Monday, March 19, 2012

20120319 1818 FCPO EOD Daily Chart Study.

FCPO closed : 3373, changed : -25 points, volume : higher.
Bollinger band reading : pullback correction upside biased.
MACD Histrogram : weakenning, buyer taking profit.
Support : 3350, 3300, 3270, 3250 level.
Resistance : 3420, 3450, 3470, 3500 level.
Comment :
FCPO closed recorded loss with increasing volume transacted. Soy oil price currently trading weaker after last Friday closed little lower while crude oil price currently sliding lower.
Price fall lower as traders continue to book profit while awaits tomorrow export data.
Daily chart form down bar candle with 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.

20120319 1732 FKLI EOD Daily Chart Study.

FKLI closed : 1572 changed : -4 points, volume : higher.
Bollinger band reading : correction range bound little upside biased.
MACD Histrogram : falling lower, buyer seller battling.
Support : 1570, 1565, 1550, 1540 level.
Resistance : 1580, 1590, 1600, 1610 level.
Comment :
FKLI closed recorded loss with better volume participation doing 1.5 points discount compare to cash market that closed little higher. Last Friday U.S. markets pullback little lower and today Asia markets ended mixed while European markets currently trading lower.
Global markets traded mixed after China government data showed property prices falling in most cities and IMF deputy managing director statement of China is heading for soft-landing while investors awaits U.S. homes data.
Daily chart analysis revised to suggesting a correction range bound little upside biased market development.
When to buy : buy at support or weakness with quick cut loss and profit target.
When to sell : sell at resistance or strength with quick cut loss and profit target.

20120319 1659 Regional Markets EOD Daily Chart Study.

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

20120319 1635 Global Market & Commodities Related News.

Shares rise, investors see brighter US economy
TOKYO, March 19 (Reuters) - Asian shares edged higher and the dollar was firm against the yen with investors buoyed after the U.S. market hit an almost four-year high last week and with higher European stocks reflecting signs of growing "U.S. economic data continues to be solid," said Fujio Ando, senior managing director at Chibagin Asset Management in Tokyo.
"Confidence in the U.S. economy will push the Nikkei up to 10,200 even this week, although we will have to watch the housing data this week."

Yen net shorts surge, highest since April-CFTC
NEW YORK, March 16 (Reuters) - Currency speculators increased bets against the Japanese yen in the latest week to their highest in 11 months, according to data from the Commodity Futures Trading Commission released on Friday.
Yen net shorts surged to 42,380 contracts, their largest short bet since April last year, compared to last week's net short position of 19,358.

FOREX-Yen on the defensive, hits five-mth lows vs euro
SYDNEY/SINGAPORE, March 19 (Reuters) - The yen stayed on the defensive on Monday with the euro reaching a fresh five-month high against the Japanese currency, while the dollar nursed losses following a setback late last week.    
The euro rose as high as 110.15 yen at one point on trading platform EBS, its highest level since late October. It later pared its gains and was last changing hands at 109.91 yen , steady from late U.S. trade on Friday.

China to reform, grow economy, IMF eyes freer yuan
BEIJING, March 18 (Reuters) - China cannot delay tough economic reforms, Vice Premier Li Keqiang said on Sunday, underscoring the top leadership's push for market-based change after the sacking last week of an ambitious provincial leader who wanted a bigger state role in the economy.
Li, widely expected to succeed Wen Jiabao as premier in a leadership transition that begins later this year, promised flexible policies to keep growth brisk and prices stable, with a focus on boosting domestic demand and pursuing structural reforms to make growth more stable and balanced.

US old-crop corn at 4-month top on Chinese demand hopes
SINGAPORE, March 19 (Reuters) - U.S. old-crop corn rose for a third straight session to its highest since November on expectations of more Chinese purchases, while soybeans were little changed, taking a breather after climbing to a six-month top.
"U.S. export sales and lower supplies from South America have had supportive influence for the entire oilseeds complex, including the palm oil," said Ker Chung Yang, an analyst at Phillip Futures in Singapore.

