slash export taxes, the firm's Executive Director Rafael B. Concepcion Jr said.
Canada farmers seen planting record-large canola area
WINNIPEG, Manitoba, Feb 27 (Reuters) - Canadian farmers will plant a record-large area to canola this year as they take advantage of attractive prices and dry conditions, the annual Wild Oats Grainworld outlook conference heard on Monday.
Oilseed crusher Louis Dreyfus Canada pegged canola area at 21 million acres (8.5 million hectares), while FarmLink Marketing Solutions forecast plantings of 19.4 million acres, up from 18.65 million acres last year.

Forecasters make deep cuts to Brazil grain outlook
LONDRINA, Brazil, Feb 27 (Reuters) - The outlook for soy production in Brazil darkened further on Monday after public and private forecasters cut their harvest outlooks for the world's No. 2 grower again from predictions provided in recent weeks.
A harsh drought in the south of the country has stressed this year's soy and corn crops, thanks in part to the prevailing La Nina weather conditions that have also parched grain producing areas in Argentina, raising concerns of global food shortages and rising grain prices.

Ivory Coast rains, sun good for cocoa mid-crop
ABIDJAN, Feb 27 (Reuters) - Abundant rain and hot weather last week in most of Ivory Coast's cocoa growing regions improved prospects for the April-September mid-crop, though harvesting is not likely to pick up until May or June, farmers and analysts said on Monday.
The mid-crop in Ivory Coast, the world's top cocoa producer, will be closely watched by markets after an unusually long dry season since mid-November that undermined output during the tail end of the main crop.

China harvest to be hit by labour, fertiliser costs
BEIJING, Feb 27 (Reuters) - Rising labour and fertiliser prices and uncertain weather will reduce China's grain harvest this year, state radio quoted Minister of Agriculture Han Changfu saying on Monday.
A good grain harvest tames China's consumer inflation, which rebounded to 4.5 percent in the year to January, but was still well below a three-year-high of 6.5 percent last July.

Thailand sees steady growth in sugar output of 5 pct per year
BANGKOK, Feb 28 (Reuters) - Thai sugar production is forecast to rise by around 5 percent per year over the next five years and reach 12 million tonnes by around 2017, a senior official at the Office of Cane and Sugar Board (OCSB) said on Tuesday .
"We aim to have steady growth of around 5 percent per year. Let's say we should produce more than 10 million tonnes of sugar annually from now on," the OCSB's secretary-general, Prasert Tapaneeyangkul, told Reuters.

Brent slips below $124 after rally, supply woes support
SINGAPORE, Feb 28 (Reuters) - Brent crude futures extended losses and slipped below $124 , snapping a surge that threatened to hurt the global economy while concerns over supply from the Middle East helped stem the slide.  
"People were worried about the quick move in prices - they just sped up too fast," said Tetsu Emori, a fund manager with Astramax Co. in Tokyo.

Japan's heating oil imports set to increase in March -trade
SINGAPORE, Feb 28 (Reuters) - Japan's imports of jet fuel or kerosene are set to increase by at least a third in March from February, boosted by a harsher than usual winter and stocks falling to a 10-month low, industry sources said.
The additional imports should provide some support for the weak Asian jet fuel market, where prices have been lower than the same period last year, amid an abundant supply because of the weaker economic climate and a mild winter in Europe.

China iron demand, miners' resolve in focus at summit
BEIJING/SINGAPORE, Feb 27 (Reuters) - The outlook for China's iron ore demand and pricing of the raw material as well as the race among foreign miners to feed the country's growing appetite for ore are likely to take centrestage at an annual conference in Beijing.
The Big 3 iron ore suppliers -- Vale , Rio Tinto   and BHP Billiton   -- are boosting output over the next three years, trusting demand from top market China will continue to grow.

Copper dips on China woes, US data caps losses
SINGAPORE, Feb 28 (Reuters) - London copper edged lower as slow demand from top consumer China spurred caution among investors, although more signs of a mending U.S. economy are helping to limit losses.
"I believe Chinese demand is recovering but at a very, very slow pace," said Judy Zhu, commodity analyst at Standard Chartered in Shanghai, citing a drop, though modest, in Shanghai copper stockpiles last week.

Gold hovers below $1,770; ECB funding to support
SINGAPORE, Feb 28 (Reuters) - Gold traded steady , trapped in a tight $4 range below $1,770, as a major cash injection action by the European Central Bank expected later this week supported sentiment.
"As long as central banks around the world lean towards further easing, gold will rise further, although $1,800 will be a key resistance level for the time being," said Li Ning, an analyst at Shanghai CIFCO Futures.

METALS-Copper dips on China woes, US data caps losses
SINGAPORE, Feb 28 (Reuters) - London copper edged lower on Tuesday as slow demand from top consumer China spurred caution among investors, although more signs of a mending U.S. economy are helping to limit losses.
Copper has gained nearly 12 percent this year, but has been struggling to trade higher, given slack Chinese demand since after the Lunar New Year break in January.  

PRECIOUS-Gold hovers below $1,770; ECB funding to support
SINGAPORE, Feb 28 (Reuters) - Gold traded steady on Tuesday, trapped in a tight $4 range below $1,770, as a major cash injection action by the European Central Bank expected later this week supported sentiment.
Gold posted losses in the previous two sessions as the momentum fizzled after bullion hit a more than three-month high last week, during which a Greece bailout deal and expectations of more monetary easing from key economies inspired gold bugs.

20120228 1050 Global Market & Commodities Related News.

GLOBAL MARKETS-Markets consolidate, oil remains risk
 TOKYO, Feb 28 (Reuters) - Markets consolidated on Tuesday as investors remained wary of the impact from high oil prices on growth and hoped the European Central Bank's upcoming second liquidity injection will support sentiment and revive risk appetite.
"Although the issues surrounding Greek PSI and additional financial resources for Europe will likely dominate headlines, we believe that the upcoming LTRO and behaviour of energy prices are more important for market sentiment," said Barclays Capital analysts.

COMMODITIES-Oil's downturn hits gold, lifts copper
NEW YORK, Feb 27 (Reuters) - Commodity markets closed mixed on Monday, with crude oil finishing lower as the dollar strengthened and G20 officials expressed concern over high energy prices, but the end of oil's seven-day rally boosted industrial metals.
"The gold market may be straddled between tame physical   demand on the one hand and strong currency and investor   risk-related buying on the other," said James Steel, chief   commodity analyst at HSBC.

Oil falls after recent surge despite supply fear
NEW YORK, Feb 27 (Reuters) - Oil prices pulled back  on Monday after a string of higher settlements as concerns that high oil prices might curb economic growth, along with the stronger dollar, countered supportive  fears about Iran and potential supply disruptions.
"The energy complex is pulling back about 1 percent ... partially on a softening in the equities and euro," Jim Ritterbusch, president at Ritterbusch & Associates, said in a note.

POLL-US crude stocks seen up on higher imports
Feb 27 (Reuters) - U.S. crude oil stockpiles were seen up for the second straight week last week on higher imports, a preliminary Reuters poll of analysts showed on Monday.
On an average, analysts called for a build of 1.4 million barrels in crude stocks for the week of Feb. 24, with five out of six analysts polled predicted a build. Data from the U.S. Energy Information Administration last week showed U.S. crude stockpiles rose by 1.63 million barrels to 340.71 million barrels in the week to Feb. 17 as total demand for refined oil products plunged to the lowest level in nearly 15 years.

Too soon to tap US oil reserve-Sen. Murkowski
WASHINGTON, Feb 27 (Reuters) - The U.S. government should save its strategic oil reserves for a true supply emergency and resist the temptation to tap them now as a "quick fix" to quell rising gasoline prices, Republican Senator Lisa Murkowski said on Monday.
Releasing oil too soon from the salt caverns storing 696 million barrels of crude could have a short-term political pay-off by lowering gasoline prices but would sell the country short if tensions in Iran severely restrict world supplies later this year, Murkowski said in an interview.

