Friday, March 2, 2012

20120302 1812 FCPO EOD Daily Chart Study.

FCPO closed : 3259, changed : -26 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 loss with slowing down volume participation. Soy oil price currently trading little weaker after overnight ended little lower while crude oil price recording loss overnight closed higher.
FCPO price slide lower ahead of next Monday Kuala Lumpur palm oil conference after soy oil and crude oil pullback lower having correction.
Technical reading remained 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.

20120302 1730 FKLI EOD Daily Chart Study.

FKLI closed : 1587 changed : +11.5 points, volume : higher.
Bollinger band reading : upside biased with possible pullback correction.
MACD Histrogram : rising, buyer in advantage.
Support : 1580, 1570, 1565, 1550 level.
Resistance : 1590, 1600, 1610, 1620 level.
Comment :
FKLI closed rallied higher with little improved volume transacted doing 3 points premium compare to cash market that also closed higher. Overnight U.S. markets closed little higher and today Asia markets ended in positive zone while European markets swing between gains and losses.
U.S. 4 year low jobless claims and news on European leaders agreed to speed up providing bailout fund to ease debt crisis push global markets higher.
Daily chart analysis switch to suggesting upside biased market development with possible pullback correction. MACD indicator also having positive crossed up.
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.

20120302 1701 Regional Markets EOD Daily Chart Study.

 DJIA chart reading : correction range bound upside biased.
 Hang Seng chart reading : correction range bound upside biased.
KLCI chart reading :  upside biased with possible pullback + MACD cross up.

20120302 1600 Global Market & Commodities Related News.

Shares firm as ECB liquidity boost lifts sentiment
TOKYO, March 2 (Reuters) - Asian shares and the euro inched up after a flood of cheap European Central Bank funds this week eased fears of a meltdown in the euro zone financial sector, overriding some weak data and concerns about surging oil prices.
"Central banks around the world keeping the global financial system awash with funds is prompting investors to keep the recent risk-on momentum," said Tetsuro Ii, the president of Commons Asset Management in Tokyo.

FOREX-Euro suffers post-ECB blues; downside seen
SINGAPORE, March 2 (Reuters) - The euro held steady versus the dollar and edged up against the Australian dollar on Friday but was seen likely to stay on the defensive after this week's massive cash injection by the European Central Bank.
The single currency held steady at $1.3308 , not far from a one-week low near $1.3280 hit the previous day.      

Indonesia refining advantage to dominate palm oil meeting
KUALA LUMPUR, March 2 (Reuters) - Top palm producer Indonesia's growing refining advantage over No. 2 supplier Malaysia will dominate an annual gathering of the world's palm oil business in Kuala Lumpur next week as traders examine shifts in demand.
Planters, refiners and bankers gather for the Bursa Malaysia Palm Oil Conference from Monday to Wednesday as the market for the tropical oil grows this year at the expense of soyoil, with the South American soy crop damaged by drought.

Wheat falls for 2nd day, soy dips after 9-session rally
SINGAPORE, March 2 (Reuters) - U.S. wheat and corn lost more ground as investors booked profit from recent gains, although the fall in wheat is being cushioned by Iran's first purchase of U.S. wheat in three years.  
"Grain markets are overbought and we are seeing a little bit of correction as there is not much fundamental support at the moment," said Lynette Tan, an analyst with Phillip Futures in Singapore.

Rains help Argentina's soy, corn crops recover
BUENOS AIRES, March 1 (Reuters) - A leading Argentine grains exchange held its soy and corn harvest estimates steady on Thursday, saying the rains that soaked fields over the past week have improved the outlook for soybeans.
Buenos Aires Grains Exchange forecast soy production at 46.2 million tonnes and expects a corn harvest of 21.3 million tonnes. Argentina is the world's no. 3 supplier of soybeans and the second-biggest corn supplier after the United States.

Argentine grains ports hit by dock workers' strike
BUENOS AIRES, March 1 (Reuters) - Argentine dock workers went on strike for better conditions on  Thursday, slowing the country's ports just ahead of corn and soybean harvests key to world grains markets and the local economy.
"At this time we are not mooring ships, and this will continue until we reach a deal with the port authorities," Omar Suarez, spokesman for the SOMU harbor workers' union, told Reuters.

Russia 2011/12 sugar export seen at record 250,000 t
MOSCOW, March 1(Reuters) - Russia could export a record 250,000 tonnes of sugar in the 2011/12 season thanks to a record harvest which resulted in a surplus on the domestic market, a leading sugar market analyst said.
The Institute for Agricultural Market Studies estimated 180,000 tonnes had already been exported by the end of February.

ICO cuts forecast for 2011/12 global coffee crop
LONDON, March 1 (Reuters) - The International Coffee Organization on Thursday cut its forecast for the global coffee crop in 2011/12 to 128.5 million 60-kg bags, down from a previous estimate of 130.9 million.
The downward revision partly reflected diminished crop outlooks in Vietnam and India where heavy rains are likely to affect output, the ICO said in a monthly update.

Kenya 2012 sugar production forecast to rise 13 pct
NAIROBI, March 1 (Reuters) - Kenya's 2012 sugar production is forecast to rise 13 percent to a potential record high buoyed by expected good weather and bigger factory crushing capacity, the industry regulator said.
The east African nation of 39 million people has an annual sugar deficit of around 200,000 tonnes, which is usually filled by imports from other producers in the region.

Dryness a mixed blessing for Brazil coffee
BRASILIA, March 1 (Reuters) - Brazil's key coffee zones were much drier than usual in  February, helping stop bacterial halo blight disease in its tracks but causing concern that developing coffee beans may not have enough water to swell out to an optimal size.
The larger arabica coffee crop in the world's top grower will begin to be picked from May, and several weeks earlier in robusta regions. It is expected to turn out a large crop, despite weather problems that blighted it early on.

Brent slips to $126 as Saudi supply fears ease
SINGAPORE, March 2 (Reuters) - Brent crude futures slipped to $126, coming off an 11-month high, as fears of a supply disruption from Saudi Arabia eased and the market focused on lower seasonal demand for oil in the coming months.  
"Oil prices have overshot in the short-term, and with warmer temperatures as we move from winter to spring, oil demand could start to fall, starting in March," said Gordon Kwan, head of energy research at Mirae Asset Management in Hong Kong. "Brent could fall back below $120 if Iran doesn't flare up."        

World can replace oil lost to Iran sanctions -US
WASHINGTON, March 1 (Reuters) - Global oil producers appear to have enough spare capacity to make up for Iranian exports curtailed by tough new sanctions, U.S. Energy Secretary Steven Chu said on Thursday.
Chu said it was important that sanctions be used to crimp Iranian oil sales to ensure Tehran does not develop nuclear weapons, despite the release of an Energy Information Administration report this week that showed

Oil highest since 2008 on Saudi pipeline report
NEW YORK, March 1 (Reuters) - Oil surged nearly 5 percent in heavy trading on Thursday, and to its highest since the record run in 2008, as a late report out of Iran of a pipeline fire in top exporter Saudi Arabia triggered a rush of buying.
Iranian media reported an explosion on an unknown oil pipeline in the oil-rich Eastern Province of Saudi Arabia, although it was not possible to verify the report immediately.

Copper eyeing smallest weekly gain in a month
SINGAPORE, March 2 (Reuters) - Copper steadied  , and is headed for its smallest weekly gain in a month, as concerns about slow demand from top consumer China persisted despite data showing its economy is regaining  momentum.
"Copper is a flat story at the moment. Chinese demand used to be the driver, but now it looks like it's a dragger," said Henry Liu, head of commodity research at Mirae Asset Securities in Hong Kong.

China refined copper importers delay shipments - trade
HONG KONG, March 1 (Reuters) - Chinese refined copper importers have delayed some February-March shipments and diverted some arriving shipments to South Korea due to weak demand in top copper consumer China, raising availability in the global market, traders said on Thursday.
Chinese demand has been a source of concern for the global market in recent weeks as it has failed to pick up after the week-long Lunar New Year holiday in late January, making some analysts question the sustainability of copper prices , which have risen above 10 percent so far this year.

China's iron ore imports seen at 730 mln T in 2012-industry ministry
SHANGHAI, March 1 (Reuters) - China, the world's top iron ore buyer, is expected to see import growth for the steelmaking raw material ease this year on weaker steel demand and slower economic growth, the Ministry of Industry and Information Technology (MIIT) said.
But iron ore imports are expected to hit a fresh record in terms of volume, reaching 730 million tonnes this year, after rising 8.2 percent to 686 million tonnes in 2011, the ministry said in a statement on Wednesday.

China daily crude steel output stays low in mid-February
SHANGHAI, March 1 (Reuters) - China's daily crude steel output stood at 1.699 million tonnes from Feb. 11-20, flat from 1.696 million tonnes during the preceding period, the latest data from the China Iron & Steel Association (CISA) showed.  
Daily production rates in the world's largest steel-producing country have been hovering below 1.7 million tonnes since November, after reaching some 2 million tonnes in June amid a construction boom. CISA revised its figures for early-February from 1.705 million tonnes.

COLUMN-China oil, copper imports decouple from PMIs
--Clyde Russell is a Reuters market analyst. The views expressed are his own.--
SINGAPORE, March 1 (Reuters) - The health of China's giant manufacturing sector is often cited when talking about the nation's commodity demand, but it appears that imports of crude oil and copper have decoupled from the industrial data.
The release of the two monthly Purchasing Managers' Indexes, one by the government's statistics office and the other by HSBC, is invariably accompanied by lots of talk on whether China's economy is cooling too fast or at just the right pace.

Two Japan aluminium buyers agree $115 Q2 premium-sources
TOKYO, March 1 (Reuters) - Two aluminium buyers in Japan have agreed second-quarter premiums to be paid to producers of $115 per tonne, slightly higher than for the current quarter, while most other Japanese firms are still negotiating for lower premiums, two sources directly involved in the matter said.
The agreed figure is sharply below Rio Tinto Alcan's  initial request for $132, and suggests there is not yet a recovery in Japanese demand that Australian and U.S. aluminium producers have been hoping for to drive a rise in the premium.  

