Wednesday, February 29, 2012

20120229 1811 FCPO EOD Daily Chart Study.

FCPO closed : 3270, changed : -25 points, volume : lower.
Bollinger band reading : pullback correction upside biased.
MACD Histrogram : weakening, buyer taking profit.
Support : 3250, 3200, 3150, 3100 level.
Resistance : 3270, 3300, 3350, 3420 level.
Comment :
FCPO closed recorded losses with slower volume participation. Soy oil price currently trading little lower after overnight closed recorded marginal loss while crude oil price trading higher after overnight closed corrected lower.
Declined export data reported by 2 cargo surveyor and declining crude oil price resulted FCPO to pullback lower today and recent rallies.
Daily chart study suggesting a pullback correction upside biased market development.
When to buy : buy at support or weakness with quick cut loss and profit target.
When to sell : sell at resistant or strength with quick cut loss and profit target.

20120229 1732 FKLI EOD Daily Chart Study.

FKLI closed : 1573, changed : +17 points, volume : lower.
Bollinger band reading : correction range bound upside biased.
MACD Histrogram : turned upward, buyer seller battling.
Support : 1570, 1565, 1550, 1540 level.
Resistance : 1580, 1590, 1600, 1610 level.
Comment :
FKLI closed rallied higher with declining volume transacted with Mar 2012 contract doing 3 points premium compare to cash market that also closed higher. Overnight U.S. markets closed higher and today Asia markets traded positively while European markets also rising higher.
Improved U.S. consumer confident, better Japan and South Korea factory output continue to lift global markets higher while investors awaits details from latest round of European Central Bank funding to banks.
FKLI daily chart analysis still suggesting a correction range bound upside biased market development with market reaching new 2012 high.
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.

20120229 1703 Regional Markets EOD Daily Chart Study.

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

20120229 1603 Global Market & Commodities Related News.

Stocks firm, euro steady ahead of ECB
TOKYO, Feb 29 (Reuters) - Asian stocks hit a seven-month high while the euro and commodity currencies held their ground on hopes a fresh cash injection by the European Central Bank will help further temper  market tension and underpin risk appetite.    
"Given the expectation we will see a generally healthy take up in the LTRO, it should keep risk assets well supported," said Mitul Kotecha, head of global foreign exchange strategy for Credit Agricole in Hong Kong.

FOREX-Euro pins hopes on ECB; yen retreats
SINGAPORE, Feb 29 (Reuters) - The euro and commodity currencies edged higher on Wednesday as hopes that European banks will take up a large offer of cheap three-year cash from the European Central Bank bolstered risk appetite.
The euro inched up 0.1 percent to $1.3476 , having climbed 0.5 percent on Tuesday. It held near a 2-1/2 month peak around $1.3486 set on Friday and was on track to end the month up 3 percent, its best performance since October.

First Resources sees CPO output rising 10 pct
SINGAPORE, Feb 29 (Reuters) - Singapore-listed First Resources Ltd , which has oil palm plantations in Indonesia, sees its crude palm oil output rising by 10 percent this year as a larger number of trees become more productive, its chief executive told Reuters on Wednesday.
First Resources, which has market capitalisation of $2.2 billion, produced 452,113 tonnes of crude palm oil (CPO) in 2011, a 20 percent rise from a year earlier.

US soy drops from 5-month high; corn, wheat ease
SINGAPORE, Feb 29 (Reuters) - U.S. soy edged lower as the market took a breather after seven straight sessions of gains as concerns grew about South American output, and wheat eased from its highest in nearly three weeks amid plentiful supplies.
"The markets are positioning at the month-end. Beans are taking a few steps lower, and certainly that comes on the back of the solid run in global soybean prices," said Luke Mathews, commodities strategist at Commonwealth Bank of Australia.

China soy crushing margins improve amid low stocks - CNGOIC
BEIJING, Feb 29 (Reuters) - Soy crushers in China, the world's top buyer of the oilseed, have increased output in recent weeks because of improved crushing margins, which should boost soy imports, an official think-tank said on Wednesday.
Robust demand from China has already driven up Chicago Board of Trade soy prices  to a five-month high this week.

Ships wait 15-20 days to load Brazilian grains
SAO PAULO, Feb 28 (Reuters) - Brazil's impaired TGG soy and corn loading terminal at Santos is so far not having an impact on ship waiting times to carry grains from Brazilian ports to international markets, traders and vessel line-up data showed Tuesday.
Brazil's TGG, Santos' main grain terminal, said on Feb. 17 had resumed loading soybeans, meal and corn at half capacity, ending a five-day interruption to exports from the main grain terminal in the country that should lead the world in soybean exports this year.

Soybean output set for record 19 mln T fall-Oil World
AMSTERDAM, Feb 28 (Reuters) - Global soybean output this year is set for a record drop of 7.2 percent, or 19 million tonnes, mainly due to bad weather conditions in key growing areas in South America, Germany-based analyst Oil World forecast on Tuesday.
"World production of soybeans is likely to plunge by (a)staggering 19 million tonnes to only 246.5 million tonnes in 2011/12, according to our current estimates - the biggest year-on-year reduction ever registered," Oil World said in a monthly report.

S.Africa's 2011/12 maize output seen up 13 pct
JOHANNESBURG, Feb 28 (Reuters) - South Africa's maize output is likely to rise by 13 percent this year as higher prices boost plantings of the staple grain, the government said on Tuesday.
Africa's biggest maize producer would harvest 11.7 million tonnes of the maize in the current 2011/12 production season, compared with 10.36 million tonnes in the last season, the Crop Estimates Committee said.

Russia may export up to 28 mln T of grain in 11/12-Ifax
MOSCOW, Feb 28 (Reuters) - - Russian Agriculture Minister Yelena Skrynnik raised the grain export forecast for the 2011/12 crop year by 12 percent to as much as 28 million tonnes, news agency Interfax reported on Tuesday.
"Deliveries of Russian grain to the world market are being set in the amount of 27-28 million tonnes," she was quoted as saying at roundtable talks during the Russian Agrarian Forum in Ufa.

Brent rises above $122 as ECB's cheap loan may spur buying
SINGAPORE, Feb 29 (Reuters) - Brent crude rose above $122, snapping two days of losses, in line with gains across broader financial markets on expectations that cheap loans to be offered by the European Central Bank will spur buying of riskier assets.
"Today, the market is getting ready for the ECB announcement, and is reacting to the dollar," said Ric Spooner, chief market analyst at CMC Markets.

Vietnam Feb crude oil output rises 11 pct y/y-govt
HANOI, Feb 29 (Reuters) - Vietnam produced an estimated 1.28 million tonnes, or 323,500 barrels per day (bpd), of crude oil in February, up 11 percent from the same month in 2011, the government said on Wednesday.
January's actual output was revised down to 1.42 million tonnes from an earlier estimate of 1.45 million tonnes. The actual amount was up 11.8 percent from 1.27 million tonnes pumped in January 2011, the General Statistics Office said in its monthly report.

POLL-US crude stocks seen up for second week
Feb 28 (Reuters) - U.S. crude oil stockpiles likely rose last week for the second straight period on higher imports, an extended Reuters poll showed on Tuesday.  
On an average, analysts called for a build of 1.1 million barrels in crude stocks for the week of Feb. 24, with 12 out of 14 analysts polled predicting a build.

Oil drops again amid fears of slowing demand
NEW YORK, Feb 28 (Reuters) - Oil prices fell a second day on Tuesday as worries that recent price increases may hurt demand prompted investors to sell and take profits on recent gains, moves that more than offset support from possible Middle East supply disruptions.
Sell stops were triggered in a late-session swoon as Brent crude tested below its 10-day moving average, as did U.S. gasoline and heating oil  futures as front-month March contracts approached Wednesday's expiration.

Rio says world needs 100 mln T/yr new iron ore output
BEIJING, Feb 29 (Reuters) - The world will need 100 million tonnes of new iron ore capacity per year for the next eight years and global miner Rio Tinto  sees itself supplying a quarter of that capacity, Sam Walsh, the head of Rio's iron ore unit, said on Tuesday.
Rio, which is ramping up its iron ore production in Western Australia, said other miners would struggle to meet China's vociferous demand as they would likely be hit by project delays.

China steel output growth seen slower, Cliffs says
Feb 28 (Reuters) - Chinese steel production has slowed in recent weeks, but is still expected to grow this year, according to Cliffs Natural Resources  which produces iron ore and coking coal for steel-making.
"It is a little softer than we expected after the (Chinese) New Year," Cliffs Chief Financial Officer Laurie Brlas said on Tuesday.