Where was the smart oil money a few months ago?
(Robert Campbell is a Reuters market analyst. The views expressed are his own)
NEW YORK, Feb 27 (Reuters) - Anyone who has ridden the momentum in the oil market this year is probably looking good, at least in the short term, but the options market suggests few big investors were well positioned before the rally took off.    
The market, as a whole, on Nov. 30 was clearly far more worried about a dramatic sell-off in oil prices than a rally, particularly a rally with the catastrophic narratives that are accompanying this month's surge in oil prices.

Sanctions risk rerun of oil's 2011 flash crash
(John Kemp is a Reuters market analyst. The views expressed are his own)
LONDON, Feb 27 (Reuters) - Soaring oil prices and the loss of exports from South Sudan, Syria and Iran pose awkward questions for investors and policymakers.
Last year, a similar surge following the outbreak of the Libyan civil war eventually resulted in the flash crash on May 5 and the decision to release emergency stocks by the United States and other members of the International Energy Agency (IEA) on June 23.

US March natural gas futures expire on weak note
NEW YORK, Feb 27 (Reuters) - U.S. natural gas futures ended sharply lower on Monday, with the front-month March contract losing 4 percent at expiration as mild late-winter weather forecasts and bloated supplies continued to pressure the complex.
"The market is now retracing back to a level that is more reflective of the actual inventory situation ... oversupplied versus all comparative measures," Energy Management Institute's Dominick Chirichella said in a report.

Euro Coal-Prices dip 50c/T with weaker oil
LONDON, Feb 27 (Reuters) - Prompt physical coal prices fell a marginal 50 U.S. cents a tonne on Monday in line with weaker oil.
"There is still U.S. coal everywhere. The flow hasn't stopped despite the fall to under $100," one trader said.

20120228 1025 Local & Global Economic Related News.

Bank Negara Malaysia will keep interest rates “accommodative” as the outlook for the global economy remains uncertain, Governor Tan Sri Dr Zeti Akhtar Aziz said. “Given the external environment is a difficult environment, we will keep the interest rates at an accommodative stance and it is just an issue of degree of accommodation,” Zeti said yesterday. “Right now, our interest rate level, we say, is accommodative. Certainly at 3%, it wasn’t an inhibiting factor for increasing loan growth,” she said. “We can say with a high degree of confidence that domestic demand is on a solid and steady growth path. But in the external environment, we are seeing of course our export performance being affected by the slowing in demand in the US and in Europe and other parts of the world. We are not going to be immune to these kinds of developments,” she added. (BT)

The government will introduce another initiative under the government transformation programme (GTP) to curb political financing as a proactive measure to enhance transparency and public confidence in political organisations in the country, said PM Datuk Seri Najib Tun Razak. The initiative would emphasise that any contribution made to any political party whether at the central or state level must be channeled through the official party account, he said. Every contribution made must be issued with a receipt and deposited into the party account. Through a proper receipt account, this contribution could be audited at the end of each financial year, he said. 'Political Financing' is one of the suggestions made by the Anti-Corruption Committee and Anti-Corruption Advisory Board of the Malaysian Anti-Corruption Commission (MACC). Meanwhile, the government planned to display the draft of every bill on the website of the ministry concerned to ensure that every bill in the country was transparent and took into consideration the views of every one before it was enforced, he added. (Bernama)

China has reached a "turning point" in its economic development, with the pace of growth likely to nearly halve in the next two decades, World Bank and Chinese government researchers said. This makes the case for reform “compelling,” says World Bank President Robert Zoellick at the launch of the “China: 2030” study. (AFP)

Vietnam’s YTD exports climbed 24.8% yoy in Feb (-11.1% in Jan), while YTD imports increased 11.8% yoy in Feb (-18.7% in Jan). (Bloomberg)

Thailand’s manufacturing production index fell 15.2% yoy in Jan (-25.3% in Dec), a deeper decline than the 14% fall expected by economists. Total capacity utilisation improved to 58.5% in Jan (51.9% in Dec). (Bloomberg)

South Korea: Current-account in deficit for the first time in two years
South Korea posted its first current-account deficit in nearly two years as exports dropped due to Europe’s debt crisis and the Lunar New Year holiday. The deficit was USD772.2m in January, the first shortfall since February 2010, compared with a revised surplus of USD2.8bn in December, the Bank of Korea said in a statement in Seoul today. The current account is the broadest measure of trade, tracking goods, services and investment income. (Bloomberg)

Bank Indonesia said the plan to raise subsidized fuel oil sale price will boost inflation to 7%, higher than the central banks’ target of 4.5%, +/- 1%. (IFT)

Indonesia’s government has been asked to prioritize the plan on whether to increase the price of oil fuel (BBM) subsidy or electricity tariff this year, so that the two policies are not applied simultaneously in a single year. (IFT)

International Monetary Fund Managing Director Christine Lagarde urged global leaders for more actions to steer the economy out of the woods, saying that “the G-20 countries must now strengthen resilience to further shocks that could result from still-fragile financial systems, high public and private debt, and higher world oil prices.” (The Nation)

Standard & Poor's cut Greece’s credit rating to "selective default" after banks agreed to write off more than half of their Greek debt holdings in a second EU bailout of the country. The rating was lowered from the already junk-level “CC” grade to “SD” in view of “the Greek government's retroactive insertion of collective action clauses (CACs) in the documentation of certain series of its sovereign debt on 23 Feb 12," according to a statement by the rating agency. (AFP)

Greece will still be at high risk of defaulting despite the agreement last week on a rescue and part cancellation of its debt, Moody's Investors Service said, warning that the terms of the debt swap could result in a severe further weakening of the capital base of the Greek banking system. (AFP)

EU: Merkel wins Greek aid vote after warning of ‘incalculable damage’ on delay
Chancellor Angela Merkel won a parliamentary vote on Greek aid after warning German lawmakers that pushing Greece out of the euro would risk “incalculable” damage, defying a public backlash against more bailout funds. In a vote that showed dissent in her coalition growing, 496 members of the lower house, or Bundestag, voted in favor of the 130 billion-euro (USD174bn) package yesterday in Berlin; 90 voted against and five abstained. While questions on Greece’s remaining in the euro “have their justification,” Merkel warned that a failure of the euro might endanger the Europe Union and the global economy. (Bloomberg)

UK: Home prices supported by rush to beat tax-holiday end
UK house prices held their value for a second month in February, boosted by a seasonal increase in demand and a rush to beat the expiration of a property-tax exemption, Hometrack Ltd said. The average cost of a home in England and Wales was unchanged from January and 1.4% lower than a year earlier, the London-based property research company said in a report today. The number of potential buyers registering with estate agents rose 18% over the month, the largest gain for five years. (Bloomberg)

US: Pending home resales show housing market regaining footing
More Americans than forecast signed contracts to buy previously owned homes in January, indicating the industry that sparked the last recession is improving. The index of pending home resales climbed 2% after a 1.9% decrease the prior month that was smaller than previously estimated, the National Association of Realtors said in Washington. The median forecast of 44 economists surveyed by Bloomberg News called for a 1% advance. (Bloomberg)

The US National Association of Realtors’ Pending Home Sales Index increased 2% mom to 97.0 in Jan (a revised -1.9% in Dec), the highest reading since Apr 10. (Reuters)

US consumer indebtedness shrank 1.1% qoq or US$126bn from the end of Sep to US$11.53tr on 31 Dec, led by a 1.6% decline in mortgage balances, according to the Federal Reserve Bank of New York. (Bloomberg, Reuters)

20120228 1024 Malaysia Corporate Related News.