China refined copper importers delay shipments - trade
HONG KONG, March 1 (Reuters) - Chinese refined copper importers have delayed some February-March shipments and diverted some arriving shipments to South Korea due to weak demand in top copper consumer China, raising availability in the global market, traders said on Thursday.
Chinese demand has been a source of concern for the global market in recent weeks as it has failed to pick up after the week-long Lunar New Year holiday in late January, making some analysts question the sustainability of copper prices , which have risen above 10 percent so far this year.

China's iron ore imports seen at 730 mln T in 2012-industry ministry
SHANGHAI, March 1 (Reuters) - China, the world's top iron ore buyer, is expected to see import growth for the steelmaking raw material ease this year on weaker steel demand and slower economic growth, the Ministry of Industry and Information Technology (MIIT) said.
But iron ore imports are expected to hit a fresh record in terms of volume, reaching 730 million tonnes this year, after rising 8.2 percent to 686 million tonnes in 2011, the ministry said in a statement on Wednesday.

Gold inches up as buyers trickle back after selloff
SINGAPORE, March 2 (Reuters) - Gold edged higher as buyers slowly returned to the market, lured by Wednesday's plunge of 5 percent, although bullion is still looking at its worst week since December.
"The broader macro backdrop remains gold-favourable, given the negative interest rate environment, longer-term inflationary concerns and lingering sovereign debt uncertainties," Barclays Capital said in a research note.

METALS-Copper eyeing smallest weekly gain in a month
SINGAPORE, March 2 (Reuters) - Copper steadied on Friday, and is headed for its smallest weekly gain in a month, as concerns about slow demand from top consumer China persisted despite data showing its economy is regaining  momentum.
The industrial metal has gained nearly 14 percent so far this year benefitting, like other risk assets, from increased liquidity across markets as countries ease credit conditions to spur economic growth.

PRECIOUS-Gold inches up as buyers trickle back after selloff
SINGAPORE, March 2 (Reuters) - Gold edged higher on Friday as buyers slowly returned to the market, lured by Wednesday's plunge of 5 percent, although bullion is still looking at its worst week since December.
U.S. Federal Reserve Chairman Ben Bernanke's lack of a reference to further quantitative easing at congressional testimony on Wednesday sparked a heavy sell-off in bullion, sending the metal to a one-month low short of $1,700.

20120302 1135 Global Market & Commodities Related News.

COMMODITIES-Gold bounces up, oil climbs to 10-month high
 NEW YORK, March 1 (Reuters) - Gold rebounded above $1,700 an ounce on Thursday, as buyers emerged after the previous session's 5 percent slump, while oil hit a 10-month high on fears of an Iran-related conflict, and renewed risk appetite lifted copper.
"The fact that it failed to break above a high near $1,800 signified a formidable level of resistance, and more importantly shows the bulls are just not ready to take the market back to new high territory, said Adam Sarhan, CEO of Sarhan Capital.

GLOBAL MARKETS-Shares firm after flood of EU liquidity shores up sentiment
TOKYO, March 2 (Reuters) - Asian shares and the euro inched up on Friday, after a flood of cheap European Central Bank funds this week eased debt worries, allowing markets to overcome some weak data and concerns over surging oil prices.
"While the measures will ultimately prove dilutive to the euro, they will continue to spur the flight to riskier assets," said Christopher Vecchio, currency analyst at DailyFX.

World can replace oil lost to Iran sanctions -US
WASHINGTON, March 1 (Reuters) - Global oil producers appear to have enough spare capacity to make up for Iranian exports curtailed by tough new sanctions, U.S. Energy Secretary Steven Chu said on Thursday.
Chu said it was important that sanctions be used to crimp Iranian oil sales to ensure Tehran does not develop nuclear weapons, despite the release of an Energy Information Administration report this week that showed supplies are tight.

Iran media report of Saudi pipeline fire drives oil surge
March 1 (Reuters) - An Iranian media report of an explosion on an unknown Saudi oil pipeline helped fuel a surge of more than $5 a barrel in oil futures on Thursday, with Brent crude hitting its highest since 2008.
"An explosion has hit oil pipelines in the flashpoint Saudi Arabian city of Awamiyah in the kingdom's oil-rich Eastern Province," PressTV said on its website without providing any further information or sourcing. The headline appeared to have been posted at 2:19 EST (1919 GMT).

US will not revoke LNG exports to control prices-DOE
WASHINGTON, March 1 (Reuters) - The U.S. Energy Department will not attempt to control natural gas prices by revoking approvals granted for gas export terminals, a department official said, as lawmakers and green groups stepped up their attacks on attempts to send U.S. gas abroad.
The department has argued that federal law gives it the authority to revisit liquefied natural gas export applications it has approved, but Deputy Assistant Secretary Christopher Smith said the department would be hesitant to use this power.

France seeks more emergency stocks of oil products
PARIS, March 1 (Reuters) - France's emergency oil stocks agency aims to buy more products on the market by July 1, after purchasing 350,000 cubic metres of diesel in February, to conform with an EU directive requiring members to increase inventories, the head of the agency said.
Jean-Marc Tenneson, who heads the CPSSP agency, said he had calculated in December that France needed to raise its stocks by 600,000 tonnes by July 2012 but he now thought the figure would be lower as consumption has dropped.

Dubai to decide on energy investments by end-2012 -official
DUBAI, March 1 (Reuters) - Dubai is likely to decide on its multi-billion dollar energy investment strategy, including possible investments abroad, by the end of 2012, a senior official at the Gulf emirate's supreme energy council said on Thursday.
Dubai, one of seven members of the United Arab Emirates federation, lacks the large hydrocarbon resources of nearby Abu Dhabi, and has to import gas to satisfy growing energy consumption.

China oil, copper imports decouple from PMIs
--Clyde Russell is a Reuters market analyst. The views expressed are his own.--
SINGAPORE, March 1 (Reuters) - The health of China's giant manufacturing sector is often cited when talking about the nation's commodity demand, but it appears that imports of crude oil and copper have decoupled from the industrial data.
The release of the two monthly Purchasing Managers' Indexes, one by the government's statistics office and the other by HSBC, is invariably accompanied by lots of talk on whether China's economy is cooling too fast or at just the right pace.

Oil highest since 2008 on Saudi pipeline report
NEW YORK, March 1 (Reuters) - Oil surged nearly 5 percent in heavy trading on Thursday, and to its highest since the record run in 2008, as a late report out of Iran of a pipeline fire in top exporter Saudi Arabia triggered a rush of buying.
"The sharp move up on the pipeline story points to the market nervousness on anything related to supply problems," said Gene McGillian, analyst for Tradition Energy in Stamford, Connecticut.  

Natural gas ends down near 6 pct after light stock draw
NEW YORK, March 1 (Reuters) - Front-month U.S. natural gas futures ended nearly 6 percent lower on Thursday after a government report showed a weekly inventory draw below market expectations.  
"Another bearish inventory report hit the market today.  With 19 days left to what may go down as one of the warmest U.S. winters in history, the surplus of natgas in inventory is continuing to grow," Energy Management Institute's Dominick Chirichella said in a report.

Euro Coal-Prices drop $1/T for 3rd day on poor demand
LONDON, March 1 (Reuters) - Prompt physical coal prices fell by $1.00 for the third consecutive day on oversupply and a lack of buying interest in Europe.
"DES is down by another dollar, there is some utility buying because these prices are attractive but it's fairly limited," one utility source said.

20120302 0940 Global Economic Related News.

China’s manufacturing PMI rose to 51 in Feb (50.5 in Jan), in line with the consensus estimate of 50.9. (Bloomberg)

The HSBC manufacturing PMI for China rose to 49.6 in Feb (48.8 in Jan). (Bloomberg)

Indonesia’s exports rose 6.1% yoy in Jan (1.5% in Dec), lower than the 15.2% expected by economists. Imports rose 16% yoy in Jan (25.3% in Dec), compared with market expectations of a 28.8% increase. The trade balance for Jan widened to US$0.923bn from US$0.602bn in Dec. (Bloomberg)

Indonesia’s government will propose a revised inflation target for 2012 of 6-7% from 5.3% in the 2012 budget. It will also propose to raise the crude price assumption to US$105/bbl from the current level of US$90/bbl. (Bloomberg)

Thailand’s CPI rose 3.35% yoy in Feb (3.38% in Jan), versus consensus estimates of a 3.5% increase. Core CPI stood at 2.72% yoy in Feb (2.75% in Jan). (Bloomberg)

The Philippine central bank lowered the overnight borrowing rate by 25 bp to 4%. (Bloomberg)

Vehicle sales in Japan rose 31.9% yoy in Feb (40.7% in Jan), partly due to higher sales in tsunami-hit areas. (Reuters)

South Korea’s trade balance revisited positive territory in Feb with a US$2.2bn surplus (a revised US$2.03bn deficit in Jan) on the back of a sharp rebound in exports. (AFP)


Indonesia: Inflation slows before planned fuel-price increase
Indonesia’s inflation slowed for a sixth straight month in February, supporting the central bank’s decision to ease monetary policy even as a government plan to raise fuel prices threatens to revive cost pressures. Consumer prices rose 3.56% last month from a year earlier, the Central Bureau of Statistics said yesterday. Bank Indonesia, which cut interest rates in its last meeting, said today it will respond to a surge in costs if needed, even as the inflation rate has fallen faster than expected. President Susilo Bambang Yudhoyono’s administration has said it is proposing to raise prices of subsidized fuel. (Bloomberg)