China steel output growth seen slower, Cliffs says
Feb 28 (Reuters) - Chinese steel production has slowed in recent weeks, but is still expected to grow this year, according to Cliffs Natural Resources  which produces iron ore and coking coal for steel-making.
"It is a little softer than we expected after the (Chinese) New Year," Cliffs Chief Financial Officer Laurie Brlas said on Tuesday.

Copper retreats from 2-week high, ECB eyed
SINGAPORE, Feb 29 (Reuters) - London copper pulled back from two-week highs touched in the previous session ahead of a fresh injection of cash by the European Central Bank to ease debt strains, with another upbeat piece of U.S. data helping to stem losses.
"We are seeing a consolidation, but the market looks like it can still go higher later in the day with the ECB injection. The upside is likely to be capped at $8,800," he said.

Gold edges up ahead of ECB loan offer
SINGAPORE, Feb 29 (Reuters) - Gold edged higher , after rallying 1 percent in the previous session, supported by expectations for more cheap loans to be offered by the European Central Bank later in the day.
"There is so much cheap money around," said Ronald Leung, a dealer at Lee Cheong Gold Dealers in Hong Kong.

Baltic sea index up, Chinese iron ore demand helps
Feb 28 (Reuters) - The Baltic Exchange's main sea freight index, which tracks rates for ships carrying dry commodities, inched higher on Tuesday as Chinese interest in buying iron ore kept rates steady for large capesize vessels.
The overall index that reflects daily freight market prices for capesize, panamax, supramax and handysize dry bulk transport vessels rose 8 points or 1.1 percent to 738 points. The index has however lost 1000 points or 57 percent this year.

METALS-Copper retreats from 2-week high, ECB eyed
SINGAPORE, Feb 29 (Reuters) - London copper pulled back on Wednesday from two-week highs touched in the previous session ahead of a fresh injection of cash by the European Central Bank to ease debt strains, with another upbeat piece of U.S. data helping to stem losses.
The European Central Bank is expected to pump half a trillion euros into the euro zone's troubled financial system for the second time in as many months later in the day in what it hopes will be the last such operation to fight the euro zone crisis.

PRECIOUS-Gold edges up ahead of ECB loan offer    By Rujun Shen
SINGAPORE, Feb 29 (Reuters) - Gold edged higher on Wednesday, after rallying 1 percent in the previous session, supported by expectations for more cheap loans to be offered by the European Central Bank later in the day.
Cash gold was on course for a monthly gain of 2.6 percent in February ahead of the expected injection of nearly half a trillion euros by the ECB, seen as designed to buy more time for European politicians to resolve the region's debt woes.

20120229 1058 Global Market & Commodities Related News.

GLOBAL MARKETS-Stocks firm, euro steady ahead of ECB
HONG KONG, Feb 29 (Reuters) - Asian stocks firmed and the euro held its ground on Wednesday ahead of a fresh cash injection by the European Central Bank, while strong U.S. consumer confidence data and a drop in oil prices bolstered Wall Street.
Markets expect European banks to borrow about 500 billion euros ($670 billion) of cheap funds on offer from the ECB later on Wednesday, although forecasts range from 200 billion to 750 billion euros, according to a Reuters poll.
GLOBAL MARKETS-Stocks firm, euro steady ahead of ECB
HONG KONG, Feb 29 (Reuters) - Asian stocks firmed and the euro held its ground on Wednesday ahead of a fresh cash injection by the European Central Bank, while strong U.S. consumer confidence data and a drop in oil prices bolstered Wall Street.
Markets expect European banks to borrow about 500 billion euros ($670 billion) of cheap funds on offer from the ECB later on Wednesday, although forecasts range from 200 billion to 750 billion euros, according to a Reuters poll.

COMMODITIES-Metals jump as oil prices fall, euro climbs
NEW YORK, Feb 28 (Reuters) - Crude oil fell about 2 percent by Tuesday's close as investors took profits after recent gains, while other commodities, like gold and base metals, were lifted by a stronger euro, Europe's expected injection of low-interest cash, and improved U.S. consumer confidence.
"They are almost saying that we're going to let you lend pretty much on anything, as long as they don't allow free capital outflows," said Howard Simons, strategist at Bianco Research Group in Chicago.

Oil's rise puts sanctions under spotlight
(John Kemp is a Reuters market analyst. The views expressed are his own)
LONDON, Feb 28 (Reuters) - U.S. and EU sanctions on Iran's crude oil exports and its central bank were not supposed to affect either the volume of oil available or its price, provided markets reacted "rationally".
That was the conclusion of an influential report on the "Oil Market Impact of Sanctions Against the Central Bank of Iran", circulated by sanctions advocates at the Foundation for Defense of Democracies in Washington.

Oil drops again amid fears of slowing demand
NEW YORK, Feb 28 (Reuters) - Oil prices fell a second day on Tuesday as worries that recent price increases may hurt demand prompted investors to sell and take profits on recent gains, moves that more than offset support from possible Middle East supply disruptions.
"This sell-off is nothing but profit-taking," said Tony Rosado, options broker at GA Global Markets in New York.

US natural gas ends down for 4th day, forecasts turn milder
NEW YORK, Feb 28 (Reuters) - U.S. natural gas futures ended lower on Tuesday for a fourth straight session as the milder overnight turn in computer weather models and bloated supplies continued to weigh on prices despite some signs that the market may be tightening.
"Continued weak weather patterns as we wind down the heating season remains the primary price driver," Gelber & Associates analyst Pax Saunders said in a report, noting gas fundamentals were still "awful".

Euro Coal-Prices drop $1/T on oil, oversupply
LONDON, Feb 28 (Reuters) - Prompt physical coal prices fell by around $1.00 a tonne on Tuesday in line with an earlier dip in oil and pressured by oversupply, particularly in Europe.
"You can easily find all sorts of coal, every origin is available and U.S. material is being offered by traders, utility traders and producers directly - there's still too much coal," a source at a major European utility said.

20120229 1012 Malaysia Corporate Related News.

The first generation independent power producers (IPP) "must agree to reduce capacity payment for the current concession" in order to extend the existing power purchase agreements by 10 years, said Energy Commission (EC) chairman Tan Sri Dr Ahmad Tajuddin Ali. However, he declined to reveal the quantum for the capacity payment reduction. The capacity payment of IPP are not known as they are not revealed to the public. (Financial Daily)

18 entities comprising individual IPPs or a consortium of IPPs have submitted bids to the Energy Commission (EC) for the supply of up to 1,400MW of power to the country by 2016 and 2017. Energy Commission chairman Tan Sri Dr Ahmad Tajuddin Ali said prequalification will be carried out and the results will be known by March 19. "Those successful will be required to build gas-fired plants in Peninsular Malaysia," he said. The initial tender will be for a 750MW gas-fired plant in Prai, Penang. Some 4,500MW of newly-installed capacity will come on board Malaysia's power sector by 2016 and 2017. Out of the 3,500MW of power being offered for tenders, 1,400MW are for gas-fired plants while the remaining 2,100MW can be for new combined-cycle or coal-fired power plants. (BT)

As bids come in for his power assets, it is already evident that Ananda Krishnan could net a gain of up to RM4bn from his surprise privatization of Tanjong just 19 months ago at a cost of RM8.8bn. Saudi Arabia & Electricity Co is said to have bid as high as RM10.85bn for Ananda’s power assets, reportedly the highest among 12 bids received. (Financial Daily)

1Malaysia Development Bhd, a state investment company, is among bidders for billionaire Tan Sri T Ananda Krishnan's power assets in an auction that may raise about US$3bn (RM9.04bn), two people with knowledge of the matter said. As many as four groups have been put on a shortlist to bid for the assets, said one of the people, who declined to be named as the process is private. (Malaysian Reserve)

Perushaan Otomobil Nasional Bhd (Perodua) says its inventory has risen and could impact production if the new lending rules are not reviewed. Managing director Datuk Aminar Rashid Salleh said the automotive ecosystem has been hit by the new rules as approval time for loans has lengthened and thereby affecting sales of automotive dealers. He proposed that the new guidelines, which came into effect on January 1 this year, be implemented in stages to soften the impact on both the players and consumers. Aminar said financial institutions should take into consideration the government's desire to see growth in the industry by increasing competitiveness as well as a better business environment for all in line with the soon-to-be announced revised National Automotive Policy.(BT)