Malaysia Rating Corporation (MARC) has revised DRB-HICOM's sukuk rating on its RM1.8b Islamic Medium Term Notes (IMTN) programme from stable to negative. The outlook recognises the potential weakening of DRB-Hicom's near-to-intermediate term financial profile, caused by its debt-funded acquisition of Proton Holdings. The rating agency said, “a key rating issue for DRB-Hicom in the context of the Proton acquisition is the more challenging debt maturity profile that would result from the acquisition-related interim-financing decisions and the execution risk associated with plans to deleverage post-acquisition.” (Starbiz)

Tenaga Nasional Bhd (TNB) is keen to pursue further investment opportunities in the energy sector in Pakistan. However, CEO Datuk Seri Che Khalib Mohd Noh wants the Pakistani authorities to relook the terms of its current power purchase agreement (PPA) in Sindh. "We're trying to overcome some small challenges (in the PPA), which we will overcome soon, and turn to a new chapter," he said at a media briefing after the Malaysia-Pakistan Business Council meeting here yesterday. TNB, through TNB Liberty Power Ltd, operates a 235MW combined-cycle natural gas power plant. It invested US$300m (RM906m) in the 21-year Liberty Power Plant project, launched in 2002. (BT)

IOI Corp will build a refinery in Indonesia once it generates enough feedstock from its plantations in Borneo island in the next three years, a top official said yesterday. Foreign firms have been scrambling to set up processors in the world's top producer of the tropical oil to tap higher margins after Jakarta last year slashed export taxes of the refined grade to half of that of the crude variety. IOI Corp's group executive director Lee Yeow Chor, said the firm's two Indonesian units will plant 25,000ha annually over the next three years - an ambitious target given it has planted 2,200ha in the financial year ended June 2011. "We are building up our planted Indonesian hectarage and in about three years time, we will have sufficient volume for a refinery," Lee said in an interview ahead of the Bursa Malaysia Palm Oil Conference next week. (BT)

IOI Properties Bhd's new shopping mall, IOI City Mall, will be sealing an agreement with one anchor tenant and one key tenant next month. Construction of the mall is on track to be completed by 2014, and will feature one-of its-kind entertainment park that has yet to be seen in any mall in the Klang Valley. The company's senior general manager, Lee Yoke Har said the total gross development value for the project was some RM2bn, with the mall taking up RM1bn. (StarBiz)

Felda settlers to get shares in SPV
The special purpose vehicle (SPV) that is being created to push through the listing of Felda Global Ventures (FGV) will take the form of an investment holding company (IHC) that will be entirely owned by Felda settlers. Settlers will be offered units in the IHC, similar to how PNB operates its Amanah Saham Nasional unit trust. The IHC will then subscribe to the pre-IPO allocaton of shares in FGV that was initially meant for Koperasi Permodalan Felda. The earlier proposal was for KPF to swap its 49% stake in Felda Holdings for a 37% stake in FGV. With the new structure in place, the FGV listing is expected to meet the June target despite concerns that it would be delayed due to the problems at KPF. (StarBiz)

CIMB in talks with RBS on Asia-Pacific acquisitions
CIMB CEO Datuk Seri Nazir Razak has confirmed that CIMB was in discussions with the Royal Bank of Scotland (RBS) on a potential acquisition of some of their Asia-Pacific investment banking and securities’ businesses. The Australian newspaper had earlier reported that CIMB would be buying RBS Australia’s equity operations. Other reports also speculated that CIMB had won the bid against China International Capital Corp to acquire the Australian equity operations for USD50m. (StarBiz)

IGB plans hotel REIT
IGB Corp is said to be mulling over a hotel REIT to unlock the value of its hospitality assets in the country and overseas. Observers said the hotel REIT will likely come about after the IGB’s 75%-owned KrisAssets successfully injects Mid Valley Megamall and The Gardens into a retail REIT later this year. The two retail assets have an estimated total asset value of close to RM4bn. IGB has 16 hotel assets, of which nine are located in Malaysia. (StarBiz)

Kimlun awarded RM72m contract
Kimlun has been awarded with the construction of extension building and ancillary building and alteration of an existing building of a shopping mall in Johor Baru, Johor by Tanah Sutera Development SB for RM72m.The construction work is expected to be completed by end-November 2012. The company’s orderbook stood at about RM1.2bn as at 31 Dec 2011. (Malaysian Reserve)

Deepak re-emerges in Envair with 12.4% stake
Deepak Jaikishan has re-emerged as a substantial shareholder in Envair Holdings after acquiring 14.7m shares representing a 12.4% equity interest since last Friday. This comes less than three months after he exited the company in December 2011. Deepak acquired the shares through off-market transactions. Media reports said Deepak is planning to inject some oil and gas business into Envair, a water and air filter manufacturer, has been posting losses for years. (Financial Daily)

Tan Chong expects its Vietnam unit to gain momentum with the commencement of its manufacturing plant in Danang by the middle of this year. The RM51.15m Danang plant manufactures, assembles and sells buses, trucks and passenger vehicles and provides after-sales service. The plant is targeted to produce 1,200 units of trucks annually and will gradually increase its production volume to 12,000 units a year for the next five years. (Malaysian Reserve)

Muhibbah Engineering, one of the contractors for the RM1.4bn APH project has filed a suit against APH Sdn Bhd, and the managing contractor, ZAQ Sdn Bhd, for overdue claims amounting to RM381m. (BMSB, Financial Daily)

Carlsberg Brewery Malaysia, faced with costlier raw materials like malt and aluminium packaging, is mulling price hikes in its beer range as early as the next quarter. "The rising input cost of products particularly malt - the key ingredient in brewing beer - is 20% higher this year. Last year, the cost of aluminium cans had also increased 27% from 2010 while electricity and natural gas tariffs also went up in mid-2011," said Carlsberg managing director Soren Ravn. (BT)

Carlsberg Brewery is planning to brew another one of its premium beers in Malaysia this year in order to capture more market share. "Within the next three to six months, we will start production of Kronenbourg [1664] and [Kronenbourg] Blanc here. So we get one more brand in our premium portfolio produced here," managing director Soren Ravn said. The company's target is for its premium beer brands to have a 20% market share in the premium beer segment in 2012, up from 16% in 2011, he said. (Financial Daily)

Petronas has resigned from a consortium exploring Indonesia’s East Natuna gas project, Asia’s biggest untapped gas reserve, Indonesia’s state oil and gas company Pertamina said yesterday. “We received confirmation from our upstream director Muhammad Husen that Petronas has backed down as our partner in East Natuna,” Pertamina spokeswoman Wianda Pusponegoro said yesterday. In Dec-2010, Pertamina signed agreements with Exxon Mobil, Total and Petronas as partners to develop the Natuna gas field. (Reuters)

Tricubes Bhd, the enabler of the 1Malaysia email account, saw its nine-month net loss widen to RM2.95m as at Dec 31, 2011 from RM0.26m in 2010. Tricubes said the 1Malaysia email project and the appointment by Royal Malaysian Police as the collection agent of traffic summonses via automated teller machines and enquiry about summonses via SMS are expected to have a positive impact on the results in 2012 and subsequent years. (Bernama)

Genting Plantations: FY2011 net profit up on higher price
Genting Plantations’ net profit for FY2011 rose 36.34% to RM442.0m from RM324.2m, boosted by higher palm products prices and higher fresh fruit bunch (FFB) production. Revenue grow 35.2% y-o-y to RM1.34bn while EBITDA margins for its Malaysian plantation segment  widened to 52% compared with 50% a year ago as stronger selling price of palm products offset the impact of higher operating expenditure. The group achieved an average selling price of RM3,240 per tonne for crude palm oil and RM2,235 per tonne for palm kernel. However, the group said its plantations in Indonesia posted higher losses in FY2011 as the ongoing expansion is still in the early stages of development. (Financial Daily)

Boustead: Reports RM831m pre-tax profit
Boustead Holdings has registered a pre-tax profit of RM831m for FY2011, a 14% jump from RM726.2m the previous year. Revenue rose to RM8.555bn from RM6.181bn. The company said the hike in revenue and profit was mainly due to higher sales volume from its business segments, including 31% increase in revenue for the manufacturing & trading division. The plantation division's revenue increased by 28%, mainly on stronger palm product prices and better fresh fruit bunches crop. (Business Times)

JT International: Post lower earnings
JT International posted a 33.9% y-o-y drop in net profit to RM18.07m for 4Q FY2011, due to lower sales volume and higher marketing expenditure. Revenue for the quarter under review declined 4.3%  y-o-y to RM265.6m.  For  FY2011, the Malaysian division of Japan Tobacco International posted a 8.2% year-on-year drop in net profit to RM122.8m while revenue declined 0.6% to RM1.198bn. JTI Malaysia mainly attributed the decline in performance to the  lower sales volume of its Winston cigarettes, which was also offset partially by higher cigarettes prices. (StarBiz)