Philippines: Cuts interest rate a second time to boost growth
The Philippines cut interest rates for a second straight meeting, joining neighbors Thailand and Indonesia in reducing borrowing costs to shore up growth as the region’s economies strive to withstand Europe’s debt crisis. Bangko Sentral ng Pilipinas lowered the rate it pays lenders for overnight deposits by a quarter of a percentage point to 4%, according to a statement yesterday. Lower borrowing costs may aid Philippine President Benigno Aquino’s efforts to lift growth as he increases government spending to a record and seeks USD16bn of investments in mass rail, airports, and schools. (Bloomberg)

Asia: China, India manufacturing gains show momentum in Asia
China’s manufacturing expanded at a faster pace in February and a gauge for India showed sustained growth, indicating that Asian economies are maintaining momentum even as Europe’s debt crisis caps exports. In China, the purchasing managers’ index rose for a third month to 51.0 from 50.5 in January, the statistics bureau and logistics federation said in a statement yesterday. In India, a PMI released by HSBC Holdings Plc and Markit Economics was close to an eight-month high. Yesterday’s data, along with a surprise gain in Japanese companies’ capital spending and South Korea’s biggest increase in exports in six months, add to signs that global growth prospects are improving as the US recovery strengthens and Europe works to contain its debt crisis. (Bloomberg)

Greece: Approves pension, health cuts in race for second bailout
Greece’s parliament approved cuts in pensions and health care a day after ratifying a EUR3.2bn (USD4.3bn) package of spending reductions to move closer to a rescue package to avert financial collapse. Lawmakers voted 213-58 in favor of the law, Acting Parliament Speaker Grigoris Niotis said early yesterday in remarks on state-run Vouli TV. Approval in parliament allows Prime Minister Lucas Papademos to meet with euro-area partners this week having met most of the conditions demanded by the European Union and International Monetary Fund for Greece to get a lifeline of EUR130bn. Finance ministers from the region will discuss the second Greek rescue program in Brussels yesterday. (Bloomberg)

EU: Euro ministers give go-ahead to raise money for Greek swap
Euro-area finance ministers authorized the region’s bailout fund to raise money for Greece’s bond exchange, the first step in releasing funds from a EUR130bn (USD173bn) rescue package. Greece has passed “all required legislation” and the ministers “note with satisfaction” the progress achieved, said Luxembourg Prime Minister Jean-Claude Juncker in a statement after chairing a meeting of the finance chiefs in Brussels yesterday. As a result, they gave the go-ahead to the European Financial Stability Facility to issue bonds to finance their role in the debt swap. (Bloomberg)

US: Initial jobless claims are the lowest since March ’08
The number of Americans filing first-time claims for jobless benefits fell to a level matching a four-year low, more evidence the labor market is healing. Applications for unemployment insurance decreased 2,000 in the week ended 25 Feb to 351,000, Labor Department figures showed yesterday. The number of people on unemployment benefit rolls fell, while those getting extended payments also declined. Firing is on a downward trend as employers gain confidence in the outlook for economic growth..(Bloomberg)

US: Consumer comfort last week holds close to four-year high
Consumer confidence in the US held close to an almost four-year high last week as pessimism about the performance of the economy eased. The Bloomberg Consumer Comfort Index was minus 38.8 in the period ended 26 Feb after reaching minus 38.4, the highest level since April 2008, in the previous period. It marked the third straight week above minus 40, which is the level associated with recessions and their aftermath. The margin of error for the headline reading is 3 percentage points. For the fourth consecutive week, at least half the respondents viewed their personal finances as positive, a run that has been matched once since 2008. While job growth and higher stock values are underpinning sentiment, higher fuel costs pose a threat to further gains in confidence and may discourage households from spending more. (Bloomberg)

US: Manufacturing unexpectedly slows as orders cool
Manufacturing in the US grew less than forecast in February as orders eased, slowing the industry that has powered the two-year expansion. The Institute for Supply Management’s factory index fell to 52.4 from 54.1 in January, the Tempe, Arizona-based group said yesterday. Readings above 50 signal growth. Higher fuel prices may be discouraging Americans from spending more on other goods and services even as improvement in the labor market spurs wage gains. At the same time, faster auto sales and increased exports are helping to underpin manufacturing, which accounts for about 12% of the world’s largest economy. (Bloomberg)


US Federal Reserve Chairman Ben S. Bernanke defended the central bank’s expansive monetary policy, telling a Senate hearing that it helped create “about 2.5m jobs” since Nov 2010 and “big gains in stock prices, improvement in credit markets.” (Bloomberg)

US construction spending fell in Jan by 0.1% mom to an annualised US$827bn (a revised 1.4% gain in Dec), the first drop since Jul 2011 and confounding analysts’ expectations for a 1% increase. (Reuters)

US total vehicle sales stood at 15.1m in Feb (14.2m in Jan), exceeding the consensus of 14.0m. (Bloomberg)

20120302 0939 Malaysia Corporate Related News.

CIMB inks MoU for proposed purchase of RBS’ assets in Asia-Pac
CIMB Group is moving closer to the proposed acquisition of certain assets of The Royal Bank of Scotland in Asia Pacific. The Group said it had signed an MoU for the proposed acquisition of certain of cash equities, equity capital markets and corporate finance businesses. (Financial Daily)

MAS eyes RM6bn capital expenditure
Malaysia Airlines (MAS) is staring at a capex of RM6bn this year and RM3.5bn for 2013 because of the aircraft deliveries that have been lined up for this year and next. This year alone, it is going to take delivery of 23 aircraft - five 555-seater A380 which it will deploy for the Kangaroo route (Sydney-KL-London-KL-Sydney); 13 B737-800s and five A330-300s. MAS plans to deploy its first A380 by July this year. (StarBiz)

LBS Bina secures RM124.6m financing from MBSB
Property developer LBS Bina Group (LBS Bina) signed an agreement for term and bridging financing facilities of up to RM124.6m with Malaysia Building Society (MBSB) yesterday. The financing facilities would be used for construction of D’Island Residence, its high end development in Puchong. D’Island Residence has an estimated gross development value (GDV) of RM3.6bn and is expected to take five to seven years to be completed. (StarBiz)

Jetson unit gets RM15mil contract
Kumpulan Jetson said its subsidiary Jetson Construction SB has received a contract from the Shah Alam City Council for the construction and facelift of the outer wall of Wisma MBSA. The contract is valued at about RM15m. (StarBiz)

TNB withdraws suit against Integrax
Tenaga Nasional (TNB) has withdrawn a suit against Integrax Bhd and seven others. Tenaga Nasional owns a 22% stake in Integrax. The suit sought declarations for several matters that included some defendants acting in concert in the acquisition of control of Integrax and the breaching of capital market regulations in failing to make a mandatory general offer for Integrax shares. (StarBiz)


RHB Bank and RHB Investment Bank will jointly raise RM1.38bn to part finance the development, construction and operation of a new coal-fired power plant in Tanjung Bin. The 1,000MW power plant, which requires more than RM6bn is managed by Tanjung Bin Energy Issuer, a subsidiary of Malakoff Corp. (Bernama)

DRB-HICOM is evaluating three rival plans for Proton Holdings put forward by some of the world’s biggest players. Business Times understands that General Motors Corp plans to make a pitch to gain control of half of Proton’s production lines at its factory in Tanjung Malim, Perak. “The deal is valued at about RM800m and was brokered way before DRB-HICOM emerged as a dominant force in Proton,” said a source. It is believed that DRB-HICOM is keen to work with Volkswagen AG (VW) to produce a small Malaysian car using German technology. The third proposal is from Mitsubishi Motors Corp. It is understood that the Japanese are proposing to utilise Proton’s spare capacity to produce some 200,000 engines with a horse power of between 1,600cc and 2,000cc. (BT)

Proton Holdings senior director, group operations, Wolfgang Karl Epple, has tendered in his resignation, almost three years after driving forward the carmaker's quality initiatives. Proton's head of group communications, Muhammad Amyzaddin Raya, said Epple informed Proton that his resignation was due to his intention to take up another challenge in the automotive industry closer to home in Europe. "Over the next month, Epple will continue to oversee his portfolio and we are confident of a smooth transition," Muhammad Amyzaddin said. (BT)

BMW Group Malaysia has sold 471 units of BMW vehicles as of January this year, up 14% from January 2011. "This year, the premium segment continues to show significant opportunity, and we target a double-digit growth in our sales," Group managing director Geoffrey Briscoe said. (Bernama)

Genting Singapore plans to sell Singapore dollar-denominated perpetual bonds to yield between 5.125% and 5.25%, according to a person with direct knowledge of the matter. (BT)

The Federal government has announced the partial abolition of toll on the two-way Cheras-Kajang Highway effective midnight yesterday. Concessionaire Grand Saga is expected to receive compensation, but the value and method is unknown at this juncture This involves the abolition of the RM1 toll Batu 9 heading to KL and the 90 sen toll at Batu 11 heading to Kajang. The highway was initially set for a toll increase in 2013. Grand Saga's concession runs for 30 years and will end in 2030. (Financial Daily)

Sunway Bhd plans to more than double the size of its landbank in Medini Iskandar, raising it to around 2,000 acres from the already-announced acquisition of around 700 acres, industry sources said. “The project will be a significant one and Sunway hopes to differentiate itself from other developments in Iskandar with a unique offering, targeting very much the Singapore market,” said one source. “It will be more innovative than what Sunway has in Malaysia,” the source added. Another source said there was also a plan for a new road linking the Sunway project in Iskandar to the Second Link in order to give Singaporeans better access to the development. Sunway hopes to capitalise on its established brand name and its “Singapore connection” through the presence of the Government of Singapore Investment Corp (GIC) as one of its major shareholders since 1999. (Starbiz)

A nitrile glove price war will begin in the second half of this year as nitrile latex suppliers have over-expanded their capacity, said Supermax Corp Bhd executive chairman and group managing director Datuk Seri Stanley Thai. Thai said that for this year, there would be additional 250,000 wet tonnes of nitrile latex available in the market. “Margins of nitrile gloves could be lower than the competitive level of 11% to 15% this year, taking into account production from Indonesia and Thailand as well,” he said. (Starbiz)