CWorks Systems Bhd, controlled by Mohamed Ridzuan Nor Md, is in advanced talks to take over privately-held Kpisoft International Pte Ltd (KIPL). At least two people familiar with the matter confirmed that Kpisoft’s management had made a presentation to the Cworks’ board yesterday.” They are expected to sign a deal soon so that the due diligence process can take place. An announcement to the stock exchange should come in sometime this week,” said one of the sources. Kpisoft made headlines late last year when a rival listed company said that it had bought a stake in it. In Nov, Fitters Diversified Bhd told Bursa Malaysia that it had purchased a 30% stake in Kpisoft for RM6.5m. Kpisoft’s revenue for the current year is expected to be in the RM20m range and Kpisoft is projecting RM10m pretax profit this year. “Furthermore both CWorks and KIPL are both IT (information technology) platform companies, hence there is room for synergies,” said the source. BT understands that a deal will be done via a share swap and some cash, as Cworks has zero gearing. Mohamed Ridzuan owns just under 9% of Cworks but parties aligned to him control some 27%, and by gaining control of Kpisoft, Cworks will be able to pitch for bigger government jobs. Kpisoft, which does scorecard management for the likes of Telekom Malaysia, Tenaga Nasional, Petroliam Nasional, Malayan Banking, Sime Darby and the Securities Commission. (BT)

The oil and gas (O&G) output is likely to see an upswing within the next five years and continue to contribute significantly, together with the services sector, to GDP. Datuk Seri Idris Jala said last year, the sector declined by 5.7% and the lower oil output had affected economic growth. Idris said O&G is still Malaysia’s single largest sector and if we had no decline, the GDP growth last year could have been more than 6% or maybe 6.5%. The decline was mainly due to the maintenance works in Peninsular Malaysia and the drop in production of the Murphy Oil’s Kikeh field. (Bernama)

Bread and confectionery maker Silver Bird Group Bhd's board is understood to have suspended three key executives, including the managing director, one executive director and the general manager with immediate effect, pending the outcome of an internal investigation into what is alleged to be financial irregularities, sources said. At present, the details of the alleged financial irregularities are not known. Silver Bird is expected to make an announcement pertaining to the delayed audited financial results and the suspension of its senior officials today. (Financial Daily)

AirAsia X is set to axe its KL-Christchurch-KL route, after withdrawal from popular European and Indian cities earlier this year. Some claimed that the airline was making losses on the route although it did stimulate demand for the twice weekly flights to New Zealand. AAX seemed to be focusing on routes that were in the eight to nine-hour flying radius. (Star Biz)

PJI Holdings Bhd has won two contracts worth more than RM31m in total, which are expected to be completed by Nov-2013. The company received a letter of award from Ocean Electrical Co Sdn Bhd worth RM22.1m for works in Penang. and from Bina Puri Sdn Bhd to undertake a RM9m subcontract for the execution of electrical services for a project in Kota Kinabalu. (BT)

Genting enters banking sector
In its maiden foray into the financial sector, Genting has joined CIMB and two individuals as shareholders of an investment banking advisory outfit in Sri Lanka. Through wholly-owned Vista Knowledge Pte Ltd, Genting will have a 20% stake in CIMB Pte Ltd, which is 45% owned by CIMB Group via CIMB Securities International Pte Ltd. CIMB Pte Ltd's other shareholders are Alex Lovell (20%) and Reshani Dangalla (15%). In an announcement to Bursa Malaysia, CIMB Group said it had entered into a deed of accession to the JV and shareholders' agreement to facilitate Vista Knowledge's entry into the JV, which was formed last August. (StarBiz)

TNB to shine in Q2
Tenaga Nasional is expected to perform better in the current second quarter ending today, thanks to higher average gas supply from Petroliam Nasional (Petronas) as well as the RM2bn compensation as part of fuel cost-sharing mechanism. President and CEO, Datuk Seri Che Khalib Mohamad Noh, said TNB’s financial performance would be better, given that it burned less distillates and oil, which was 5x more expensive. (StarBiz)

Oriental says no plan to privatize
Oriental Holdings says it has no intention to go for a privatization or undergo a leadership change at this moment. Oriental was responding to a recent article which said that the diversified company could be a privatization target following a recent slew of corporate moves. (StarBiz)

MAHB mulls raising stake in Istanbul airport
Malaysia Airports Holding (MAHB) may raise its stake in Istanbul’s second largest airport, according to three people with knowledge of the situation. The companies that operate Sabiha Gokcen International Airport are working with Rothschild to manage a potential sale. The process is at a preliminary stage and the other owners – MAHB’s joint-venture (JV) partners GMR Infrastructure Ltd and Limak Holding AS – haven’t decide if they will sell their stakes, the people said. (Malaysian Reserve)

TSM Global gets takeover offer of RM159m
TSM Global has received a takeover offer worth RM159.2m, or RM1.25/share, from West River Capital SB, a company controlled by TSM’s substantial shareholders and directors Datuk Lim Kheng Yew and partner Lim Tze Thean. TSM said the offer will be paid wholly by cash. (Malaysian Reserve)

Kelington announces 25% payout dividend policy
Kelington Group has decided on a dividend policy that will seek to pay out 25% of net profit as dividends, the gas and chemical solutions provider said in a filing to Bursa Malaysia yesterday. The policy will commence from FY11. (Malaysia Reserve)

Maybulk confident of staying profitable
Malaysia Bulk Carriers (Maybulk) is expected to take advantage of the current depressed freight market by acquiring more vessels this year. “We are monitoring the situation. We plan to reinvest our profits and to take opportunity of the current depressed freight market. If the current situation continues, we expect to see more shipping companies to be in financial distress and maybe face bankruptcy,” said CEO Kuok Khoon Kuan briefing yesterday. (BT)

Axiata: Celcom posts RM2.1bn net profit
CelcomAxiata has registered a net profit of RM2.1bn for FY2011. The figure is 11% higher  when compared to the RM1.89bn recorded in FY2010. Revenue rose 6% to RM7.23bn from  the RM6.85bn posted in FY2010, driven mainly by higher subscribers on the back of an  attractive product offering of bundled packages. Its CEO Datuk Seri Shazalli Ramly said the  current revenue growth was the strongest since 4Q FY2009. He said Celcom closed the year  with 12m subscribers, adding 542,000 more in the last quarter. He added that Celcom has  allocated RM1bn for capital expenditure this year, to be largely spent on information  technology development. (Business Times)

IOI Corp: Plans refinery in Indonesia
A top official from IOI Corp said the company will build a refinery in Indonesia once it  generates enough feedstock from its plantations in Borneo island in the next 3 years.  IOI  Corp's group executive director Lee Yeow Chor, said the firm's two Indonesian units will plant  25,000 hectares a year over the next 3 years  - an ambitious target given it has planted  2,200ha in FY2011. With a market value of RM34.9bn, IOI Corp currently has about 95,000ha  in Kalimantan after venturing into Indonesia in 2007. (Business Times)

Genting: FY2011 net profit rises to RM5.14bn
Genting Bhd has registered a net profit of RM5.14bn for FY2011, compared to RM3.41bn in  the year before.  This was posted on a higher revenue of RM19.56bn, compared to  RM15.19bn in FY2010. On a quarterly basis, the group posted a net profit of RM1.41bn for 4Q FY2011, compared to RM806.17m a year ago.  The group's profit for the 4Q included a  reversal of RM308.6m in respect of previously recognised impairment loss related to the UK  casino licences and a net fair value gain of RM64.4m on derivative financial instruments. It  also included a loss on discontinuance of cash flow hedge accounting using interest rate  swaps of RM145.4m arising from settlement of interest rate swaps. On the higher full-year  revenue, it was led by higher revenue of the leisure and hospitality division in Singapore,  Malaysia, the UK and the US. (Business Times)

UEM Land: Records RM140.5m in 4Q earnings, unbilled sales of RM1.85bn
UEM Land  posted a 3.84% increase in earnings to RM140.56m for  4Q FY2011, from  RM135.36m, due to improved performance from the group's various development activities.  It said that the board was confident of the group’s prospects in the coming financial year as  the on-going projects had unbilled sales of RM1.85bn as at Dec 31, 2011. The profits from  these future billings will be recognised substantially over the next two financial years. The  group will also be launching several residential and commercial projects in the Klang Valley,  Cyberjaya and Nusajaya in 2012.  (Financial Daily)

Mah Sing: FY2011 profit rises to RM238.63m
Mah Sing Group's pre-tax profit for FY2011 was up at RM238.63m from RM177.865m in  FY2010. Revenue for the year also rose to RM1.57bn versus the RM1.11bn, previously. The  group said revenue from the property segment improved 48% y-o-y to RM1.4bn, while the  group's property sales exceeded an internal target of RM2bn to end at RM2.26bn. For 4Q  FY2011, the company recorded a pre-tax profit of RM57.28m from RM39.212m, previously.  Revenue for the three-month period also rose to RM422.126m from the RM299.284m recorded in the corresponding quarter of FY2010. (BusinessTimes)

20120229 1013 Local & Global Economic Related News.