MAA Group: To dispose of its Indonesian insurer
MAA Group said it is selling its Indonesian subsidiary, PT MAA Life as part of the rationalization exercise to focus on its core business in Malaysia. It said its wholly-owned subsidiary MAA International Assurance Ltd has entered into an agreement with Tokio Marine Holdings Inc to dispose of a 43.3% stake in PT MAA Life for 27.4bn rupiah (RM9.1m) cash. The group said the cash proceeds from the disposal will be used for working capital purposes. (Financial Daily)

UMW: Expects higher revenue, profit this year
UMW Holdings expects its revenue and profit to increase by 5% to 8t% this year bolstered by higher contribution from its automotive segment. President and group  CEO, Datuk Syed Hisham Syed Wazir, said the group planned to launch new and facelift models this year and they  were expected to boost demand.  Meanwhile,  the company said it expected UMW Toyota and Perodua to sell a total of 281,000 cars this year, a 3.9% increase, compared with last year. The group also expects the revenue of the oil and gas segment to improve this year in consideration of a full-year contribution from Naga 3 as well as higher day-rates for its land rights, Ghazal 3 and 4 as well as a full-year contribution from Ghazal 5. Profits would also improve further with the installation and commissioning of equipment and facilities for the Garraf Power Plant in Iraq which was expected to be substantially completed this year. (Bernama)

Star Publications: Print, new media segments lift profits
Star Publications’s net profit rose to RM186.6m for FY2011 against RM184.9m posted a year earlier. Revenue for the period rose 0.6% RM1.067bn from RM1.061bn previously mainly due to improved full-year revenue of print and new media segment and the broadcasting segment. Pre-tax profit declined to RM250.5m from RM258.8m mainly attributable to the decline in the performance of the event, exhibition, interior and thematic segment. EPS for the financial year rose to 25.28 sen from 25.04 sen in the previous corresponding period. Revenue of the print and new media segment for the current year improved to RM821.62m, compared with RM801.8m due higher advertising revenue in its print media. (StarBiz)

Shipping: Tax on local vessels needs review
Owners of Offshore Support Vessels (OSVs) in the oil and gas industry, are urging the Government and local banks to look into tax and financing issues affecting their business. According to Malaysia OSV Owner's Association president Tasripin Masotee, local vessel owners were facing stiff competition from foreign-owned vessels (including Labuan registered vessels) that were offering lower daily-charter rates by as much as US$1,000 (RM3,015) to US$2,000 (RM6,030) per day. He said factors that had led to the “uncompetitive” charter rates offered by Malaysian-owned vessels included unfavorable fiscal and monetary legislation on corporate tax, high operation and maintenance costs in Malaysia due to tax, work permit fees for foreign crews, and comparatively high cost of financing from local banking institutions. Tasripin cited Singapore as offering a more favourable environment for OSV owners. (StarBiz)

20120228 1015 Global Market Related News.

Most Asia Stocks Fall for Second Day; Chipmakers Rise on Elpida Bankruptcy (Source: Bloomberg)
Japanese stock futures fell as gains in the yen cut the earnings outlook for exporters and after Elpida Memory Inc. (6665) filed for the nation’s biggest bankruptcy in two years. American depositary receipts of Honda Motor Co. (7267), a carmaker that gets more than 80 percent of its revenue overseas, lost 1 percent from the closing share price in Tokyo. Shares of Elpida were poised to plunge today after the chipmaker filed for bankruptcy protection with more than $5 billion in liabilities. Futures on Japan’s Nikkei 225 Stock Average (NKY) expiring in March closed at 9,590 in Chicago yesterday, compared with 9,620 in Osaka, Japan. They were bid in the pre-market at 9,580 in Osaka, at 8:05 a.m. local time.
“Investors may rush to sell shares due to negative factors such as the yen’s strength,” said Takero Inaizumi, head of equity research in Tokyo at Mizuho Investors Securities Co. “Investors may temporarily avoid buying electronics parts makers or companies with weak financial conditions after Elpida’s failure.”

Japanese Stocks Decline After Elpida Bankruptcy (Source: Bloomberg)
Japanese stocks fell after Elpida Memory Inc. filed for the biggest bankruptcy in two years and the yen strengthened. Oil declined and South Korea’s won advanced. The Nikkei 225 Stock Average (NKY) slid 0.9 percent as of 9:49 a.m. in Tokyo. The MSCI Asia Pacific Index slid less than 0.2 percent and Standard & Poor’s 500 Index futures were little changed. The won added 0.2 percent against the U.S. dollar, while the euro held a decline against most of its major peers. Oil dropped 0.5 percent to $107.99 a barrel. Elpida, unprofitable in each of the past five quarters, filed for bankruptcy yesterday as semiconductor prices plunged and it failed to win a second government bailout. Standard & Poor’s cut Greece’s credit ratings to “Selective Default” after it negotiated the biggest sovereign debt restructuring in history. Sun Hung Kai Properties Ltd., PCCW Ltd. and Sino Land Co. are among Hong Kong companies set to report earnings today.

S&P 500 Rises on Home Data as Banks Rally (Source: Bloomberg)
The Standard & Poor’s 500 Index (SPX) rose to an almost four-year high, rebounding from earlier losses, on better-than-estimated housing data as financial shares rallied. A measure of banks advanced the most in the S&P 500 among 24 industries, rallying 1.9 percent. JPMorgan Chase & Co. (JPM) climbed 2 percent after CLSA Ltd. analyst Mike Mayo said it should consider breaking up and selling businesses. Lennar Corp. (LEN) and D.R. Horton Inc. (DHI) rallied more than 1.8 percent to pace gains in homebuilders. Micron (MU) Technology Inc., the largest U.S. maker of computer-memory chips, surged 7.7 percent after Japan-based rival Elpida Memory Inc. filed for bankruptcy.
The S&P 500 gained 0.1 percent to 1,367.59 at 4 p.m. New York time, erasing a drop of 0.8 percent. The Dow Jones Industrial Average lost 1.44 points, or less than 0.1 percent, to 12,981.51. The gauge turned lower at the close of trading after failing to hold above 13,000 (INDU) for the third session in the past week. The Dow last closed above that level in May 2008.

European Stocks Drop as G-20 Rebuffs Boosting IMF Resources; HSBC Declines (Source: Bloomberg)
European stocks declined, extending last week’s retreat, as the Group of 20 nations rejected calls from the euro area to increase the International Monetary Fund’s lending resources. HSBC Holdings Plc (HSBA) lost 3.7 percent after pretax profit at Europe’s largest bank missed analysts’ estimates. A.P. Moeller- Maersk (MAERSKB) A/S slipped 3.7 percent after saying that its container division will make a loss this year. Airlines fell as crude oil traded near a nine-month high. The Stoxx Europe 600 Index (SXXP) slid 0.3 percent to 263.86 at the close, after earlier falling as much as 1.2 percent. The benchmark measure extended last week’s 0.4 percent retreat. The gauge has still climbed 7.9 percent this year buoyed by U.S. economic reports and as investors speculated that the euro area will contain its sovereign-debt crisis.
“I don’t think the market really anticipated the G-20 would come up with anything different,” said Jeremy Batstone- Carr, head of research at Charles Stanley & Co. in London. “The fact of that matter is -- as it stands -- the firewall is still insufficient. The higher oil price is another uncertainty in investors’ minds and it is contributing to this slightly risk- off day today.”

Oil hurts stocks, Europe hopes underpin euro
TOKYO, Feb 27 (Reuters) - Asian shares fell as high oil prices raised concerns about global growth, while signs of fresh steps from major economies to contain the euro zone debt crisis and expectations for the European Central Bank's funding underpinned the euro.
"A rise in oil prices drags the economy and weighs on growth around the world," said Bob Takai, general manager of Sumitomo Corp's energy division.