Supermax aims to grow its share of the US dental nitrile glove market to 10% in the next two to three years from 4.4% presently, said its CEO Datuk Seri Stanley Thai. Thai said the company is in the process of constructing a new distribution warehouse on a 14-acre site in Chicago. The company, which is undergoing an expansion to multiply its production capacity for surgical gloves 10-fold, will rely on its enlarged capacity to grow its foothold in the US and Canada. (Bernama)

MRT Corporation sources have confirmed that negotiations with Jalan Sultan traders over land issues are nearing a deadlock, and could soon end in the acquisition of the group’s properties. This comes after MRT Corp CEO Datuk Azhar Abdul Hamid’s decision on February 24 to set a six-day deadline until Wednesday for the traders to strike mutual agreements that would ensure their properties remain untouched. Failing which, a frustrated Azhar had told a press conference, MRT Corp would have no choice but to allow the government to proceed with the compulsory land acquisition process under section 8 of the Land Acquisition Act. (Malaysian Insider)

Firefly is set to grow further via a planned expansion of the existing network while acquiring more turboprop aircraft to support growth. MAS CEO of short-haul operations, Ignatius Ong, said passengers can look forward to an increase in frequencies for selected routes in March and new ones in the near future. “This year, we expect to fly 30% more passengers,” Ong said. (Bernama)

AirAsia will reduce the prices of pre-booked in-flight meals regionally effective yesterday, with savings of up to 30% when booked online. The carrier’s meal price reduction comes follows the recent cut in check-in baggage and sports equipment fees. (Star Biz)

China Ouhua Winery Holdings Ltd announced the resignations of its chief financial officer Zheng Le Le and director Tam Fook Cheong. This came a few days after the company posted a fourth quarter net loss of almost RM7m, against a net profit of more than RM7.3m same quarter a year ago. The company’s cash balances also fell during the financial year from more than RM300m in 2010 to RM110m, while trade receivables increased to RM228m from a mere RM125m a year ago. Zheng said the resignation was due to “some personal reasons”, while Tam resigned due to heavy commitment to consultancy works. Tam was also the chairman of the audit committee prior to his resignation. (BT)

Poor record-keeping and the inability to verify sales transactions at Silver Bird Group Bhd are the reasons why Crowe Horwath, the independent auditors, has not been able to provide a basis for an audit opinion to the financial report for the financial year ended Oct 31, 2011 (FY11). The auditors said they were unable to verify the veracity of payments made amounting to RM7.6m for the refurbishment of an existing warehouse and factory, as well as not being able to obtain information to verify additions of plant and equipment amounting to RM4.9m. Besides that, the auditors were not able to verify transactions undertaken with five customers for the sweetened creamer business with revenue and cost of sales amounting to RM31.9m and RM31.3m respectively, while they were not able to verify the veracity of sales transactions undertaken with six customers from the bakery and telecommunications businesses amounting to RM149m, including RM83.9m in gross telecommunications sales. They added that the accounting and other records required by the Companies Act 1965 to be kept by the company and its subsidiaries “have not been properly kept in accordance with the provisions of the Act”. (Starbiz)

Malaysia Building Society (MBSB) expects loan growth of between 20% and 25% for its personal financing segment this year compared to 2011 despite Bank Negara Malaysia’s restrictive measures outlined in the new guideline, according to CEO Datuk Zaini Othman. “We expect the growth momentum to be sustainable this year because as at March 1, loans growth is still good. Perhaps we will see a slowdown by the middle of the year,” he said. (Financial Daily)

20120302 0937 Global Market Related News.

Asian Stocks Gain on U.S. Jobs, Extend Wins (Source: Bloomberg)
Asian stocks rose, with the regional benchmark index set to extend its longest weekly winning streak on record, after U.S. jobless claims fell to a four-year low and concern about Europe’s debt crisis eased. Sony Corp. (6758), Japan’s No. 1 exporter of consumer electronics, gained 1.1 percent in Tokyo. James Hardie Industries NV, which makes most of its revenue selling home siding in the U.S., increased 1.2 percent in Sydney. Hyundai Motor Co. (005380), South Korea’s largest automaker, climbed 2.8 percent in Seoul after its combined U.S. sales with Kia Motors Corp. jumped 26 percent last month. The MSCI Asia Pacific Index (MXAP) rose 0.5 percent to 128.52 as of 9:26 a.m. in Tokyo. The gauge is set for a 0.4 percent gain for the week and is set to extend its 10-week winning streak, the longest such run of gains since its inception in 1988. Japan’s Nikkei 225 Stock Average (NKY) advanced 0.8 percent, Australia’s S&P/ASX 200 Index increased 0.5 percent and South Korea’s Kospi Index gained 0.5 percent.

U.S. Stocks Advance Amid Bank Rally (Source: Bloomberg)
U.S. stocks advanced, sending the Standard & Poor’s 500 Index to the highest level since 2008, amid a rally in financial shares and after government data showed that jobless claims declined to a four-year low. JPMorgan Chase & Co. (JPM) and Bank of America Corp. (BAC) climbed at least 1.8 percent as Spanish and French borrowing costs fell. ConocoPhillips (COP) added 2.2 percent, pacing gains in energy producers, as crude oil traded near $110 a barrel. Gap Inc. (GPS), the largest U.S. apparel chain, increased 7.2 percent as same-store sales exceeded estimates. General Motors Co. (GM) jumped 1.7 percent after the automaker reported a surprise U.S. sales gain. The S&P 500 added 0.6 percent to 1,374.09 at 4 p.m. New York time, after a three-month gain. The Dow Jones Industrial Average rose 28.23 points, or 0.2 percent, to 12,980.30.
“We’re not lighting the world on fire, but we’re seeing improvement in the economy,” said Mark Masterson, managing director and partner at HighTower’s Masterson, Emma & Associates in Naples, Florida. Hightower has over $25 billion in assets. “The risk from the European situation has been reduced. I don’t know that it’s been eliminated. Best I can say at this point is that it appears to have been postponed.”

Japan Stocks Advance on U.S. Jobs Data, Falling European Borrowing Costs (Source: Bloomberg)
Japanese stocks advanced after U.S. jobless claims fell to a four-year low and borrowing costs fell in Europe, easing concern on the debt crisis and boosting the earnings outlook for exporters. Sony Corp. (6758), Japan’s biggest consumer-electronics exporter, rose 1 percent. Mitsubishi UFJ Financial Group Inc. (8306), the country’s top bank by market value, gained 1.2 percent after successful Spanish and French bond auctions. Mitsui & Co., a trading house that counts commodities as its biggest source of revenue, climbed 1.2 percent on rising oil and metals prices. The Nikkei 225 Stock Average (NKY) rose 0.8 percent to 9,787.17 as of 9:03 a.m. in Tokyo, heading for the weekly gain of 1.4 percent. The broader Topix Index advanced 0.8 percent to 838.24, with more than four times as many shares advancing as falling.

European Stocks Rise as Spanish, French Borrowing Costs Drop; Veolia Jumps (Source: Bloomberg)
European (SXXP) stocks rose, extending the Stoxx Europe 600 Index’s best start to a year since 1998, as Spanish and French borrowing costs dropped and a report showed initial jobless claims fell to a four-year low in the U.S. Veolia Environnement SA, the world’s biggest water utility, jumped the most since Oct. 2008. Adecco SA (ADEN), the world’s largest provider of temporary workers, surged 8.5 percent after reporting better-than-expected earnings. Vivendi SA (VIV) tumbled 10 percent, its biggest plunge in nine years, after forecasting that profit growth will only resume in 2014. The Stoxx 600 (SXXP) advanced 1 percent to 267.06 at the close. The gauge climbed 3.9 percent last month and rose 8.1 percent from the beginning of the year through yesterday. That was the biggest January-February increase since 1998 as optimism mounted that the euro area will contain its sovereign-debt crisis and U.S. economic data beat estimates.
“The Spanish auction went well and Italian yields moving below 2 percent is very positive,” said Trung-Tin Nguyen, a hedge-fund manager at TTN AG in Zurich. “This helps the overall sentiment.”

Yen, Dollar Weaken Against Euro as Gains in Asian Stocks Sap Haven Demand (Source: Bloomberg)
The yen and dollar weakened as gains in Asian shares sapped demand for so-called haven currencies. The yen slid 0.3 percent to 108.26 per euro as of 9:33 a.m. in Tokyo. The dollar lost 0.1 percent to $1.3326 against Europe’s currency.

Euro Set for Weekly Decline Amid Signs of Economic Slowdown; Yen Near Low (Source: Bloomberg)
The euro was poised for a weekly drop against most of its major peers before European data that economists said will show a decline in retail sales and a contraction in services. The 17-nation currency maintained a two-day decline versus the dollar after reports on manufacturing and unemployment yesterday added to evidence Europe’s debt crisis is hurting the region’s economy. The euro remained lower against the yen before a European Central Bank meeting next week at which policy makers are predicted to keep borrowing costs at a record low. The yen was within 0.7 percent of a nine-month low against the greenback. “The European economy is already in a recession, and the only question is how bad the recession gets,” said Robert Rennie, chief currency strategist in Sydney at Westpac Banking Corp. (WBC), Australia’s second-largest lender. “We do not have a growth plan in Europe. That certainly weighs on the euro.”
The euro was at $1.3319 as of 8:58 a.m. in Tokyo from $1.3311 in New York yesterday, poised for a 1 percent drop this week. It has lost 1 percent against the yen since Feb. 24 and traded at 108.06 yen today. The yen was unchanged from yesterday at 81.12 per dollar after weakening to 81.67 on Feb. 27, the lowest since May 31.