Malaysia's declining oil production has hit economic growth by as much as a full percentage point or more, said Minister in the Prime Minister's Department, Datuk Seri Idris Jala. However, the economy managed to grow by 5.1% last year showed that other sectors were still growing, he said. The output from the oil and gas (O&G) sector had declined by 5.7% last year. The decline in oil production was largely attributed to problems in the Kikeh oil field off Sabah and maturing oil fields off Peninsular Malaysia. Jala said that Murphy Oil had encountered "a serious problem" with sand in Kikeh which had impaired production levels and would take two years or more to fix. Under the Economic Transformation Programme, some RM132bn worth of commitments to O&G projects had been announced so far which would make it possible to arrest the decline of production over the next 10 years, he said. (Malaysian Insider)

The Philippines’ trade deficit narrowed to US$1.2bn in Dec (from US$1.6bn in Nov). (Bloomberg)

Total imports into the Philippines shrank 6.5% yoy in Dec, following a 0.7% increase in Nov. (Bloomberg)

China’s financial hub of Shanghai joined Beijing and Shenzhen in boosting the minimum wage by 13% to Rmb1,450 (US$230) a month, as policy makers seek to spur consumer spending. (Bloomberg)

The People's Bank of China met with banks to say it would inject money into the market if necessary to aid a liquidity shortage via possible open market operations. (Reuters)

South Korea’s current account recorded a US$772m shortfall in Jan, the first since Feb 2010’s deficit of US$549m, compared with a revised US$2.81bn surplus in Dec. The Bank of Korea expects the current account surplus to fall to around US$13bn this year from US$27.65bn in 2011. (AFP)

Japan: Back on track
Japan’s retail sales exceed economists’ forecasts in January, signaling a recovery in consumer spending that will help the world’s third-largest economy return to growth this quarter. Sales rose 1.9% from a year earlier, after a 2.5% increase in December, the Trade Ministry said yesterday. The median forecast of 15 economists surveyed by Bloomberg News was for a 0.1% decline. From a month earlier, sales gained 4.14%. (StarBiz)

India: Longest bond rally since 2008 seen ending on oil
India’s government bonds are set to reverse the longest rally since 2008, strategists predict, as surging fuel prices stoke inflation in the world’s fourth-biggest oil consumer. The yield on 10-year notes is headed for a fourth month of declines in February, falling seven basis points to 8.21%, according to the central bank’s trading system. The median forecast of seven financial companies in a Bloomberg survey is for the benchmark to rebound to 8.5% by the end of June. (Bloomberg)

Euro: ECB special lender status threatens bond backlash
The European Central Bank’s willingness to ride roughshod over bondholder rights risks pushing up borrowing costs for indebted governments by making investors less willing to lend. The ECB swapped about EUR50bn (USD67bn) of Greek bonds for new securities, identical to the old ones in every way save for identification numbers. The switch makes the ECB senior to other investors, exempting it from the largest sovereign restructuring in history as Greece rewrites the terms of its notes to ensure lenders forgive 53.5% of the debt. The European Investment Bank is getting a similar exemption, two regional officials familiar with the matter said. (Bloomberg)

Euro: Papademos gets backing for USD4.3bn of cuts in race for aid
Greece’s Parliament ratified a EUR3.2bn (USD4.3bn) package of spending cuts to the 2012 budget, taking PM Lucas Papademos one step closer to the country securing a rescue package to avert financial collapse. A total of 202 lawmakers voted in favor of the law and 80 against, Acting Parliament Speaker Grigoris Niotis said in remarks carried live on state-run Vouli TV yesterday after a roll-call vote. The vote is to be followed today by another that legislates permanent changes to pension funds and health-care spending, measures demanded by the European Union and International Monetary Fund in return for the EUR130bn lifeline. (Bloomberg)

US: Consumer confidence rises to one-year high
Confidence among US consumers climbed to a 12-month high in February, signaling household spending will help sustain the expansion. The Conference Board’s index increased more than forecast, to 70.8 from 61.5 in January. Americans are growing more upbeat after unemployment fell to a three year low and stock-market rally boosted household wealth, helping them withstand lower home prices and higher gasoline costs. Another report showed durable goods orders declined in January by the most since 2009 after the expiration of a tax break allowing full expensing of business equipment purchases. (Bloomberg)

US: Home prices in 20 cities decline 4%, more than forecast
Home prices in 20 US cities dropped more than forecast in December to the lowest level since the housing crisis began in mid-2006, indicating foreclosures are hampering the industry’s recovery. The S&P/Case-Shiller index of property values in 20 cities fell 4% from a year earlier, after decreasing 3.9% in November, a report from the group showed today in New York. The median forecast of 31 economists surveyed by Bloomberg News called for a 3.7% decline. (Bloomberg)

US: Durable goods orders slump 4%, most in three years
Orders for US durable goods fell in January by the most in three years, led by a slowdown in demand for commercial aircraft and business equipment. Bookings for goods meant to last at least three years slumped 4%, more than forecast, after a revised 3.2% gain the prior month, data from the Commerce Department showed today in Washington. Economists projected a 1% decline, according to the median forecast in a Bloomberg News survey. (Bloomberg)

20120229 0951 Global Market Related News.

Asian Stocks Advance, Headed for Bull Market, on U.S. Consumer Confidence (Source: Bloomberg)
Japanese stock futures and Australian equities advanced after U.S. consumer confidence jumped to a one-year high, boosting the outlook for Asian exporters to the world’s biggest economy. American depositary receipts of Toyota Motor Corp. (7203), Japan’s biggest carmaker that gets almost 30 percent of its revenue in North America, rose 0.6 percent from the closing share price in Tokyo. Those of Sony Corp. (6758) climbed 1 percent after a group led by the electronics maker sought European Union approval for its purchase of EMI Group’s publishing unit. Rio Tinto Group, the world’s No. 3 mining company by sales, gained 0.8 percent percent in Sydney after metals prices increased. Futures on Japan’s Nikkei 225 Stock Average (NKY) expiring in March closed at 9,785 in Chicago yesterday, compared with 9,760 in Osaka, Japan. They were bid in the pre-market at 9,780 in Osaka at 8:05 a.m. local time. Australia’s S&P/ASX 200 Index rose 0.2 percent today. New Zealand’s NZX 50 Index increased 0.5 percent in Wellington.

Japanese Stocks Advance as U.S., Europe Consumer Confidence Beat Estimates (Source: Bloomberg)
Japanese stocks advanced after consumer confidence in the U.S. and Europe beat expectations, boosting the earnings outlook for exporters. Nissan Motor Co. (7201), a carmaker that gets about 80 percent of its revenue abroad, climbed 0.9 percent. Sony Corp. (6758) rose 1 percent the electronics maker sought European Union approval to purchase EMI Group’s music publishing unit. Advantest Corp. (6857), a maker of memory-chip testers, jumped 3 percent after the Philadelphia Semiconductor Index (SOX) gained the most since Feb. 16. The Nikkei 225 Stock Average (NKY) rose 0.5 percent to 9,770.11 at 9:03 a.m. in Tokyo, extending a six-month high. The broader Topix gained 0.5 percent to 842.82, with more than three times as many shares advancing as falling. “The U.S. economy is recovering momentum, reducing uncertainty about the future of the global economy,” said Hiroichi Nishi, an equities manager in Tokyo at SMBC Nikko Securities Inc.

Dow Closes Above 13,000 for First Time Since ’08 (Source: Bloomberg)
U.S. stocks rose, sending the Dow Jones Industrial Average (INDU) to its first close above 13,000 since 2008, as better-than-estimated consumer confidence data and a drop in oil bolstered optimism in the world’s largest economy. Apple Inc. (AAPL) added 1.8 percent and its market capitalization approached $500 billion as it is said to unveil a new iPad next month. Micron Technology Inc. (MU) jumped 3.7 percent after buying Intel (INTC) Corp.’s stake in two wafer factories as the companies expand their venture. Intel advanced 1.3 percent. Inc. surged 7 percent to the highest level since 1999 (PCLN) as profit beat estimates. The Bloomberg U.S. Airlines Index rallied 1.7 percent as oil fell the most in more than five weeks.
The Standard & Poor’s 500 Index increased 0.3 percent to 1,372.18 at 4 p.m. New York time, gaining for a fourth day, the longest streak since Jan. 23. The Dow advanced 23.61 points, or 0.2 percent, to 13,005.12. The 30-stock gauge closed above 13,000 after three unsuccessful attempts over the past week. “13,000 is just a number,” Malcolm Polley, who oversees about $1.1 billion as chief investment officer at Stewart Capital in Indiana, Pennsylvania, said in a telephone interview. “The U.S. economy is in decent shape. The market is not expensive.”