Yen’s Worst Slump Since 2009 Shows Intervention No Match for BOJ Purchases (Source: Bloomberg)
Bank of Japan Governor Masaaki Shirakawa’s inflation goal is succeeding where record intervention failed, as the yen heads for its steepest monthly drop in two years. The currency reached an almost nine-month low after the BOJ, which has struggled for more than a decade against deflation, said on Feb. 14 it aimed for 1 percent annual gains in consumer prices and would add 10 trillion yen ($124 billion) to the economy. Traders are paying record premiums for options to buy the dollar versus the yen for three, six and 12 months. Bullish bets on Japan’s currency have fallen 70 percent from the end of last month. Shirakawa needs a weaker yen to help Japan export its way out of a recession made deeper by last year’s earthquake and the worst nuclear crisis in a generation. Energy imports to replace lost capacity have reversed trade surpluses that made the currency a refuge in a slowing global economy. Prospects of higher inflation are driving it down, at least for now.

Yen Gains Versus Euro, Dollar as Asian Stocks Decline for a Second Day (Source: Bloomberg)
The yen advanced versus the euro and dollar as Asian stocks slid for a second day, boosting demand for the Japanese currency as a haven. The yen gained 0.3 percent to 107.63 per euro as of 9:59 a.m. in Tokyo and rose 0.4 percent to 80.32 against the greenback. The MSCI Asia Pacific Index of shares dropped 0.3 percent, after declining 0.5 percent yesterday.

Pending U.S. Home Resales Show Housing Market Regaining Footing: Economy (Source: Bloomberg)
More Americans than forecast signed contracts to buy previously owned homes in January, indicating the industry that sparked the last recession is improving. The index of pending home resales climbed 2 percent after a 1.9 percent decrease the prior month that was smaller than previously estimated, the National Association of Realtors said today in Washington. The median forecast of 44 economists surveyed by Bloomberg News called for a 1 percent advance. Buyers are returning to the real estate market on the heels of faster job gains for three straight months, falling home prices and record-low borrowing costs. At the same time, foreclosures are weighing on property values and construction, slowing the housing recovery.

Bernanke Pessimism Drives Easy Credit With Forced Government Spending Cuts (Source: Bloomberg)
Federal Reserve Chairman Ben S. Bernanke is trying to compensate for the damage lawmakers threaten to inflict on the U.S. economy, even as Republicans skewer his stimulus efforts for risking inflation. The potential drag from fiscal restraint contributed to the rationale behind policy makers’ reduced forecasts for growth this year and in 2013, according to the minutes of their Jan. 24-25 meeting. They also decided to extend their commitment to keep interest rates near zero through at least late 2014 instead of mid-2013 to provide “more accommodative financial conditions,” the minutes said.
Bush-era tax cuts and expanded unemployment benefits are set to expire at the end of the year, and a deficit-reduction law requiring $1 trillion of cutbacks also kicks in if lawmakers can’t agree on a new plan. The Fed may keep rates low for longer because the budget-balancing measures slated for 2013 -- including those automatic cuts, known as sequestration -- threaten to weigh on expansion, said Ward McCarthy, chief financial economist at Jefferies & Co.

South Korea Posts Current-Account Deficit For the First Time in Two Years (Source: Bloomberg)
South Korea posted its first current-account deficit in nearly two years as exports dropped due to Europe’s debt crisis and the Lunar New Year holiday. The deficit was $772.2 million in January, the first shortfall since February 2010, compared with a revised surplus of $2.8 billion in December, the Bank of Korea said in a statement in Seoul today. The current account is the broadest measure of trade, tracking goods, services and investment income. Signs of an improving U.S. economy and progress toward a Greek bailout have cut external risks for Asia’s fourth-largest economy while rising oil prices pose a fresh threat, Finance Minister Bahk Jae Wan said last week. The Bank of Korea kept its benchmark interest rate unchanged for an eighth month on Feb. 9, the longest pause since tightening began in July 2010.
“Korea’s trade account should post a deficit in the first quarter, suggesting negative GDP growth for the quarter,” Kwon Young Sun, a Hong Kong-based economist at Nomura Holdings Inc., said before the release. “But this should be temporary as we expect a modest recovery in global demand in the second half.”

Thailand Manufacturing Output Decline Eases as Factories Resume Production (Source: Bloomberg)
Thailand’s industrial output fell the least in four months in January as companies resumed operations and supply-chain disruptions eased after the nation’s worst floods in almost 70 years. The industrial production index dropped for a fifth straight month, slipping 15.15 percent from a year earlier, after a 25 percent contraction in December, the Office of Industrial Economics said in a statement in Bangkok today. The median of five estimates in a Bloomberg News survey was for a 14 percent decline. Southeast Asia’s second-largest economy may expand by as much as 6.5 percent this year on reconstruction activities after the floods, the National Economic and Social Development Board said earlier this month. The central bank cut interest rates in the last two meetings to aid recovery and cushion the impact of Europe’s debt crisis, which has hurt Asian exporters from Singapore to Taiwan.
“All companies are at full speed to rebuild after the floods,” Kampon Adireksombat, an economist at Tisco Securities Co. in Bangkok, said before the report. “We expect the manufacturing sector to return to normal as early as the second quarter.”

Merkel Wins Greek Aid Vote After Warning (Source: Bloomberg)
Chancellor Angela Merkel won a parliamentary vote on Greek aid after warning German lawmakers that pushing Greece out of the euro would risk “incalculable” damage, defying a public backlash against more bailout funds. In a vote that showed dissent in her coalition growing, 496 members of the lower house, or Bundestag, voted in favor of the 130 billion-euro ($174 billion) package yesterday in Berlin; 90 voted against and five abstained. While questions on Greece’s remaining in the euro “have their justification,” Merkel warned that a failure of the euro might endanger the Europe Union and the global economy. “I think those risks are incalculable, and therefore indefensible,” Merkel told lawmakers in the Bundestag. As chancellor, “I should and have to take risks, but I cannot embark on adventures. My oath forbids that,” she said.
Merkel’s government pushed through the measure to stave off a collapse of the Greek economy amid signs of growing resistance and as one of her Cabinet ministers said Greece should leave the single currency. Euro leaders will now shift their focus on whether to bolster the region’s bailout firewall as they prepare for a summit meeting in Brussels on March 1-2.

Nobel Winner Krugman Says Greece Running Out of Alternatives to Euro Exit (Source: Bloomberg)
Nobel-prize winning economist Paul Krugman said Greece is “close” to having no option but to quit the euro as austerity measures imposed on the nation hamper its economic recovery. “If I were running a peripheral country I would say that you cannot leave” the 17-nation currency region, Krugman said at an event in Lisbon today. While it would be “extremely disruptive,” Greece is ‘very close to running out of alternatives,’’ he said. Germany’s parliament approved a second Greek aid package in Berlin today, part of a plan agreed on this month to stem the euro-area debt crisis. Still, finance officials from the Group of 20 nations meeting in Mexico over the weekend rebuffed pleas for additional funding through the International Monetary Fund until the currency region first ratchets up its own resources. European leaders are scheduled to meet in Brussels on March 1-2.

G-20 Rebuffs Europe’s Call for Help (Source: Bloomberg)
European leaders shift their focus this week to bolstering the euro region’s debt-crisis firewall after the Group of 20 nations rebuffed their call for help. The decision by G-20 finance ministers to fend off pleas for assistance pending an increase in the euro-area backstop puts the onus on Germany, the biggest national contributor to bailouts, to overcome its resistance to doing more. With a parliamentary vote on a second Greek aid package looming in Berlin today, German Chancellor Angela Merkel’s government must decide next month whether to back plans to combine rescue funds and produce a potential firewall of 750 billion euros ($1 trillion). European Union leaders convene for a summit meeting in Brussels on March 1-2. Europe “doesn’t really need any outside money,” Jim O’Neill, chairman of Goldman Sachs Asset Management, said in an e-mail. “It needs their own policy makers, especially Germany, to show leadership.”