Japan Stocks Advance on U.S. Jobs Data, Falling European Borrowing Costs (Source: Bloomberg)
Japanese stocks advanced after U.S. jobless claims fell to a four-year low and borrowing costs fell in Europe, easing concern on the debt crisis and boosting the earnings outlook for exporters. Sony Corp. (6758), Japan’s biggest consumer-electronics exporter, rose 1 percent. Mitsubishi UFJ Financial Group Inc. (8306), the country’s top bank by market value, gained 1.2 percent after successful Spanish and French bond auctions. Mitsui & Co., a trading house that counts commodities as its biggest source of revenue, climbed 1.2 percent on rising oil and metals prices. The Nikkei 225 Stock Average (NKY) rose 0.8 percent to 9,787.17 as of 9:03 a.m. in Tokyo, heading for the weekly gain of 1.4 percent. The broader Topix Index advanced 0.8 percent to 838.24, with more than four times as many shares advancing as falling.

Bernanke Defends Fed’s Asset Purchases as Creating Jobs in Senate Hearing (Source: Bloomberg)
Federal Reserve Chairman Ben S. Bernanke defended the central bank’s expansive monetary policy, telling a Senate hearing that it helped create jobs and stabilize prices. “We’ve had about 2.5 million jobs created,” since November 2010, when the Fed started its second round of large- scale securities purchases. “We’ve seen big gains in stock prices, improvement in credit markets.” Bernanke, 58, sought to justify policies that have come under growing scrutiny from Republicans in Congress and on the campaign trail. Presidential candidate Mitt Romney has said he wouldn’t give Bernanke another term as chairman, and lawmakers, including Senate Minority Leader Mitch McConnell and House Speaker John Boehner, sent Bernanke a letter in September asking him to “resist further extraordinary intervention” in the economy.
“If you look back at quantitative easing two, so-called, in November 2010, the concerns at the time were that it would be highly inflationary, it would hurt the dollar, that it would not have much effect on growth,” Bernanke said today in response to a question from Senator Robert Menendez, Democrat of New Jersey, during testimony before the Senate Banking Committee.

Initial Jobless Claims in U.S. Lowest Since March ’08 (Source: Bloomberg)
The number of Americans filing first-time claims for jobless benefits fell to a level matching a four-year low, more evidence the labor market is healing. Applications for unemployment insurance decreased 2,000 in the week ended Feb. 25 to 351,000, Labor Department figures showed today. Economists forecast 355,000 claims, according to the median estimate in a Bloomberg News survey. The number of people on unemployment benefit rolls fell, while those getting extended payments also declined. Firing is on a downward trend as employers gain confidence in the outlook for economic growth. A smaller number of job reductions also puts those companies in place to hire additional employees as demand picks up. “Firing is not holding back the labor market,” said Ryan Sweet, a senior economist at Moody’s Analytics Inc. in West Chester, Pennsylvania, who forecast 350,000 claims. “Businesses recognize that they don’t need to lay off any more people. Down the road, they’re going to realize they need to hire more people.”

U.S. Consumer Spending, Incomes Rise (Source: Bloomberg)
Consumer spending in the U.S. rose less than forecast in January after little change the previous month, showing a lack of improvement in the biggest part of the economy. Purchases climbed 0.2 percent, while incomes increased 0.3 percent, Commerce Department figures showed today in Washington. The median estimate of economists surveyed by Bloomberg News called for a 0.4 percent increase in spending and a 0.5 percent rise in incomes. Warmer weather may have restrained spending on services such as utilities. Households, whose spending accounts for about 70 percent of the world’s largest economy, may be reluctant to increase purchases as gas prices continue to climb and home prices keep falling. Bigger gains in employment and wages may be needed to give consumers the confidence to boost spending.
“We’ve seen some pressures on the household sector in terms of gasoline prices,” said Scott Brown, chief economist at Raymond James & Associates Inc. in St. Petersburg, Florida. “It doesn’t look like things are falling apart, but things aren’t booming either.”

Manufacturing Unexpectedly Slows as Orders Cool: Economy (Source: Bloomberg)
Manufacturing in the U.S. grew less than forecast in February as orders eased, slowing the industry that has powered the two-year expansion. The Institute for Supply Management’s factory index fell to 52.4 from 54.1 in January, the Tempe, Arizona-based group said today. Readings above 50 signal growth. Jobless claims fell to an almost four-year low last week, and household purchases adjusted for prices were little changed for a third straight month in January, other reports showed. “The economy is expanding, but the data are choppy and somewhat inconsistent,” said John Herrmann, president of Herrmann Forecasting LLC in Summit, New Jersey. For manufacturing, “you probably have to look at the glass as a little more than half full. Consumers have lingering concerns about job security and the durability of the expansion and are hesitant to grow their spending.”
Higher fuel prices may be discouraging Americans from spending more on other goods and services even as improvement in the labor market spurs wage gains. At the same time, faster auto sales and increased exports are helping to underpin manufacturing, which accounts for about 12 percent of the world’s largest economy.

Bernanke Quells Talk of Fresh Fed Stimulus (Source: Bloomberg)
Federal Reserve Chairman Ben S. Bernanke said elevated unemployment and subdued inflation mean interest rates are likely to stay low, without offering any sign that the economy needs an additional monetary boost. Bernanke repeated testimony today in the Senate that he delivered yesterday in the House, describing “positive developments” in the job market while saying it’s still “far from normal.” He said the inflationary impact of higher gasoline prices is likely to be temporary. The semiannual testimony to Congress is a contrast to last July, when Bernanke outlined steps that the Federal Open Market Committee took at later meetings, and to the Fed’s January gathering, when some policy makers said more bond-buying might be needed.
“There’s certainly nothing in the testimony, certainly nothing explicit, to suggest that the Fed is really actively considering additional action,” said Stephen Stanley, chief economist at Pierpont Securities LLC in Stamford, Connecticut. The speech countered “a strong sense among some market participants that the Fed is ultimately going to do a third round of quantitative easing.”

U.S. Consumer Confidence Holds Near Four-Year High, Bloomberg Index Shows (Source: Bloomberg)
Consumer confidence in the U.S. held close to an almost four-year high last week as pessimism about the performance of the economy eased. The Bloomberg Consumer Comfort (COMFCOMF) Index was minus 38.8 in the period ended Feb. 26 after reaching minus 38.4, the highest level since April 2008, in the previous period. It marked the third straight week above minus 40, which is the level associated with recessions and their aftermath. The margin of error for the headline reading is 3 percentage points. For the fourth consecutive week, at least half the respondents viewed their personal finances as positive, a run that has been matched once since 2008. While job growth and higher stock values are underpinning sentiment, higher fuel costs pose a threat to further gains in confidence and may discourage households from spending more.
“Right now it does appear that stabilization in the labor market and rising share prices of equities are partially offsetting rising gasoline prices,” said Joe Brusuelas, a senior economist at Bloomberg LP in New York. “Should prices continue to rise at the pump, the Bloomberg Consumer Confidence Index, which has a strong inverse correlation with gasoline prices, will likely deteriorate.”

IMF Says Global Economy Still Facing Major Risk From European Debt Crisis (Source: Bloomberg)
The global economy faces “major downside risks” as its recovery continues to be threatened by stresses in the euro area, the International Monetary Fund said in a report prepared for the Group of 20 nations. The world economic expansion will slow to 3.3 percent this year from 3.8 percent in 2011, according to the surveillance report prepared for the meeting of G-20 finance ministers and central bank governors in Mexico City Feb 25-26. The euro economy is forecast to contract 0.5 percent this year, compared with growth of 1.6 percent in 2011. “The overarching risk remains an intensified global ‘paradox of thrift’ as households, firms, and governments around the world reduce demand,” the Washington-based IMF said in the report. “This risk is further exacerbated by fragile financial systems, high public deficits and debt and already-low interest rates.” “Advanced economies are experiencing weak and bumpy growth, reflecting both the legacies from the crisis and spillovers from Europe,” according to the report.

BOJ Board Openings Give Noda Chance to Shape Japan Monetary-Stimulus Talks (Source: Bloomberg)
Japan’s government will make two appointments to the central bank’s nine-member board in coming weeks, giving the administration scope to affect monetary policymaking as politicians press for greater stimulus. A group of lawmakers yesterday told ruling-party policy chief Seiji Maehara the replacements should favor doubling the Bank of Japan’s inflation target and stepping up asset purchases. The five-year terms of board members Seiji Nakamura, 69, and Hidetoshi Kamezaki, 68, former executives in the shipping and trading-company industries, conclude April 4. The picks may offer clues of Prime Minister Yoshihiko Noda’s intentions when BOJ Governor Masaaki Shirakawa’s term ends next year, and color policy discussions as the economy pulls out of its 2011 contraction. One hint would be any break from the practice of appointing members with similar backgrounds to those retiring, said economist Hiromichi Shirakawa.
“If they break tradition, or choose people clearly enthusiastic about beating deflation, that will make an impact on markets because it indicates more easing policies in the future,” said Shirakawa, who is chief Japan economist at Credit Suisse Group AG (CSGN) in Tokyo, used to work at the BOJ, and is no relation to the governor. “Politicians want some achievement before next year’s election,” he said, referring to a vote for the lower house of parliament due next year.

Japan Consumer Prices Fall for Fourth Month, Adding to Case for BOJ Easing (Source: Bloomberg)
Japan’s consumer prices fell for a fourth month, indicating the Bank of Japan (8301) may need to do more to counter deflation after expanding monetary easing. Consumer prices excluding fresh food dropped 0.1 percent in January from a year earlier, the statistics bureau said today in Tokyo. The median estimate was for a 0.2 percent decline, in a Bloomberg News survey of 28 economists. “The data reconfirm Japan’s deflation is deeply rooted,” said Masamichi Adachi, senior economist at JP Morgan Securities in Tokyo and a former central bank official. “The Bank of Japan will probably have to act more aggressively going forward.” The central bank last month set an inflation goal of 1 percent and increased bond purchases by 10 trillion yen ($123 billion) to aid a recovery in the world’s third-biggest economy.