European Stocks Rise on U.S. Consumer Confidence Report (Source: Bloomberg)
European (SXXP) stocks climbed as a report showed that U.S. consumer confidence beat economists’ forecasts, even after durable-goods orders in the world’s largest economy unexpectedly slumped. KBC Groep NV (KBC) rallied 4.7 percent after Banco Santander SA agreed to buy the Belgian lender’s Polish unit, Kredyt Bank SA. National Bank of Greece SA (ETE) dropped 6.7 percent as the shares of lenders retreated. TomTom NV (TOM2) plummeted 15 percent after forecasting lower revenue. The Stoxx Europe 600 Index increased 0.2 percent to 264.33 at the close, after earlier gaining as much as 0.4 percent and losing as much as 0.5 percent. The gauge has rallied 8.1 percent so far this year as the European (SXXP) Central Bank lent unlimited cash to the region’s banks. “The worse-than-expected durables goods data remind us that even though the situation is the U.S. is better than in Europe, the recovery is still fragile,” said Stephane Ekolo, chief European strategist at Market Securities in London.

Yen helped by Japan exporters month-end trades
TOKYO, Feb 28 (Reuters) - The yen pulled away from a 9-month low plumbed the day before on month-end buying by Tokyo exporters, although short-covering by hedge funds forced it to relinquish some early gains, traders said.
"A pretty natural dip after the February spike is setting in and is amplified by Japanese exporters," said Sumino Kamei, senior analyst at Bank of Tokyo-Mitsubishi UFJ in Tokyo.

Euro Approaches Three-Month High Before ECB Bank-Refinancing Operation (Source: Bloomberg)
The euro rose towards its strongest in almost three months on speculation the European Central Bank’s allotment of three-year loans to banks today will spur demand for the region’s assets. The yen slid against 15 of its 16 major peers on prospects the ECB action will boost buying of higher-yielding assets. The dollar held a two-day drop against Japan’s currency before Federal Reserve Chairman Ben S. Bernanke testifies to the House Financial Services Committee after saying Jan. 25 the bank is keeping open the option to increase bond purchases to support growth. Australia’s dollar reached a one-week high before a report forecast to show consumer spending climbed.
“This market is underweight risk, the market has not been committed to putting on the yield trade, and I think if you get a good number, the euro will do well,” said Kurt Magnus, executive director of currency sales in Sydney at Nomura Holdings Inc., referring to the ECB’s loan operation. “It would provide a stimulus to risk currencies and risk itself.”

U.S. Consumer Sentiment Climbs Toward ’08 Levels (Source: Bloomberg)
Consumer-confidence measures are climbing out of the depths reached during the last recession as employers step up hiring and stocks rally, signaling Americans may be poised to increase spending. The Conference Board’s gauge in February increased to the highest level in a year, figures from the New York-based research group showed today. The Bloomberg Consumer Comfort Index rose to an almost four-year high in the week through Feb. 19, and the Thomson Reuters/University of Michigan measure of consumer sentiment increased to 75.3 in February, the sixth straight monthly gain and the longest advance since 1997.  The last time the University of Michigan index stayed above 75 for more than two months was in the period through January 2008, a month after the end of the previous expansion. Consumers are likely to grow more optimistic as the two-year recovery boosts employment and incomes further, said Dean Maki, chief U.S. economist at Barclays Capital Inc. in New York.
“The major driver of the improvement in confidence has been the labor market,” Maki said. “We would expect consumer confidence to continue trending higher if the labor market continues to improve as we expect.”

Home Prices in 20 U.S. Cities Decline 4% (Source: Bloomberg)
Home prices in 20 U.S. cities dropped more than forecast in December to the lowest level since the housing crisis began in mid-2006, indicating foreclosures are hampering the industry’s recovery. The S&P/Case-Shiller index of property values in 20 cities fell 4 percent from a year earlier, after decreasing 3.9 percent in November, a report from the group showed today in New York. The median forecast of 31 economists surveyed by Bloomberg News called for a 3.7 percent decline. Distressed properties returning to the market mean prices will stay depressed, prompting buyers to wait for cheaper bargains and impeding construction. While sales have begun to stabilize, a rebound in home values may take time, underscoring Federal Reserve policy makers’ concern that weakness in housing is blunting their efforts to spur the economic expansion.
“We’re still dealing with a lot of distressed properties and very low absolute levels of demand,” said Sean Incremona, a senior economist at 4Cast Inc. in New York, who accurately projected the 4 percent drop. “We’re not seeing any of the stabilization in housing activity filter through to prices.”

Consumer Confidence Rises to One-Year High (Source: Bloomberg)
Confidence among U.S. consumers climbed to a 12-month high in February, signaling household spending will help sustain the expansion. The Conference Board’s index increased more than forecast, to 70.8 from 61.5 in January, figures from the New York-based private research group showed today. Economists projected the gauge would climb to 63, according to the median estimate in a Bloomberg News survey. Americans are growing more upbeat after unemployment fell to a three year low and stock-market rally boosted household wealth, helping them withstand lower home prices and higher gasoline costs. Another report showed durable goods orders declined in January by the most since 2009 after the expiration of a tax break allowing full expensing of business equipment purchases.
“We’re seeing further evidence the labor market is better,” said Joseph LaVorgna, chief U.S. economist at Deutsche Bank Securities Inc. in New York. With more improvement, “a self-sustaining feedback loop will become present whereby rising income engenders a further lift in confidence, which in turn lifts spending.”

Durable Goods Orders in U.S. Drop 4%, Marking Worst Decline in Three Years (Source: Bloomberg)
Orders for U.S. durable goods fell in January by the most in three years, led by a slowdown in demand for commercial aircraft and business equipment. Bookings (DGNOCHNG) for goods meant to last at least three years slumped 4 percent, more than forecast, after a revised 3.2 percent gain the prior month, data from the Commerce Department showed today in Washington. Economists projected a 1 percent decline, according to the median forecast in a Bloomberg News survey. The expiration at the end of 2011 of a tax incentive allowing full depreciation on equipment purchases may have prompted a slowdown in investment at the start of this year. At the same time, a strengthening auto industry may help keep factories at the forefront of the expansion that began in June 2009. “The expected weakness may not last, as the weak start to the quarter has tended to give way to a stronger end over the last 2 1/2 years since the recession ended,” Jonathan Basile, a senior economist at Credit Suisse in New York, said in an e-mail.

California Sells 38% of $2 Billion Debt as Market Rallies (Source: Bloomberg)
California (STOCA1), the most indebted U.S. state, took orders from individuals for $765 million of $2 billion in tax-exempt bonds with a preliminary yield of 2.7 percent for 10-year debt, according to the state treasurer. The first day of the sale saw robust demand even as the state lowered the yield by 1 percentage point from October, Treasurer Bill Lockyer said. Today’s orders accounted for 38 percent of the offering, according to an e-mailed statement from Lockyer’s office. “The retail demand has been pretty hefty, so we’re pleased with the results so far,” Lockyer said in the statement. “We look forward to doing some more retail business tomorrow and completing a deal on Wednesday that provides taxpayers some much-needed savings on our debt payments.”
The general-obligation sale comes as yields on top-rated municipal securities due in 10 years fell to a one-week low, according to a Bloomberg Valuation index. Yields (BVMB30Y) on AAA 30-year bonds approached the lowest level since at least January 2009. Treasury 10-year note yields traded at almost the lowest level in three weeks as the Federal Reserve bought U.S. notes.

China Showdown Over Property Curbs Simmers (Source: Bloomberg)
China’s local municipalities will press on with efforts to ease property curbs that have slowed the land sales they rely on for revenue, even after two cities retreated in the face of opposition from the central government. Wuhu and Foshan, smaller cities that get at least 30 percent of their revenue from selling sites, abandoned attempts to lift some restrictions that have hurt prices and sales. Premier Wen Jiabao has reiterated the government won’t waver from its measures to keep housing affordable. “The local governments are testing the water, but the central government is saying we are not ready yet,” said Andy Rothman, CLSA Asia-Pacific Markets’ Shanghai-based China macroeconomic strategist, who expects officials in Beijing to start allowing their local counterparts to relax housing enforcements in the second quarter.
That is already happening. The southern city of Zhongshan, the hometown of Sun Yat-sen, the founder of modern China, increased a price cap on residential home sales in January, and the western city of Chongqing last month raised the minimum threshold where a property holding tax kicks in.