Europe Focus Shifts to Debt-Crisis Firewall (Source: Bloomberg)
European leaders will shift their focus this week from a Greek bailout to the prospect of bolstering the region’s firewall against debt-crisis contagion as they ready for their latest summit. After lawmakers in Germany and Finland vote on approving the second Greek rescue package today and Feb. 29, European Union heads of government will turn to their March 1-2 summit in Brussels. Leaders of the 17-member monetary union have said they’ll decide in March whether to lift a 500 billion-euro ($672 billion) limit to bailout funding. As the European Central Bank prepares a second round of cash lending to help shore up the region’s banks, policy makers are focused on preventing a Greek collapse in order to take advantage of signs of an improved global economy.
The latest Greek bailout “gives the opportunity of euro- zone leaders to put a better, more organized and larger firewall in place,” William Rhodes, chief executive officer of William R. Rhodes Global Advisors, said in a Feb. 24 interview on Bloomberg Radio’s “The Hays Advantage.”

20120228 1013 Global Commodities Related News.

Corn (Source:CME)
US corn futures continue to wrestle with tight near-term supplies versus expectations stockpiles could balloon in the months ahead. Futures end mixed, with nearby contracts climbing on short-term supplies, and the possibility of Chinese purchases. Deferred contracts, meanwhile, slide on the USDA's outlook for 94 million corn acres this year, a number some traders say could grow even larger if warm weather allows farmers to plant early. CBOT March corn ends up 3 3/4c to $6.44 1/2 a bushel, Dec corn ends down 1c to $5.57.

Wheat (Source:CME)
US wheat futures end higher on strength in soybeans and short-covering. Traders say that speculators' huge net-short position leaves the market primed for gains as they cover those. Fundamentally, the market has little supportive news as world supplies are abundant and weather is favorable for US crops. But persistent gains in soybeans, driven by South American crop concerns, are underpinning the whole grains complex, traders say. CBOT March wheat ends up 4 3/4c at $6.45 3/4 per bushel, KCBT March rises 4c to $6.85 and MGEX March adds 4 1/4c to $7.90 3/4.

Rice (Source:CME)
US rice futures end flat as weak world demand and domestic acreage concerns keep the market range-bound. Shawn Hackett of Hackett Financial says the market could be poised for a rally as exports pick up, with purchases from China potentially serving as a spark. CBOT March rice closes down 1/2c at $14.20/hundredweight.

U.S. soy, wheat up; corn drops on record f'cast
NEW DELHI, Feb 27 (Reuters) - U.S. soybean futures rose on robust demand from China, while wheat gained despite Friday's higher output forecast by the U.S. Department of Agriculture.  
"There are a lot of orders for soybeans from China and most market participants believe the demand is going to be very strong in the days to come," said Jonathan Barratt, chief executive of BarrattBulletin, a Sydney-based commodity research firm.

Vietnam's Jan-Feb rice exports down 26.6 pct y/y-Ag Min
HANOI, Feb 27 (Reuters) - Vietnam's rice exports in the first two months of 2012 dropped 26.6 percent from the same period of 2011 to an estimated 756,000 tonnes, the Agriculture Ministry said on Monday.
Rice-export revenue in January-February fell 16 percent from a year ago to an estimated $437 million, the ministry said in its monthly report.

Drought-weary Texans welcome rains, wildflowers
SAN ANTONIO, Feb 26 (Reuters) - San Antonio resident Janet Garibay is starting the process of bringing her lawn back from the dead.
"Our yard was destroyed by the drought," said Garibay, who visited a local home-improvement store on Saturday to pick up shrubs, plants and grass seed. "We're hoping that this rainier weather will help us put it together again."

Argentine farmers finish seeding soy, corn- gov't
BUENOS AIRES, Feb 24 (Reuters) - Argentine farmers have finished planting the 2011/12 soybean and corn crops, both of which suffered from a drought earlier in the season, the government said on Friday in its weekly crop report.
Argentina is one of the world's top exporters of corn, soybeans, soyoil and soymeal. The government forecasts soy production of 43.5 million to 45 million tonnes, and corn output of between 20.5 million and 22 million tonnes.

Manitoba court will not suspend Canada Wheat Board law
Feb 24 (Reuters) - A Manitoba court cleared away some of the uncertainty surrounding Western Canada's move to an open grain market on Friday, rejecting a request to suspend a federal law that ends the Canadian Wheat Board's marketing monopoly.  
The court case, one of several challenges to Ottawa's decision to scrap the Canadian Wheat Board's monopoly, was launched by eight former directors of the CWB who wanted farmers to decide whether to keep the monopoly.

Argentine grains truck owners vow strike in March
BUENOS AIRES, Feb 24 (Reuters) - Owners of Argentine grain trucks vowed on Friday to strike starting March 19 to demand higher transport rates, a protest that could disrupt hauling during early corn and soy harvesting.
Argentina is one of the world's top exporters of corn, soybeans and soy products, most of which are moved to port by truck. Strike threats are common at this time of year as labor unions seek annual wage hikes.    

EU seeks tighter CO2 grip on farms, forests -draft
BRUSSELS, Feb 24 (Reuters) - The EU forestry and farming sectors will have to monitor and report from 2013 changes to land use that could affect greenhouse gas emissions, as part of the bloc's measures to curb climate change, under a draft law seen by Reuters.
The proposal, expected to be published officially next week, does not go as far as setting firm targets for limiting land-use change.

Kazakhstan plans to create national grain company
ASTANA, Feb 24 (Reuters) - Kazakhstan, a top-10 world wheat exporter, unveiled a tentative plan on Friday to create a national grain company funded by the state and private business that would equip the former Soviet republic with better infrastructure to move its grain to market.
The company, a response to President Nursultan Nazarbayev's call to better organise the grain business, would trade Kazakh grain on international markets and invest in new elevators, rail and port capacity, the Agriculture Ministry said.

Farmers Put Squeeze On Corn (Source:CME)
A new phenomenon is underpinning corn prices: prosperous farmers. Having benefited from high prices last year, farmers are becoming more choosy about when they sell their corn. Right now, some are opting to stockpile some of their harvest, rather than sell it, a decision analysts say is helping keep corn prices relatively high. Farmers now hold about 64% of the nation's corn in storage, up from 62.7% a little over a year ago and the highest in two years, according to the latest quarterly government survey. The increase, while modest, comes as the U.S. Department of Agriculture projects global corn stockpiles will drop to the lowest level since the 1973-74 crop year, in terms of days of use. This is causing an unusual supply squeeze in parts of the Midwest, driving prices higher for grain processors, livestock ranchers and ethanol makers. The added cost could pinch buyers' profit margins and could spur them to try to pass the added costs onto customers.
"The producer does have a stronger hand," says Rich Feltes, vice president for research at futures broker R.J. O'Brien in Chicago. Rick Elliott, a farmer in Monmouth, Ill., has about 350,000 bushels of corn in storage, up from his typical 300,000 bushels at this time of year. He has invested in new grain bins that have helped him and his family more than double their storage space in 10 years. "Bins have always made us money," he says. "It gives us lots of options." The stockpiling has upended the usual price cycle for corn. The grain is typically plentiful in the Midwest -- where most U.S. corn is grown -- at this time of year, in the months after the harvest, and often sells there at a 10-cent to 30-cent discount to the price in the futures market, R.J. O'Brien's Mr. Feltes says.
But this year, some buyers in parts of the Midwest are paying a premium. On Friday, Cargill Inc., one of the nation's largest grain processors, offered 25 cents a bushel above the base-line futures price for corn at its grain elevator in Bloomingburg, Ohio. Overall, corn prices in the U.S. futures market have nearly doubled since mid-2010, when worries about a weak corn harvest were at their peak. They have slipped slightly from a 2011 record, and farmers are expected to plant lots of corn this year. Corn futures for March delivery edged up 0.2% Friday to settle at $6.4075 per bushel, still down 0.9% so far this year. By holding onto corn, farmers are betting prices will resume their recent upswing. The strategy carries risks, including the chance that corn prices could drop sharply. Mr. Elliott, the western Illinois farmer, protects himself by buying options that, in effect, guarantee him a certain floor price.
The U.S. Department of Agriculture recently forecast that farmers would plant more acres of corn than at any point since 1944. If the prediction proves correct, a large crop could undercut prices. Higher crop prices helped push net farm income to $98.1 billion last year, up 24% from 2010, according to the USDA. A shrinking debt load among U.S. farmers also is contributing to their ability to hang onto corn. Last year, the total debt of all farms added up to 10.5% of assets, the lowest level since 2007, according to the USDA. Debt as a percentage of assets is significantly lower than a decade ago, and the proportion is half that of 1986, when it was 21%. That mountain of debt triggered the 1980s farm crisis, as farmers who had borrowed heavily as property values soared faced foreclosure when the prices reversed.
"Farmers are paying off loans," says Jason Henderson, an economist at the Federal Reserve Bank of Kansas City and the top executive of its Omaha, Neb., branch. They are using cash to pay for seeds and fertilizer for this year's crop, rather than buying on credit, he says. To store their inventory, farmers are investing in grain bins that can hold tens of thousands -- or even hundreds of thousands -- of bushels of corn that can often be stockpiled for months. Farmers have 12.8 billion bushels of total grain storage capacity, according to the latest U.S. government figures, up 10% from 11.7 billion in 2006. The current capacity would hold last year's entire corn harvest. Mr. Elliott says he isn't trying to drive prices up by holding on to his corn, and can't sway the market as an individual farming operation, but plans to wait until prices have risen before selling. There are other reasons why corn is piling up in some places. It can be a logistical challenge to get a bumper crop to market quickly.
But some farmers are simply waiting for higher prices, says Lance Tarochione, who grows corn in London Mills, Ill., and also works with other farmers as a seed agronomist. "Although historically these prices are amazing, they're not as high as they were a while ago. I think guys are just thinking this will come back," he says. "They're gambling that holding it is going to make them money."