EU Speeds Payments to Permanent Aid Fund (Source: Bloomberg)
European leaders agreed to provide capital faster for the planned permanent bailout fund in a concession to international pressure to strengthen the bloc’s defenses against the debt crisis. Euro governments might pay the first two annual installments into the 500 billion-euro ($666 billion) fund this year and complete the capitalization in 2015, a year ahead of schedule. A decision will come later today. “There will be an acceleration,” European Union President Herman Van Rompuy told reporters in Brussels late yesterday after an EU summit. “It could be starting with the payment of two tranches in 2012 but we have to take a definite decision.”. German Chancellor Angela Merkel, who last year pushed for the longer five-year payment schedule, reversed course this month and spearheaded the drive to speed up the timetable as world leaders and the International Monetary Fund pressed for bolder European action to stamp out the crisis.

Euro Bailout Fund Gets Ministers’ Approval to Raise Money for Greek Swap (Source: Bloomberg)
Euro-area finance ministers kept up pressure on Greece as they authorized the region’s bailout fund to raise money for a bond exchange, the first step in releasing funds from a 130 billion-euro ($173 billion) rescue package. Greece has passed “all required legislation” and the ministers “note with satisfaction” the progress achieved, Luxembourg Prime Minister Jean-Claude Juncker said after chairing a meeting of the finance chiefs in Brussels yesterday before he joined a European Union summit. As a result, they gave the go-ahead to the European Financial Stability Facility to issue bonds to finance their role in the debt swap. After the summit, Juncker said there was a back-up plan if the swap intended to ease the country’s financing load falls short. Speaking to reporters in Brussels after a European Union summit today, he declined to provide further details. “Yes, it exists,” he said, when asked, without saying more.
The progress toward wrapping up the second bailout for Greece came amid signs the crisis that has roiled the region since 2009 is easing. As leaders wrote a new budget rulebook, the European Central Bank pumped 1 trillion euros into the financial system, pushing the risk premium on Italian 10-year bonds compared to German securities to the lowest in six months. Yields on Italian two-year notes fell under 2 percent for the first time since October 2010.

20120302 0937 Global Commodities Related News.

Australian Bureau Warns Of Heavy Rain, Floods In NSW State (Source: CME)
The government's Bureau of Meteorology updated its severe weather and flood warnings for a vast region of central and southern New South Wales state. The heavy weather is already forcing evacuations in some country towns. The area includes some of Australia's prime agricultural land, and includes irrigated horticultural districts, rice growing areas and big licks of ground suitable for winter crops including wheat. It also includes cities and towns that service farming and other industries. The floods and heavy rain will disrupt the movement of livestock to sale yards in the short term, but longer term will underpin vigorous pasture growth and favorable planting conditions for the start of the winter cropping season in April and May, a spokesman for a rural merchandiser said by phone while requesting anonymity.
The severe weather in central and southern areas of the state follows floods across huge areas in the north, with these still working their way downstream through swollen river systems. These floods have already damaged summer crops including cotton and sorghum. The rains this year come after what the Bureau of Meteorology reported was Australia's "wettest two-year period on record" in 2010 and 2011, fueled by back-to-back La Nina events. A rain band with embedded thunderstorms now extends across much of southern and northwestern New South Wales, and areas of heavy rain within the band are likely to produce flash flooding over the coming days, the bureau said in a statement issued late Thursday morning. Among heavy falls already recorded, both Albury city and Nowra town received more than 100 mm in the 24 hours ended 2200 GMT, it said.
Three-day rainfall totals to Saturday are expected to be in the range of 70 millimeters to 200 mm within the warning area, with isolated larger totals possible, the bureau said. There is a greater than 70% chance of flooding in a host of river valleys throughout the state over the rest of this week, it said. Heavy rain may also lead to flash flooding in Victoria's East Gippsland and North East districts, the bureau said. New South Wales state emergency service has issued evacuation orders for parts of Cowra, Goulburn, Cooma and Queanbeyan, and said similar orders are likely to be issued for low-lying areas near the Hawkesbury Nepean River System, northwest of Sydney.

Commodities Rally to Highest Level Since May, Led by Soaring Energy Prices (Source: Bloomberg)
Commodities rose to the highest since May, led by surging energy prices, as tensions in the Middle East escalated and improving economic data signaled rising demand for raw materials. The Standard & Poor’s GSCI Spot Index of 24 raw materials rose 1.4 percent to settle at 713.18 at 3:48 p.m. New York time, after touching 717.45, the highest since May 5. Crude oil topped $110 a barrel for the first time in 10 months, and gold futures rebounded from the biggest decline of the year. Crude-oil futures surged after a report of a pipeline explosion in Saudi Arabia added to concern that supplies may be disrupted as the U.S. steps up pressure on Iran to stop developing nuclear weapons. Commodities also gained as data showed a third straight monthly expansion in Chinese manufacturing, and U.S. auto sales and jobless claims that were better than analysts forecast.

Corn (Source: CME)
US corn futures ended lower, succumbing to profit-taking pressure amid fears of slowing demand. Lower than expected weekly export sales and concerns about low ethanol margins are threatening demand outlooks, encouraging traders to take some profits off the table, analysts say. Expectations for a hefty increase in 2012 US corn plantings and concerns futures were overbought after failing to challenge Wednesday's multi-week highs attracted selling as well, analysts add. CBOT May corn ended down 4c at $6.54/bushel.

Wheat (Source: CME)
US wheat futures end mixed, with winter-wheat contracts slumping on bearish supply outlooks. Ample world supplies make it hard for wheat in general to rally, particularly with improved weather conditions for winter-wheat crops in the Plains, analysts say. Spring-wheat futures meanwhile, were underpinned as the higher-protein product continue to see good demand, notes Sterling Smith at Country Hedging. CBOT May wheat falls 4c to $6.64/bushel while May KCBT drops 2 1/2c to $7.06 and May MGEX climbed 6c to $8.17.

Bearish bets build in new-crop corn
-- Gavin  Maguire is a Reuters market analyst. The views expressed are his own.--
CHICAGO, Feb 29 (Reuters) - Prospects for a record-sized U.S. corn crop this year have triggered a wave of defensive positioning by grain traders in the options arena in recent weeks, indicating expectations that new-crop corn prices will succumb to further downside pressure going forward.
Open positions in December corn puts at the $5.00 per bushel strike price - some 60 cents below current prices - are up by more than 50 percent since the beginning of the month, while buy-side options at the $7 strike price have actually declined as traders seemingly reached a bearish consensus on new-crop corn in the wake of hefty planted acreage projections by the U.S. Department of Agriculture.

Wheat falls from 3-week top, soy dips after Feb rally
SINGAPORE, March 1 (Reuters) - U.S. wheat slid from a three-week top  as the market was pressured by ample supplies, while soy dipped after posting its biggest monthly gains in a year on strong demand and concerns over South American output.  "I think there is a bit of profit-taking in the market, particularly soybeans as the upside has been so strong," said Abah Ofon, commodities analyst at Standard Chartered in Singapore.

Argentina corn sales to China to lag despite deal
BUENOS AIRES, Feb 29 (Reuters) - Argentina is unlikely to sell much corn to China even though the countries reached an initial trade deal this month, as industry sources say the accord leaves too much room for China to reject shipments.
Argentine corn farmers are eager for access to China, whose growing economy has fueled an upsurge in global commodities demand. China is already a key market for Argentine soybeans and soyoil but the big Asian consumer prohibits many of the genetically modified corn strains produced in the South American country.

Argentine barley seen stealing acres from wheat
BUENOS AIRES, Feb 29 (Reuters) - Argentine farmers could beat this season's record barley crop in the next campaign as low prices in the local market discourage them from sowing wheat, industry analysts said on Wednesday.
Argentina's barley output rose 38 percent to 4.1 million tonnes in the 2011/12 harvest that finished in January, according to the Agriculture Ministry, boosted by growers' disillusion with government wheat policy.

Warm weather speeds up growth of U.S. wheat crop
CHICAGO, Feb 29 (Reuters) - Warm weather has sped up the growth of wheat crops in the southern U.S. Plains, raising concerns about the potential for damage down the line.
Crop development is ahead of schedule in Kansas, Oklahoma and Texas, top states for producing the variety of wheat used to make bread, according to government reports and an agronomist. That increases the risk of losses if a freeze hits this spring, as plants become more vulnerable to damage as they grow.

Cold spell may cut French wheat crop by 1 mln T
PARIS, Feb 29 (Reuters) - Severe winter weather in the past month could cut this year's wheat crop in France, the European Union's top producer, by about 1 million tonnes or roughly 3 percent after plants were damaged in some regions, analysts said on Wednesday.
Parts of eastern and northeast France could lose 5-10 percent of the area sown with winter soft wheat, analysts Agritel and Offre & Demande Agricole (ODA) said in its first estimates of losses based on surveys of farmers.

Ukraine sees sharp rise in corn sowing area
KIEV, Feb 29 (Reuters) - Ukraine's Agriculture Ministry expects the area sown to corn to increase to 4.5 million-5.0 million hectares this year from 3.6 million hectares in 2011, it said on Wednesday, making up for winter grain plantings lost to drought and cold weather.
"The total area sown to grains will be 15.8 million tonnes, roughly the same as in 2011," Leonid Sukhomlin, the head of the ministry's grains unit, told an industry conference.

U.S. Exporters Sell 120,000 Tons of Wheat to Iran, Most Since August 2008 (Source: Bloomberg)
U.S. exporters sold the most wheat to Iran in more than three years, the government said, raising speculation that the Persian Gulf country may be boosting stockpiles after production from last year’s crop declined. The sale of 120,000 metric tons of hard, red winter wheat is for delivery in the marketing year that ends May 31, the U.S. Department of Agriculture said today in an e-mailed statement. The sale was the biggest since Iran purchased 689,310 tons in a deal announced on Aug. 15, 2008. The U.S. hasn’t exported any wheat to Iran since a 54,267-ton shipment was sent in November 2009, USDA data show. Iran’s production of wheat, the country’s biggest crop, fell to 13.75 million tons in 2011, 13 percent less than a year earlier, the USDA estimates. While Iran is facing international sanctions over its nuclear program, U.S. restrictions provide exemptions for “licensed exports of agricultural commodities,” according to the Office of Foreign Assets Control, a division of the Treasury Department.