Japan’s Factory Production Rises More Than Anticipated as Demand Rebounds (Source: Bloomberg)
Japan’s industrial production increased more than forecast, adding to signs that the world’s third-largest economy may return to growth this quarter. Factory output rose 2 percent in January from the previous month, the Trade Ministry said in Tokyo today. The median estimate of 31 economists surveyed by Bloomberg News was for a 1.5 percent gain. Toyota Motor Corp. (7203) and Nissan Motor Co. are recovering from disruptions caused by Thailand’s floods and the earthquake and tsunami that devastated Japan’s northeast last March. Reconstruction work and incentives for purchases of environmentally friendly cars may help to revive an economy that shrank an annualized 2.3 percent in the fourth quarter. “The transport industry has already started making up for a decline in production from the November flooding in Thailand,” Kyohei Morita, chief economist at Barclays Capital in Tokyo, said before the report. “The revival of the eco-car subsidies will likely help domestic production maintain a firm footing.”

Confidence in Europe Rises More Than Forecast on Stability Signs: Economy (Source: Bloomberg)
Economic confidence in the euro area improved more than forecast in February, adding to signs the economy is stabilizing after a fourth-quarter contraction. An index of executive and consumer sentiment in the 17- nation euro area rose for a second month, increasing to 94.4 from 93.4 in January, the European Commission in Brussels said today. Economists had forecast a gain to 94, the median of 31 estimates in a Bloomberg News survey showed. Germany’s economy, Europe’s largest, has helped soften the impact of tougher austerity measures across the region as companies boost output and hiring to meet export demand. German business confidence rose more than economists forecast to a seven-month high in February and investors became more optimistic. European Central Bank President Mario Draghi has said that while some euro-area nations may see a “mild” recession, the overall situation “seems to be stabilizing.”
Today’s report suggests that “the euro zone is past the worst,” said Howard Archer, chief European economist at IHS Global Insight in London. “Even so, sentiment is still at a pretty low level and the euro zone is far from out of the economic woods.”

Papademos Gets Backing for $4.3B of Cuts (Source: Bloomberg)
Greece’s Parliament ratified a 3.2 billion-euro ($4.3 billion) package of spending cuts to the 2012 budget, taking Prime Minister Lucas Papademos one step closer to the country securing a rescue package to avert financial collapse. A total of 202 lawmakers voted in favor of the law and 80 against, Acting Parliament Speaker Grigoris Niotis said in remarks carried live on state-run Vouli TV yesterday after a roll-call vote. The vote is to be followed today by another that legislates permanent changes to pension funds and health-care spending, measures demanded by the European Union and International Monetary Fund in return for the 130 billion-euro lifeline. European governments moved toward a second rescue of Greece on Feb. 21, calculating that the cost of a fresh bailout, which includes a writedown of about 100 billion euros of Greek debt, is a price worth paying to prevent a financial collapse that could shatter the euro area.

Krugman Says Greece Running Out of Alternatives to Quitting Euro Currrency (Source: Bloomberg)
Nobel-prize winning economist Paul Krugman said Greece is “close” to having to leave the 17- member currency region 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 euro region, Krugman, a professor at Princeton University, said in Lisbon late yesterday. 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 yesterday, part of a plan agreed earlier this month to stem the 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, saying the region first needs to boost its own resources. European leaders are scheduled to meet in Brussels March 1-2.
Greece’s credit ratings were cut to “Selective Default” by Standard & Poor’s yesterday. S&P dropped Greece’s rating from CC, two levels above default, after the government added clauses to its debt designed to mop up investors unwilling to take part in a bond exchange, according to the statement.

20120229 0951 Global Commodities Related News.

La Nina Weakens; Indicators Near Neutral (Source: CME)
Indicators of a La Nina have continued to steadily shift toward neutral, suggesting the climate event in the Pacific Ocean is weakening, the government's Bureau of Meteorology said. Sea surface temperatures in the tropical Pacific Ocean have continued to warm from lower-than-average temperatures, and the bureau's Southern Oscillation Index has fallen to a neutral value, the bureau reported in a weekly tropical climate note. The SOI recorded a neutral value of +0.7 in the 30 days ended Feb. 26, falling from +8.0 in the 30 days ended Feb. 18. Sustained positive values above +8 may indicate a La Nina event.
"Although both oceanic and atmospheric indices show signs of weakening, La Nina is still having a strong influence across the Pacific," the bureau said. La Nina events usually bring above-normal rainfall and below-normal daytime temperatures from winter through summer across eastern and northern Australia as well as an increased risk of tropical cyclones in northern Australia during the cyclone season, which runs from November through April. Cloudiness near the international date line continues below average, and easterly anomalies in the trade winds continue over the western and central Pacific, the bureau said. Rainfall across Australia over this last week followed the usual La Nina pattern, with above average rainfall across much of the northern and eastern parts of the country, it said.
The bureau also warned the risk for tropical cyclone formation and above average rainfall will increase in the second week of March.

Corn Shipments From India Seen Missing Forecast on Pests, Rebounding Rupee (Source: Bloomberg)
India, Asia’s biggest corn exporter, may ship less grain than predicted this year after Vietnam rejected some cargoes because of pests and the rebounding rupee boosted prices, according to a traders’ group. Sales in the year that began on Oct. 1 will trail the 3 million metric tons estimated in November, said Pravin Dongre, president of the India Pulses & Grains Association. The country exported 2.5 million tons in 2010-2011, he said in a phone interview in Mumbai. Futures lost 11 percent in the past year in Chicago as record global corn production cut demand for the livestock-feed ingredient from the U.S., the largest producer and exporter. Vietnam may boost imports from South America and Ukraine after turning back a couple of Indian cargoes, citing the presence of live khapra beetles, an insect that destroys grain, Dongre said. “Earlier if there were 10 buyers, then 10 shippers were willing to export to Vietnam,” said Dongre. “With this issue, shippers are very hesitant.”

Corn (Source: CME)
US corn futures rally amid near-term supply concerns and broad strength in grains. Front-month corn has now fully rebounded from losses suffered after the government's bearish Jan 12 grain report, climbing to a seven-week high. Although traders wary of the potential for a huge 2012 crop, tight existing supplies and optimism about export demand are fueling gains. Meanwhile soybeans, which hit a 5-month high, and wheat, which rallied on short-covering, add to the strength. CBOT March corn ends up 9c to $6.53 1/2 a bushel, Dec corn up 6 1/2c to $5.63 1/2.

Wheat (Source: CME)
US wheat futures surge, ending at 3-week highs as a broad rally in grains prompts short-covering. Traders attribute the extent of wheat's gains to the large net short position held by speculators. Gains in soybeans, driven by exports and South American drought, as well as in corn, are prompting traders to cover their short positions in wheat, traders say. They say wheat's fundamentals remain questionable, but with front-month CBOT prices on the verge of topping their 200-day moving average, more upside is possible. CBOT March wheat ends up 16 1/2c to $6.62 1/4 a bushel, March KCBT wheat up 14 1/2c to $6.99 1/2, March MGEX wheat up 11 1/2c to $8.02 1/4.

Rice (Source: CME)
US rice futures end slightly lower in tight, range-bound trade. Rice declines to join in a broader rally in grains and soybeans, as poor export demand for rice continues to hang over prices. Worries about U.S. acreage limiting the downside. CBOT March rice ends down 3c to $14.17 per hundredweight.

Soy gains after touching 5-month high; wheat, corn dip
NEW DELHI, Feb 28 (Reuters) - Chicago soybeans rose extending gains after a fresh five-month high struck in the last session on buoyant demand from China, the world's top importer of the commodity.
Corn and wheat dropped after settling higher on Monday, partly influenced by a fall in crude oil prices that took Brent below $124.

La Nina continues to wane-Australia weather bureau
SYDNEY, Feb 28 (Reuters) - La Nina, a weather phenomenon linked to heavy rains in the Asia-Pacific region and South America and drought in Africa, continues to decline, but still hasn't lost its punch, Australia's weather bureau said on Tuesday.
"While La NiƱa is clearly on the wane, waters around Australia remain warmer than normal, maintaining the potential for increased rainfall over the continent," the Australian Bureau of Meteorology said.

US farmers get record $10 bln from crop insurance
WASHINGTON, Feb 27 (Reuters) - U.S. farmers collected a record $10 billion in crop insurance indemnities for their 2011 crops, said a trade group on Monday, calling insurance a sound safety net as Congress prepares to overhaul crop subsidies.
Five percent of claims on 2011 crops are outstanding, so the pay-out is likely to climb above the current $10.08 billion, said National Crop Insurance Services (NCIS). The payment record was $8.67 billion in 2008.