Soybean Reserves Shrinking Most Since ’96 Amid Brazil Drought: Commodities (Source: Bloomberg)
Global reserves of soybeans are shrinking the most in 16 years as demand for food, feed and fuel rises, creating the biggest-ever exports for U.S. farmers. Inventories (US38ESWR) at the start of the next season on Oct. 1 will be 20 percent lower than a year earlier, Jefferies Bache LLC predicts. Prices that rose 7.8 percent since Dec. 30 will gain another 7.5 percent to $14 a bushel by June, the New York-based commodities trader estimates. China signed deals in the week ended Feb. 17 to buy 13.4 million metric tons from the U.S., about what its own farmers grow in a year. The U.S. Department of Agriculture anticipates record global exports in 2012. The oilseed’s gains contrast with outlooks for wheat and corn, with the United Nations forecasting record supplies of cereals this year in response to prices that more than doubled since 2005.
Soybean futures in Chicago fell to a 14-month low in December, spurring U.S. farmers, the world’s top growers, to consider switching more land to grains just as drought curbed harvests in South America, the largest producing region. “Tight supplies will continue until the end of next year,” said Dan Cekander, the director of grain research at Newedge USA LLC, the biggest broker on the Chicago Board of Trade, where contracts for about 24.4 million tons of soybeans traded daily last year. “The smaller crop in South America means China will buy record quantities of U.S. soybeans.”

Soybean Futures Advance on Signs U.S. Exports to Increase; Corn Rebounds (Source: Bloomberg)
Soybean futures rallied to a five- month high on speculation that demand will increase for U.S. exports after drought damaged crops in South America. Corn also rose. Soybean output in Brazil, the world’s largest grower after the U.S., will drop to 68 million metric tons this year from 75.3 million in 2011, researcher AgRural Commodities Agricolas, based in the state of Parana, said today. The crop in Argentina (US38PRAR) will be 44.5 million tons, down from a January forecast of 49 million, the Rosario Cereals Exchange said Feb. 23. “Smaller crops in South America continue to provide support for the market,” Roy Huckabay, an executive vice president at the Linn Group in Chicago, said in a telephone interview. “People are looking for China to switch some purchases from South America to U.S. origin.”
Soybean futures for May delivery rose 1.2 percent to close at $13.025 a bushel at 1:15 p.m. on the Chicago Board of Trade, after reaching $13.04, the highest for the most-active futures since Sept. 22. Prices rose for a sixth straight session, the longest rally this year. The commodity is up 8.6 percent in February, heading for the biggest monthly gain since December 2010. Corn futures for May delivery advanced 0.7 percent to $6.485 a bushel on the CBOT, the fourth straight gain. The grain rose on speculation that China may boost purchases from the U.S. to rebuild inventories before the growing season, after domestic prices reached a five-month high, Huckabay said. “It’s cheaper to import U.S. corn into China than to use domestic supplies,” Huckabay said. The U.S. was the world’s largest exporter of both commodities in the year that ended Sept. 30, according to government estimates. Corn is the biggest U.S. crop, valued at $76.5 billion in 2011, followed by soybeans at $35.8 billion.

Vietnam Feb coffee exports jump, no impact on price
HANOI, Feb 27 (Reuters) - Vietnam's coffee exports this month rose at least a quarter from a year ago, but traders said the volume would not affect prices as the beans were mostly going to roasters, and February shipment only offset a decline in a holiday-shortened January.
The government's General Statistics Office (GSO) estimated February shipment at 180,000 tonnes, below a projection of 200,000 tonnes by the Agriculture Ministry, but still in line with market expectations of between 120,000-200,000 tonnes.

China cotton imports down 1 mln ba in 2012/13-USDA
WASHINGTON, Feb 24 (Reuters) - China will cut its cotton imports by 1 million bales to 16 million bales of cotton in 2012/13 from the previous year, the U.S. Agriculture Department said on Friday, as world cotton consumption rises for the first time in three years.
At its annual Outlook Forum, USDA said China's domestic support price, which is higher than projected world prices, "is likely to constrain consumption growth and support demand for imported raw cotton and yarn, as well as synthetic fibers."

China May Double Rare Earth Exports as Demand Rises on Price (Source: Bloomberg)
China, the biggest supplier of rare earths, may almost double exports this year and meet quotas set by the government as lower prices stimulate demand. Chinese exports were 49 percent of the government-alloted quota in the first 11 months of last year because the slowing global economy sapped demand, the Ministry of Commerce said in a Dec. 27 statement. Overseas sales quotas may be virtually unchanged this year at 31,130 metric tons, based on Bloomberg calculations. “Export quotas may be met this year as overseas demand recovers,” Wang Caifeng, a former official overseeing the rare- earth industry with the Ministry of Industry and Information Technology, said in an interview in Beijing. “High prices last year had deterred purchases and led to inventories’ depletion. Smuggling also hampered exports through illegal channels.”

Euro Coal-Trades sideways, producers seek $125 Newc
LONDON, Feb 24 (Reuters) - Prompt physical coal prices held steady on Friday after a day dominated by index-linked Q4 rather than fixed-price trades and despite a rise in oil and falls in gas and power.
Utilities have continued to shed unwanted DES ARA coal for next winter and show little interest in prompt cargoes because stockpiles are high and warmer weather has cut demand for power and heating.

US coal consumption fell 7 pct last week - Genscape
HOUSTON, Feb. 24 (Reuters)- - U.S. coal consumption fell 7 percent last week from the previous week and was down 8 percent from the same week a year ago, power industry data monitor Genscape said Friday.  
Coal use swings up and down seasonally, and varies from week  to week and region to region, depending on electricity demand to  run air-conditioners or power heaters.  

Brent slips below $125 but supply concerns support
SINGAPORE, Feb 27 (Reuters) - Brent crude slipped below $125 and snapped five days of gains with investors booking profits after prices surged to 10-month highs due to concerns over supply disruption as tension rose over Iran's disputed nuclear programme.
"There were big gains in the oil market in the last 10 days because of the Iran issue," said Ken Hasegawa, a Tokyo-based commodity sales manager at Newedge Japan. "We may see prices come down $2 to $3 a barrel in the next few days unless there is
some change in the fundamental factors."