Wheat Drops for Second Day as U.S. Storms May Moisten Soil; Soybeans Fall (Source: Bloomberg)
Wheat fell for a second day in Chicago on speculation storms in parts of the U.S., the world’s biggest exporter, will boost soil moisture. Soybeans declined, threatening this year’s longest rally. Snow this week in parts of North Dakota, the biggest U.S. grower of wheat, will ease concerns about dry soil, Telvent DTN agricultural meteorologist Bryce Anderson said in a report yesterday. The storm will miss parts of eastern North Dakota and western Minnesota. Rain in parts of the southern Great Plains including Kansas, the second-biggest producer, will boost crops. “There is speculation that winter storms in the northern U.S. will increase soil-moisture levels in the run-up to the spring sowing period over the next two months,” said Carsten Fritsch, an analyst at Commerzbank AG in Frankfurt.
Wheat for May delivery dropped 0.6 percent to $6.6375 a bushel by 1:15 p.m. London time on the Chicago Board of Trade. The grain rose 0.3 percent last month. Milling wheat for May delivery traded on NYSE Liffe in Paris fell 0.5 percent to 207.25 euros ($275.93) a ton.

Spring Road Restrictions Seen Limiting Grain Movement In Western Canada (Source: CME)
Spring road restrictions in the Western Canadian provinces of Alberta, Saskatchewan and Manitoba have been, or are, in the process of being implemented and are expected to limit the producer's ability to move grain for the next couple of months, according to industry officials. There have already been select roads in Alberta which have had weight restrictions implemented. An official with Alberta's Transportation Department said the spring road restrictions, which have been implemented, will likely be kept in place until the end of April or May, with the actual lifting of the limitation dependent on how soon the frost is out of the ground. Depending on the highway, there are different restrictions, the official said. The limitations to be implemented range from 75% of legal weight to 90%. Meanwhile, Saskatchewan Highways and Transportation has issued an advisory to all truckers, farmers and drivers carrying heavy loads warning that spring road bans have been implemented in select areas of the province.
Typically, restrictions are implemented in early March in the southwest of the province and progress in a north-easterly manner across the province, the official said. Road restrictions may be in place for up to six weeks from the date of implementation. The official said the restrictions apply to secondary weight highways only. The road restrictions will likely be in place until May, but the limitation in the southern regions would probably be lifted first and then gradually move northwards. Spring road restrictions for all of Manitoba will be implemented March 11, information from Manitoba's Highways and Transportation said.

Cargill Says Took Nearly 880,000 MT Of Sugar Delivery (Source: CME)
Commodities trade giant Cargill Inc. took delivery of every lot of sugar delivered against the March contract on the ICE Futures U.S. exchange, a company spokeswoman said. The delivery of 17,325 lots, more than 880,000 metric tons, was the largest delivery since last May. "They have a place for the sugar, I assume, or they could also maybe have concerns about future supply from Brazil," said Mike McDougall, senior vice president at Newedge. Cargill had also taken delivery of nearly 1 million metric tons of sugar against the March contract a year ago. "Following the expiry of the ICE March raw sugar futures contract yesterday we can confirm that Cargill took delivery of 17,325 lots which comes to just over 880k tons," said a Cargill spokeswoman in an email. Sugar was delivered from Brazil, Thailand, the Philippines and several Central American countries. Sugar for May delivery on the ICE U.S. Futures exchange is down 1.5% at 24.64c/lb., below the key psychological level of 25c/lb.
"I think (the market's) taking the delivery maybe a little negatively, but generally we'll get a little trend move off the hype," McDougall said.

S.Africa sugar output f'cast at 1.822 mln T
JOHANNESBURG, March 1 (Reuters) - South Africa's 2011/12 sugar output is estimated at 1.822 million tonnes, slightly down from a previous forecast of25 million tonnes, the South African Sugar Association (SASA) said.
The sugarcane crush forecast was left unchanged at 16.8 million tonnes, said the industry association, which represents producers and millers of the sweetener in Africa's biggest economy, in a statement on its website.

India's Oct-Feb coffee exports ease 2.4 pct y/y
MUMBAI, March 1 (Reuters) - Indian coffee exports eased 2.4 percent on year to 114,049 tonnes in the first five months of the coffee year from October, the state-run Coffee Board said in a statement on Thursday.
India, the world's fifth biggest producer, accounts for only 4.5 percent of the world's output, but exports 70-80 percent of its produce. Italy, Russia and Germany are the top three buyers of Indian coffee.

Indonesia's Sulawesi Feb cocoa bean exports fall 20 pct y/y- industry
JAKARTA, March 1 (Reuters) - Indonesia's cocoa bean exports from its main growing island of Sulawesi slipped 20 percent in February from the same month a year ago, and was down 11 percent from the previous month, industry data showed on Thursday.
Sulawesi cocoa exports were at 7,917.7 tonnes in February from 9,871.4 tonnes a year ago, data from the Indonesia Cocoa Association showed. January exports were at 8,904.25 tonnes.

Brazil's northeast enjoys sweet sugar cane crop
SAO PAULO, Feb 29 (Reuters) - Record output from Brazil's northeast sugarcane crop, an often overlooked but key source of global supply, will help offset losses from the struggling main center-south cane region this year partly due to an irrigation push that is giving it an edge.
The rise in cane output in the northeast, which churns out almost as much sugar as Russia, has allowed the region to become one of the world's top 10 producers, at a time when strong global demand and weak output from the massive center-south region has pushed sugar futures above 25 cents per lb .

Brazil's 2012/13 cane crush to start late - Unica
SAO PAULO, Feb 29 (Reuters) - Brazil's 2012/13 (April-March) center-south cane crushing season will start about 10 days later on average than last year's harvest began, the cane industry association Unica said on Wednesday.
Dry weather during planting in early 2011 slowed the growth of the cane crop, which will delay deliveries of ripe cane for the new crushing season, analysts say.

India 2012/13 cotton area seen falling 10 percent
MUMBAI, Feb 29 (Reuters) - The area under cotton cultivation in India could fall up to 10 percent in 2012/13 season beginning in October, as lower returns from the fibre in 2011 may prompt farmers to switch to other crops, said the Cotton Association of India (CAI), a trade body.
Farmers are expected to increase area under crops such as soybean, guar, groundnuts and pulses as returns from these were higher than from cotton in 2011, Dhiren N. Sheth, president of the association, told Reuters.

December data underscores weak U.S. gasoline demand
--Robert Campbell is a Reuters market analyst. The views expressed are his own.--
NEW YORK, Feb 29 (Reuters) - Monthly data for December 2011 released on Wednesday shows U.S. gasoline demand continued to come in well below year-ago levels even as the economy accelerated, suggesting some of the weakness seen in more recent monthly data may not be out of place.
Analysts have questioned the picture painted of U.S. gasoline demand by the Energy Information Administration's weekly "product supplied" estimate as it has regularly come in down 5 percent or more from year-ago levels.

US ethanol production slides, lowest since October
Feb 29 (Reuters) - U.S. ethanol production slid 2.5 percent in the last week, falling to the lowest point since early October, while stocks continued to build, the Energy Information Administration reported Wednesday.
U.S. ethanol production totaled 896,000 barrels per day in the seven days to Feb. 24, down 23,000 barrels per day from the previous week's production.

China oil, copper imports decouple from PMIs
 --Clyde Russell is a Reuters market analyst. The views expressed are his own.--
SINGAPORE, March 1 (Reuters) - The health of China's giant manufacturing sector is often cited when talking about the nation's commodity demand, but it appears that imports of crude oil and copper have decoupled from the industrial data.
The release of the two monthly Purchasing Managers' Indexes, one by the government's statistics office and the other by HSBC, is invariably accompanied by lots of talk on whether China's economy is cooling too fast or at just the right pace.

Brent steady above $122 on supply woes, China, U.S.
SINGAPORE, March 1 (Reuters) - Brent crude futures held steady above $122, drawing support from faster-than-expected expansion of the U.S. economy and better factory data from China amid concerns of supply disruption from the Middle East.  
"There are just too many geopolitical risk factors out there that are supporting oil," said Tony Nunan, a risk manager at Mitsubishi Corp.

Western sanctions tighten squeeze on Iran oil exports
WASHINGTON, March 1 (Reuters) - Western trade sanctions against Iran are strangling its oil exports even before they go into effect, a U.S. advisory body has found, amid warnings that any shortages will only push up crude prices and strain a weak global economy.
With crude prices trading around 10-month highs and limited spare production capacity worldwide, the United States may offer Iran's biggest customers waivers from the oil sanctions, which take effect June 28.

Iraq capable of doubling oil output by 2015-IEA
BAGHDAD, Feb 29 (Reuters) - Iraq is capable of more than doubling its crude oil production within three years, with the pace of further growth slowing steeply afterwards, the West's energy agency said on Wednesday.
Iraq, which sits on the world's fourth-largest reserves, signed deals with major oil firms to boost production levels - currently at about 2.9 million bpd - to as high as 12 million bpd by 2017, betting on rivalling top global producers Russia and Saudi Arabia.

Oil Trades Near One-Week High on Economic Recovery, Middle East Tension (Source: Bloomberg)
Oil traded near the highest price in almost a week in New York on speculation signs of a U.S. economic recovery will lift fuel demand and concern that tension with Iran will disrupt crude supplies. Futures were little changed after climbing 1.7 percent yesterday, trimming the first weekly decline in four. U.S. jobless claims fell to an almost four-year low and consumer confidence held close to an almost four-year high last week, reports showed. Iranians vote today in the Persian Gulf nation’s first election since 2009, as a dispute with the West over the country’s nuclear program raises the prospect of military conflict in a region that holds more than half the world’s oil. Oil for April delivery was at $108.87 a barrel, up 3 cents in electronic trading on the New York Mercantile Exchange at 10:55 a.m. Sydney time. The contract yesterday rose $1.77 to $108.84, the highest close since Feb. 24. Prices are down 0.8 percent this week and 6.5 percent higher the past year.