Canada Wheat Board seen gaining grain handling deals
WINNIPEG, Manitoba, Feb 27 (Reuters) - Canadian agriculture minister Gerry Ritz said on Monday he is confident the Canadian Wheat Board will strike agreements with grain handlers to allow it to start buying farmers' 2012 crops for future delivery.
A new federal law will strip the board's marketing monopoly for Western Canadian wheat and barley as of Aug. 1. The Wheat Board plans to continue buying and selling upcoming crops, even though farmers will be no longer be required to market their grain through the CWB.

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.

Ukraine marine grain exports at 1.24 mln T Feb 1-24
KIEV, Feb 27 (Reuters) - Ukraine exported about 1.24 million tonnes of grain, mostly corn, in the first 24 days of February, Kiev-based consultancy ProAgro said on Monday.
It said Ukraine exported about 951,000 tonnes of corn and 266,000 tonnes of wheat. No figures for the same period of 2011 were immediately available.

Iran May Buy Wheat From India (Source: CME)
With western sanctions hitting supply from the U.S and Europe, Iran may buy up to 3 million metric tons of wheat from India through private deals, industry officials said. Once the two countries are able to find a way to get around restrictions on payment due to the sanctions, this deal could potentially open doors for the export of other food items to Iran, they said. "The payments by Iran could be in rupees...It is being worked out," one of the officials who didn't wish to be named, told Dow Jones Newswires. The value of the deals being discussed is estimated at $750 million to $900 million. One option being looked at is Iran using rupee payments received against oil exports to India to buy wheat and other food products from the latter. A delegation that includes representatives of Iran's central bank is expected in New Delhi this week to discuss the deals and the payment mechanism, a second official said. Iran has recently turned to Australia, Canada and Russia to buy wheat and corn to replenish stocks.
The success of any deal will hinge on the two establishing a payment mechanism as shipments of premium basmati rice and tea have been disrupted after sanctions were imposed. Another issue that needs to be sorted out is the port of delivery. "I think private traders in India would be willing to supply wheat to Iran, so long as they take delivery at Indian ports," said M.K. Dattaraj, former president of the Roller Flour Millers Federation of India. "Otherwise, logistics can get complicated." Besides wheat, Iran is also keen to buy edible oils, corn and sugar, an Indian official said. Wheat from India is likely to be shipped at a price of $300/ton free on board. Such an order could help Indian traders at a time when the country has plentiful supply after two bumper crops. Domestic exporters have also been struggling as high domestic prices make exports difficult. India has shipped no more than 550,000 tons wheat after an export ban was lifted in September.

Sugar May Tumble Below 20 Cents on Surplus, F.O. Licht Says (Source: Bloomberg)
Raw sugar may drop to less than 20 cents a pound by year-end as global supply exceeds demand for a second season in 2012-2013, according to F.O. Licht GmbH, which said that lower prices may spur restocking by importers. The commodity dropped for the first time in nine days in New York. The surplus may counter support that sugar gets from higher oil prices, according to Christoph Berg, managing director at the Ratzeburg, Germany-based researcher who’s covered the market since 1994. Sugar, which hasn’t traded below 20 cents since September 2010, snapped the best run since November of that year. Lower prices would cut expenses for users such as soft- drinks maker Coca-Cola Co. (KO), which has also predicted global surpluses, while helping to extend a decline in world food costs. Sugar may trade between 20 cents and 25 cents on rising supply in the Northern Hemisphere and prospects for a good 2012-2013 crop in Brazil, HSBC Holdings Plc said in a report on Feb. 17.
“We currently see a fair price, possibly some weakness in the second half,” Berg said in a phone interview before an industry conference that began in Bangkok today. “We’re talking more about sugar prices falling to 20 cents, possibly below.”

Global sugar surplus at 9 mln tonnes in 2011/12-Olam
BANGKOK, Feb 28 (Reuters) - The global sugar surplus is forecast to be 9 million tonnes in the current 2011/12 crop and could drop to 5-7 million tonnes in 2012/13, Olam Europe senior analyst John Stansfield said on Tuesday.
The forecast for 2011/12 was unchanged from the one given by Olam in a Dubai meeting on Feb. 7.

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.

Surging sugar output, demand outlook in focus at Bangkok meet
BANGKOK/SINGAPORE, Feb 27 (Reuters) - An expected surge in global sugar production, a possible correction in prices and Brazil's move to revive the country's ethanol sector will take centrestage at an industry conference in Thailand this week.  
The Bangkok conference organised by analyst F.O. Licht will look at demand trends at a time when rising output from producers in Asia and Europe could lead to a global surplus of more than 5 million tonnes in the current crop year.

No cocoa damaged in ADM's Pennsylvania plant fire
NEW YORK, Feb 27 (Reuters) - A weekend fire in an Archer Daniels Midland Company  cocoa processing plant in Pennsylvania did not cause any damage to cocoa supplies, a company spokeswoman said on Monday.
"There was no tangible property damage or impact on production from the incident," said Jessie McKinney, spokeswoman for ADM told Reuters in an email.

Ethiopia exports up by 21 pct despite coffee slump
ADDIS ABABA, Feb 27 (Reuters) - A surge in gold, oil seeds and livestock exports lifted Ethiopia's total export revenue by 21 percent in the six months to December versus the year-ago period, offsetting a slump in coffee earnings, trade data showed.
Prime Minister Meles Zenawi told parliament last month he expected the country's economy to grow by more than 11 percent this fiscal year driven by a boost in agriculture production.

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.

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.

Crude Trades Near One-Week Low on Demand Concern; Heads for Monthly Gain (Source: Bloomberg)
Oil traded near the lowest in almost a week in New York as investors bet that rising crude stockpiles in the U.S. signal faltering demand in the world’s biggest consumer of the commodity. Futures were little changed after tumbling the most in five weeks yesterday, paring the first monthly gain in three. Oil inventories climbed 521,000 barrels last week, the industry- funded American Petroleum Institute said after the settlement. A government report today may show supplies gained 1.1 million barrels, according to a Bloomberg News survey. U.S. orders for durable goods dropped in January by the most in three years, figures from the Commerce Department showed. Oil for April delivery was at $106.57 a barrel, up 2 cents in electronic trading on the New York Mercantile Exchange at 10:41 a.m. Sydney time. The contract yesterday slipped $2.01 to $106.55, the lowest close since Feb. 22 and the biggest drop since Jan. 20. Prices are 8.2 percent higher this month and up 9.9 percent in the past year.
Brent oil for April settlement dropped $2.62, or 2.1 percent, to $121.55 a barrel on the London-based ICE Futures Europe exchange yesterday. The European benchmark contract’s premium to New York-traded West Texas Intermediate was at $15. It reached a record of $27.88 on Oct. 14.

Copper Futures Advance to Two-Week High on Greek Aid, Confidence Gains (Source: Bloomberg)
Copper rose to a two-week high as German legislators approved a second bailout for Greece, and U.S. and European gauges of economic confidence rose more than expected, pointing to improving growth and metals demand. German Chancellor Angela Merkel won a parliamentary vote on Greek aid after warning lawmakers that pushing Greece out of the euro would risk “incalculable” damage. Confidence among U.S. consumers jumped in February to the highest level in a year, the Conference Board said today. The European Commission in Brussels said an index of executive and consumer sentiment climbed for a second month. “Europe is going to do what they can to protect the euro, and there are signs that Greece is starting to live up to their agreements in holding back on spending,” Harry Denny, a broker at Hoboken, New Jersey-based PVM Futures Inc., said in a telephone interview. “The U.S. economy has shown tremendous stability, and that’s adding momentum” in copper-price gains, he said.

Gold Leads Precious Metals Rally on Investor Demand for Dollar Alternative (Source: Bloomberg)
Gold advanced to a three-month high and silver posted its biggest gain in eight weeks as investors bought precious metals as an alternative to a weakening dollar. Platinum and palladium also rose. The dollar fell for the third time in four sessions against a basket of currencies and the euro rose to a three-month high as the European Central Bank prepares to allot a second round of three-year loans to help the region’s banks tomorrow. The MSCI All-Country World Index of stocks climbed as a gauge of U.S. consumer confidence jumped to a one-year high. “The euro is stronger against the dollar and that’s one of the major supportive factors” for gold, Peter Fertig, owner of Quantitative Commodity Research Ltd. in Hainburg, Germany, said by telephone. Higher equities are “also supportive” for commodities, including gold, he said.
Gold futures for April delivery advanced 0.8 percent to settle at $1,788.40 an ounce at 1:30 p.m. on the Comex in New York, after climbing to $1,792.70, the highest level for a most- active contract since Nov. 14.