Oil Drops a Second Day on Concern Prices Near 9-Month High May Curb Demand (Source: Bloomberg)
Oil dropped for a second day in New York as investors bet rising U.S. stockpiles signal easing fuel demand amid prices near the highest in nine months. West Texas Intermediate futures slipped as much as 0.6 percent after falling for the first time in eight days yesterday. U.S. supplies probably rose 1.1 million barrels last week, according to a Bloomberg News survey before a government report tomorrow. Consumer demand for oil may deteriorate after prices for Brent crude breached a record in euros and pounds, according to Morgan Stanley. “U.S. demand is particularly weak,” Michael McCarthy, a chief market strategist at CMC Markets Asia Pacific Pty, said by telephone today. “West Texas and Brent contracts hit technical levels and so we saw some pullback.”
Oil for April delivery fell as much as 66 cents to $107.90 a barrel in electronic trading on the New York Mercantile Exchange and was at $108 at 11:26 a.m. Sydney time. The contract yesterday slid 1.1 percent to $108.56, snapping the longest winning streak since January 2010. Prices rose 6.3 percent last week to the highest since May 3.

Japan's Iran crude imports fall 12.2 pct yr/yr in Jan
TOKYO, Feb 27 (Reuters) - Japan's customs-cleared crude imports from Iran fell 12.2 percent in January from the same month a year ago, a much sharper decline than for overall imports, as Japan strives to avoid U.S. sanctions, Ministry of Finance data showed on Monday.
The cuts were much sharper than the fall of 2.1 percent in the nation's total crude imports last month. But crude imports from Iran were higher in January than December, as January and February tend to be the two peak months of imports in the winter season.

Gold’s Use to Back Value of Dollar Would be Impractical or ‘Even Damaging’ (Source: Bloomberg)
Gold’s use to back the value of the dollar would be impractical and there is little scope for the metal to play a more formal role in the international monetary system, U.K. research institute Chatham House said. While a higher gold price may reflect a lack of confidence in key currencies and low returns on other assets, there’s no consistent correlation between bullion and economic variables that could be used to inform policy decision making, according to a task force that discussed possible roles for gold. The metal can be used to hedge against currency devaluation and other risks as part of a portfolio, but not on its own, it said.
Richard Nixon, the former U.S. president, abandoned the Bretton Woods arrangement four decades ago. Between 1968 and 1971, the metal and the dollar were officially exchanged at a fixed rate after the system had tied gold at about $35 an ounce, according to the World Gold Council. Central banks are expanding bullion reserves for the first time in a generation as prices gained for 11 consecutive years, reaching a record in September.

Iron Ore-Shanghai rebar rises 1.4 pct on demand hopes
SINGAPORE, Feb 27 (Reuters) - China steel futures rose the most in nearly six weeks on Monday, spurred by hopes demand in the world's No. 1 steel consumer and producer would bounce back next month and boost appetite for raw material iron ore.
Traders expect a resumption in construction activity in China, and expectations of a change in Beijing's leadership during an annual parliamentary session in early March, may lead to measures that would boost steel demand.

China imported iron ore stocks dip in wk ending Feb 24
BEIJING, Feb 24 (Reuters) - Stockpiles of imported iron ore at major Chinese ports fell fractionally this week to end Friday at 98.94 million tonnes, according to data from industry consultancy Mysteel.
Inventories have now fallen for three successive weeks after hitting a record 101 million tonnes in early February.

Baltic sea index rises on higher capesize rates
Feb 24 (Reuters) - The Baltic Exchange's main sea freight index, which tracks rates to ship dry commodities, jumped on Friday as rates for large capesize vessels rose on increasing iron ore activity.
The overall index, a gauge of the cost of shipping commodities such as iron ore, cement, grain, coal and fertiliser, rose 12 points or 1.7 percent to 718 points.

20120228 1011 Soy Oil & Palm Oil Related News.

Soybeans (Source:CME)
US soybean futures extend their recent rally, climbing to fresh five-month highs on strong export demand and declining South American crop forecasts. Soybeans grabbed the spotlight in the grain and oilseed complex, due in large part to an increase in export demand. Soybeans rallied to new near-term highs for the sixth consecutive day, as traders remain relentless buyers amid worries government forecasters are underestimating export demand. Smaller South American production forecasts continue to support soybeans, reflected by China, the world's leading importer of soybeans buying large amounts of beans from US last week, analysts say. CBOT May soybeans end up 15 3/4c at $13.02 1/2/bushel.

Soybean Meal/Oil (Source:CME)
Soy product futures rallied to multi-month highs in unison with soybeans. Ongoing worries about smaller South American crop potential and the positive impact that may have of US soy product demand attracted speculative buyers, analysts say. CBOT May soymeal ended up $7.40 to $343.50/short ton, May soyoil climbed 0.21c to 54.86 cent/pound.

Global Soybean Output To Hit 3-Year Low (Source:CME)
The International Grains Council has lowered its forecast for global soybean output in 2012-13 by almost 4%, as dry weather has affected yield potential in many areas of South America. Production is forecast at a three-year low of 246.5 million tons, down 7.6% from 2011-12 because of lower output in all major producing regions. The IGC tabulates its data over an aggregate marketing year covering all major producing and trading countries. "Adversely dry conditions during the growing season have negatively affected yields in many areas, particularly northern Argentina, southern Brazil and Paraguay," it said in a recent report. In southern Brazil states including Parana and Rio Grande do Sul, low soil moisture has significantly hampered crop development, it said. Brazil's soybean output may fall 8% to 69.4 million tons from the record reached in 2011-12; down 3.3% from the IGC's earlier forecast, it said.
The IGC lowered its forecast for Argentina's soybean output in 2012-13 by almost 10% to 46 million tons, down 6% from last year's actual production. "Prolonged dryness has resulted in irreversible yield reduction in some areas of Argentina," it said. Paraguay's production may fall by 40% to just 5 million tons, it said. Meanwhile, demand is strong. Although the IGC lowered its forecast for China's soybean imports by 1 million tons, at 56 million tons, it would be a record, up 7% from last year. The pace of South America's soybean exports from last year's harvest have been exceptionally strong, and shipments from Brazil and Argentina were almost three times higher during October-December than year earlier, IGC said.
However, shipments from South America will likely slow in the next few months due to reduced output, it said. The IGC lowered its forecasts for Brazil and Argentina's soybean exports in 2012-13 by 2.2% and 17%, respectively, while raising it forecast for U.S. soybean exports by almost 3% due to a shift in demand from South America. The global soymeal trade will likely reach a record 58.4 million tons, up 2.6% on year, the IGC said, citing rising demand in East Asia and the European Union.

Palm hits near 9-mth high on exports, firm crude
SINGAPORE, Feb 27 (Reuters) - Malaysian crude palm oil futures rose to an eight-and-a-half month high with export data pointing to improved demand prospects and high oil prices also providing support.
"The export trend is positive for crude palm oil prices. High oil prices will also be supportive because about 11 percent of global vegetable oil is used for biodiesel," said Alan Lim, research analyst with Malaysia's Kenanga Investment Bank.

India's rapeseed output in 2012 seen down-trade body
NEW DELHI, Feb 27 (Reuters) - India's rapeseed output is expected to fall 8.5 percent to 6.3 million tonnes in 2012 on lower acreage of the oilseed crop, a trade body survey showed on Monday.
Reuters reported on Feb. 1 that the county could see a drop in the rapeseed crop, meaning that vegetable oil imports by the world's top buyer could rise by about a half a million tonnes in the import year ending Oct. 31.

Malaysia IOI to build Indonesian palm oil refinery in 3 yrs
PUTRAJAYA, Malaysia, Feb 27 (Reuters) - Malaysia's second largest listed palm planter IOI Corp  will build a palm oil refinery in Indonesia once it generates enough feedstock from its plantations in Borneo island in the next three years, a top official said on Monday.
Foreign firms have been scrambling to set up processors in the world's top producer of the tropical oil to tap higher margins after Jakarta last year slashed export taxes of the refined grade to half of that of the crude variety.

New Britain Palm Oil 2012 output seen flat
JAKARTA, Feb 24 (Reuters) - Output from New Britain Palm Oil's  Asia operations will be flat at 591,000 tonnes this year after soaring 21 percent in 2011, an executive said on Friday, adding that plantation expansion may rise by between 2,000-5,000 hectares per year.
Last year, palm oil output by NBPO, which is headquartered in Papua New Guinea and Singapore, rose 21 percent with the help of an acquisition the previous year and favourable weather, Executive Director Alan Chaytor told Reuters on Friday.