Iron Ore Extends Bull Market as Supply Growth Declines (Source: Bloomberg)
Iron ore, the world’s second-biggest commodity cargo after crude oil, is extending a bull market after rallying 22 percent from a 22-month low in October as the slowest expansion in exports in 11 years restricts supplies. Seaborne supply will advance 3.8 percent to 1.09 billion metric tons this year, the smallest gain since 2001, according to Clarkson Plc, the largest shipbroker. Prices in China, the biggest importer, may rise 10 percent to an average of $157.50 a ton in the fourth quarter, the median of 11 analyst estimates compiled by Bloomberg shows. Shares of Vale SA (VALE), which ships more ore than any other company, will rise 19 percent to $30.42 in the next 12 months, the average of 16 estimates shows.
New mines and expansions of existing ones are being postponed by rising costs and licensing delays. Morgan Stanley cut its forecast for export supply by 9.6 percent since October and expects a 99 million-ton deficit in the seaborne market this year, at least the ninth consecutive annual shortage. Vale will report its second-biggest profit ever this year, the mean of 11 analyst estimates compiled by Bloomberg shows. “The wall of additional iron-ore supply that investors have been fearing is going to be late,” said Neil Gregson, who helps manage about $7.4 billion of commodity assets at JPMorgan Asset Management in London. “Iron ore remains a tight market.”

Copper Bull Streak Extends to Longest Since October on Demand: Commodities (Source: Bloomberg)
Copper traders are bullish for a fourth consecutive week, the longest streak since October, as manufacturing strengthens from China to the U.S. and stockpiles decline to the lowest in more than two years. Thirteen of 29 analysts surveyed by Bloomberg expect the metal to gain next week and six were neutral. Inventories tracked by the London Metal Exchange fell to 292,250 metric tons yesterday, the lowest since August 2009, and orders to withdraw more metal are close to an eight-year high, bourse data show. Manufacturing from China to the U.S. is expanding as the American recovery strengthens and European leaders work to contain the region’s debt crisis. That’s boosting demand for raw materials from consumers and investors, with Barclays Capital predicting a third consecutive annual shortage in global copper supplies in 2012. Commodities beat stocks, bonds and the dollar for the first time since July last month.
“People feel that the U.S. is on a gradually improving trend and overall the tone is better,” said Carole Ferguson, an analyst at Fairfax IS in London. “If you get a demand-led story in copper then it can rally again. It’s supported by the long- term supply and demand picture.”

20120302 0936 Soy Oil & Palm Oil Related News.

The Netherlands will be pushing for the lifting of European Union (EU) import duties on sustainably produced crude palm oil at the European Commission in Brussels. This was announced by its Minister of Economic Affairs, Agriculture and Innovation, Maxime Verhagen late last year as he wanted the EU import tariffs for sustainable palm oil to be lowered compared with conventionally produced palm oil as early as possible. He presented this proposal in Brussels as part of the recent negotiations of the EU with Malaysia over a free trade agreement, according to Malaysia External Trade Development Corp (Matrade) in a statement. Matrade notes, however, that the recommendation would cover only sustainable palm oil, with higher import duties to remain for other non-sustainable produce. (Starbiz)

Sabah Chief Minister Datuk Seri Musa Aman is confident the biogas project being explored by the plantation sector in the state can create a positive image for the oil palm industry. He said that it would be seen as an environment-friendly industry which gave serious consideration to the protection of the environment. He said the technology for biogas production from oil palm waste was not just environment-friendly but it also helped in the electricity generation for the plants. (Bernama)


Soybeans (Source: CME)
US soybean futures ended higher, continuing to draw support from smaller South American crop forecasts. The smaller crop outlook fuels speculation of increased US demand that will lead to a tighter US soy balance sheet out through 2013, analysts say. The need to keep soybean prices competitive with corn to entice farmers to maintain adequate US soybean acres added support for prices as well, analysts say. CBOT May soybeans ended up 2 1/2c at $13.22 1/2/bushel.

Soybean Meal/Oil (Source: CME)
Soy-product futures end mixed as traders continue to take profits on long soyoil/short soymeal spreads. Soymeal rose to 5-month highs, buoyed by concerns that smaller South American soy production will generate fresh demand, but lower-than-expected weekly export sales limited gains, analysts note. CBOT May soymeal rose $2.60 to $355.50/short ton while May soyoil dropped 0.20c to 54.27c/pound.

Palm oil eases on weak Malaysian exports
SINGAPORE, March 1 (Reuters) - Malaysian crude palm oil futures fell , as export trends pointed to weaker demand, although losses were capped by positive factory data from second-largest palm oil importer China.    "Exports are slightly negative because it suggests demand remains relatively weak, but it could be because we have fewer working days in February," said Ivy Ng, an analyst with Malaysia's CIMB Investment Bank.

Singapore's Indofood Agri eyes palm oil, rubber, sugar assets
SINGAPORE, Feb 29 (Reuters) - Singapore-listed palm oil firm Indofood Agri Resources  will set aside $200 million to buy palm oil, rubber and sugar assets outside Indonesia, where it currently has a big presence, as it looks to diversify future profits, a top official said.
Indofood Agri has a quarter of a million hectares of oil palm estates as well as refineries in Indonesia, the world's largest palm oil producer. It also has rubber plantations and sugar mills in the southeast Asian country.

Investors in Malaysia may shift palm refining ops to Indonesia
KUALA LUMPUR, Feb 29 (Reuters) - Foreign investors in Malaysia may shift some existing palm oil refining operations to top producer Indonesia to tap higher margins after Jakarta lowered its processed edible oil export taxes, said a top Malaysian industry official.
That may put Malaysia's over $20 billion industry in jeopardy as foreign investors and smaller palm oil refiners process 60 percent of the country's output, said Palm Oil Refiners Association of Malaysia (PORAM) Chief Executive Mohammad Jaaffar Ahmad.

China palm oil stocks at nearly 1 mln tonnes, more imports eyed-Reuters survey 
Today 18:34 By Chew Yee Kiat 
SINGAPORE, March 1 (Reuters) - China's palm oil stocks probably rose to nearly a million tonnes in February with a further build-up seen as traders keep buying cargoes from Malaysia and Indonesia on concern over strengthening prices, a Reuters survey showed on Thursday. Stocks in the world's No.2 consumer of the tropical oil probably rose to 950,000 tonnes over eight months -- more than double the usual 400,000 tonnes -- according to a median survey of five Chinese and Singaporean trading houses polled ahead of the Bursa Malaysia Palm Oil Conference next week. China's February imports of palm oil probably stood at 400,000 tonnes, 9.7 percent lower than 443,241 tonnes in January although these levels still reflected strong demand, the poll respondents said. Palm oil demand has remained robust on the back of re-stocking after the Lunar New Year festival in January and survey respondents said that it could go higher as Chinese importers want to lock in cargoes before prices rise further. 
One survey respondent said stocks may go up to 1.5 million tonnes before imports start to slow as China has the capacity to store the edible oil. Higher palm oil stock levels also make it easier to stabilise edible oil prices in the country where inflation has hit a three-month high in January. China is stocking up not only on palm oil but other commodities such as soybean oil and copper, the respondent added. The country does not release official figures on stock levels. China imported around 250,000 tonnes of palm oil from Malaysia and 185,000 tonnes from Indonesia in January, Reuters calculations on China's customs data showed. 


FACTORS TO WATCH: 
Resilient China demand may lead to better Malaysian export numbers in March. In February exports declined about 10 percent, cargo surveyors data showed, initially sparking fears that Asian demand for the edible oil might be slowing.


MARKET REACTION: 
The palm oil market may rally in March if China is snapping up more cargoes with the prices probably staying well above 3,200 ringgit ($1,000). In February alone, the market rose more than six percent on soaring crude prices.


VEGOILS-Palm oil edges up; weak Malaysia exports cap gains DBYU2 FCPOc3 - RTRS
By Chew Yee Kiat
SINGAPORE, March 1 (Reuters) - Malaysian crude palm oil futures edged up on Thursday, spurred by positive factory data from second-largest importer China but gains were capped as export trends showed weaker demand. Malaysian export numbers eased in February, cutting palm oil gains to 3.4 percent so far this year. Some market players attributed the lower exports to a shift in orders to top producer Indonesia, which slashed export taxes for refined products. "Exports are slightly negative because it suggests demand remains relatively weak, but it could be because we have fewer working days in February," said Ivy Ng, an analyst with Malaysia's CIMB Investment Bank. "It also may be because logistics have not been smooth due to the holiday season. It could also imply that demand has been shifting to Indonesia because of the favourable tax structure there." 
Benchmark May palm oil futures FCPOc3 on the Bursa Malaysia Derivatives Exchange gained 0.5 percent to close at 3,285 ringgit ($1,095) per tonne. Traded volumes stood at 20,170 lots of 25 tonnes each, thinner than the usual 25,000 lots. Malaysian palm oil exports for February eased 10.5 percent from a month earlier , cargo surveyor Intertek Testing Services said. Another cargo surveyor, Societe Generale de Surveillance, reported a similar downward trend, saying exports dropped 9.5 percent from January. Market players expect February stock levels to be flat or end higher as exports seem to be slowing at a faster pace than production in second-largest palm oil producer Malaysia. Reuters technicals analyst Wang Tao said palm oil would fall to 3,212 ringgit per tonne, as indicated by a Fibonacci retracement. Oil rose above $123 a barrel on Thursday as signs of economic growth in China and the United States bolstered the demand outlook and concern persisted about supply disruption from Iran. 
In other vegetable oil markets, the U.S. soyoil contract for March delivery BOH2 was flat in Asian trade and the most active September 2012 soyoil contract DBYU2 on China's Dalian Commodity exchange lost 1.1 percent.