20120229 0950 Soy Oil & Palm Oil Related News.

ITS CPO export down 10.5% to 1,177,262 tonnes for the period of 1~29 Feb 2012.
SGS CPO export down 9.5% to 1,170,698 tonnes for the period of 1~29 Feb 2012.

Soybeans (Source: CME)
US soybean futures ended higher, continuing a trend of setting new near-term highs on declining South American crop forecasts and strong export demand. Soybeans rallied to fresh five-month highs, buoyed by trader's thoughts that a smaller Brazilian crop will spur additional export demand for US soybeans, analysts say. Backlog of supplies at Brazilian ports is encouraging importers, particularly China, to book US supplies for near-term needs. Additional support spurred by need to push soy prices in an effort to entice farmers to not plant more corn at the expense of soybeans, analysts add. CBOT May soybeans ended up 10c at $13.12 1/2/bushel.

Soybean Meal/Oil (Source: CME)
Soy product futures ended mixed, with soymeal rising to 5-month highs in unison with soybeans. Soymeal is following soy on the threat of smaller South American crops spurring fresh demand, analysts say. Soyoil stumbled, succumbing to weakness in crude oil and end-of-month profit-taking on oil/meal spreads. CBOT May soymeal ended up $5.70 to $349.30/short ton, while soyoil dropped 0.06c at 54.80 cents/pound.

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 8.7 percent since Dec. 30 will gain another 6.7 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.”

Soybeans Climb to Highest in Five Months as Rains Come Too Late for Brazil (Source: Bloomberg)
Soybeans advanced to the highest level in more than five months after rainfall in Brazil, poised to be the largest shipper, came too late to aid parched crops and global stockpiles may shrink the most in 16 years. Soybean and corn-growing areas in Brazil will get rain this week, slowing the harvest, forecaster Somar Meteorologia said yesterday. Hot, dry weather damaged Brazil’s crops during the growing season, Telvent DTN Inc. said in a report yesterday. Rabobank International said on Feb. 20 prices will average $12.81 a bushel in the first quarter. So far, the average is about $12.30 a bushel. “South America’s production shortfall and strong U.S. export demand” are driving prices higher, said Erin FitzPatrick, a London-based analyst at Rabobank. The bank’s price forecasts “are a bit higher on the outlook for China’s imports. That latest forecast implied higher prices.”
Soybean futures for May delivery gained 0.3 percent to $13.06 a bushel by 10:16 a.m. London time on the Chicago Board of Trade, after earlier touching $13.1175 a bushel, the highest price since Sept. 22. A close higher would be the seventh straight gain, the longest winning streak this year.

Mewah Shifts Focus To Indonesia (Source: CME)
Mewah International, one of the world's largest palm oil refiners by capacity, said that it was putting its upcoming palm oil refinery project in Sabah Malaysia on hold while shifting focus to Indonesia. "We feel it is more important to have Indonesia in our portfolio," Rajesh Chopra, chief financial officer, said at a post-earnings briefing. Earlier Tuesday the company said that its fourth-quarter net profit fell 74% from a year earlier, to $10.7 million. The performance reflects weakening global economic growth, tightening financial markets and uncertainty in the palm oil industry due to changes in export duties by the Indonesian government, Chopra said. Indonesia in August cut the maximum export duty on refined, bleached and deodorized palm products to 13% from 25%, and the top rate for CPO exports to 22.5% from 25%. The moves helped boost growth in Indonesia's palm oil refining industry, by encouraging producers to sell to Indonesian refiners instead of exporting.
To benefit from the new tax structure, Mewah plans to invest $145 million in refinery, packing and logistics facilities in East Java Indonesia. The project is expected to be completed by end-2013, Chopra said. Meanwhile, Mewah expects growth in the first quarter to remain slow due to seasonal factors, Chief Executive Michelle Cheo said at the same briefing. But sales will likely pick up in the second quarter of this year due to Ramadan-related festival buying, she said. The company is optimistic about the long term industry outlook for the palm oil industry, she said. "We expect midstream and downstream players in palm oil industry to benefit from slowing production growth for palm oil, expected drop in soybean production in 2012, rising demand for cooking oils particularly from India, China and improvement in end demand as economic conditions improve," she said.

Argentina JV Aims To Break Soy Grip (Source: CME)
Argentine biotech firm Bioceres is teaming up with U.S.-based Arcadia Biosciences to bring a host of new transgenic soybean seeds to a market dominated by global biotech giants such as Monsanto Co.. The country is a potentially lucrative market for genetically modified seed makers. The South American farming powerhouse is the world's third-largest soybean exporter and ranks No.2 in corn exports. The 50-50 venture between Bioceres and Arcadia, dubbed Verdeca, hopes to have its soybean seeds on sale in 2015 or 2016, Arcadia Biosciences CEO Eric Rey said in an interview. The two companies have already invested about $120 million to develop seeds that will combine transgenic traits for resistance to the herbicide glyphosate with drought tolerance and increased nitrogen and water use efficiency. Another $20 million to $40 million will be spent over the next four or five years to gain regulatory approval for the seeds in key markets, including other South American nations, the U.S., China and India, Rey said.
The U.S., Brazil and Argentina dominate global soybean sales, while China is the world's top importer. Demand for soybeans has surged in recent years for use as animal feed to sate the world's growing hunger for meat. Argentina already ranks No.3 in the world behind Brazil in the area planted with genetically modified seeds, according to the International Service for the Acquisition of Agri-Biotech Applications. In its annual report, the trade group, whose backers include Monsanto and the U.S. Department of Agriculture, said that Argentina planted about 23.7 million hectares with genetically modified soybean, corn and cotton in 2011. Bioceres is owned by over 230 of Argentina's biggest farmers, who together plant about 2.5 million hectares of soybeans each year in South America. The firm has developed its seed technology with the federal government's science and technology promotion institute, Conicet.
Verdeca's strategy involves building on a platform of established genetic traits and to take advantage of the expiration of Monsanto's U.S. patent for glyphosate-resistant soybeans in 2014, said Bioceres CEO Federico Trucco. Privately held Arcadia has so far focused on developing new agricultural biotechnology and licensing it to other companies who go through the costly process of obtaining regulatory approval. But as a partner in Verdeca, Arcadia wants to take it's new seeds through the regulatory approval process, after which "value goes up dramatically," Rey said. Verdeca plans to sell its products through conventional seed channels under licensing agreements with major distribution companies, he said. But local farmers are notorious for using pirated transgenic seeds and ducking attempts by companies to collect royalties.
Monsanto failed to obtain a local patent for the genetically modified soybean seeds it introduced into Argentina 15 years ago and its efforts to collect royalties have been foiled by local regulations. Last May, Monsanto said that it hoped to reach an agreement with growers before introducing a new, improved strain of soybean seeds. Monsanto has a patent for the new seeds in Argentina, but under local law farmers aren't required to pay royalties on the seeds they hold back for the next planting season. A Monsanto spokeswoman said the company didn't have an immediate comment. Verdeca is aware of the risk of introducing new soy seeds into Argentina, but Rey is confident that the company's ownership structure will allow it to generate sales as many of its potential customers are also shareholders. "We have a built-in customer base," he said. Grupo Los Grobo, one of the largest soybean producers in the world with fields in Argentina, Brazil, Paraguay and Uruguay, owns 3% of Bioceres.
The small number of biotechnology companies in the transgenic seed market is a problem for growers and more competition is needed, Los Grobo President and Bioceres board member Gustavo Grobocopatel said in an interview. "There should be 20 Monsantos and 10 Bioceres," he said.

Palm oil gains on prospect of higher demand
SINGAPORE, Feb 28 (Reuters) - Malaysian crude palm oil futures inched up buoyed by improving demand prospects, but gains were limited as investors worried about the risks to global growth from high oil prices.  
Malaysian export numbers on Monday pointed to strengthening demand, helping to lift palm oil prices which have gained 7 percent so far this year.    

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.

W.Canada canola area seen at record 21 mln acres-Louis Dreyfus
Feb 27 (Reuters) - Western Canadian farmers look to plant a record-high 21 million acres of canola, Louis Dreyfus Canada forecast on Monday.
Strong canola prices versus spring wheat values, as well as brisk canola exports and domestic crushing will lead to a bigger canola area, said Tracy Lussier, manager of canola trading for Louis Dreyfus Canada, which operates a canola crushing plant and grain elevators in Western Canada.