India's 2011/12 oilseed output up, rapeseed falls-trade body
NEW DELHI, March 18 (Reuters) - India's oilseed output rose 2.2 percent to 26.01 million tonnes in the current crop year, a leading trade body said on Sunday, with the main winter-sown rapeseed crop hit by adverse weather conditions, and suggesting edible oil imports might rise.
Output of rapeseed dropped by 12.6 percent to 6.03 million tonnes in the year to June 2012, said the Central Organisation for Oil Industry and Trade, which usually gives its estimate for the full year in mid-March after the crop has been harvested.
Argentina truck strike imminent, may disrupt corn, soy hauling
BUENOS AIRES, March 18 (Reuters) - Owners of Argentine grain trucks said on Sunday they would start an indefinite strike at midnight (0300 GMT) to seek higher transport rates, a protest that could disrupt hauling during early corn and soy harvesting.
Argentina, one of the world's top exporters of corn, soybeans and soy products, often sees strikes in March, when crop gathering begins and unions seek wage hikes.
US Corn Belt farmers resisting the urge to plant early
CHICAGO, March 16 (Reuters) - Shirt-sleeve weather this week across America's central grain belt tempted farmers to start planting corn early but expensive seeds and worries about insurance covering any sudden cold snap have kept crop planters out of fields.
"We've got a lot invested in this crop. We want to be careful," said central Illinois farmer Tim Seifert, who doesn't want to take the chance of seeing young corn seedlings hurt by an April frost.
Early-planted Argentine corn hit by Dec-Jan drought
BUENOS AIRES, March 16 (Reuters) - Early-planted corn in global No. 2 exporter Argentina was pummeled by a December-January drought, but later-seeded fields have since been enlivened by regular rains, the government said on Friday.
Dry, hot weather that blighted the Pampas during the dog days of the Southern Hemisphere summer chopped corn yields by 40 percent in the Bragado district of key agricultural province Buenos Aires, the Agriculture Ministry said in a report.
Ukraine to cut sugar output in 2012 - agency
KIEV, March 16 (Reuters) - Ukraine is likely to reduce its white sugar production by 14 percent to about 2 million tonnes in 2012 due to a smaller sowing area after a significant overproduction in 2011, Interfax news agency quoted a local sugar union as saying on Friday.
An official from Ukrtsukor sugar union was quoted as saying the area under sugar beet was likely to fall to 515,000 hectares this year from 544,000 hectares in 2011.

Brent crude holds above $126 on Iran, econ outlook
SINGAPORE, March 19 (Reuters) - Brent crude held above $126 a barrel, extending last Friday's gains, as prices were supported by continued concerns over a potential supply disruption from Iran and the prospect of a stronger U.S. economy lifting oil demand.
"It's a question of whether other producers can handle a significant supply disruption," said Ric Spooner, the chief market analyst with CMC Markets in Sydney. "The market is still building a risk premium into prices due to the potential difficulty
with Iran."

Tokyo Steel to raise April product prices by $24
TOKYO, March 19 (Reuters) - Japan's biggest construction steelmaker, Tokyo Steel Manufacturing Co , will raise prices in April by 2,000 yen per tonne for all its products except thick plates, to reflect higher prices in Asia and a weaker yen.    
Japanese manufacturers' exports and the balance of demand and supply in the domestic steel market are improving fast after the yen weakened last week to an 11-month low against the dollar, Kiyoshi Imamura, sales director of Tokyo Steel, said.

China daily crude steel output up 13 pct in early March -CISA
SHANGHAI, March 19 (Reuters) - China's daily crude steel output stood at 1.898 million tonnes for the first ten days of March, surging 13 percent from the preceding period, data from the China Iron & Steel Association (CISA) said on Monday.
Steel demand has started to pick up in the world's top consumer in March amid a gradual recovery in construction activity, but buyers remain wary about a slowdown in economic growth, which may continue to weigh on the steel sector.

Shanghai copper drops on China demand worries
SINGAPORE, March 19 (Reuters) - Shanghai copper fell 0.7 percent, as indications of a weakening property market in China added to worries about demand from the top consumer of the metal.
"Copper prices at $8,500-$8,600 are purely a reflection of market liquidity but not real consumption," said Bonnie Liu, an analyst at Macquarie in Shanghai.

Australian iron ore shipping activity resumes after cyclone
PERTH, March 18 (Reuters) - Shipping operations at Australia's Port Hedland have resumed after a tropical cyclone that passed through the Pilbara iron ore belt weakened to below cyclone intensity and moved inland on Sunday.
Port Hedland, the region's largest iron ore terminal, closed the anchorage for 66 hours and the port for a total of 52 hours due to Tropical Cyclone Lua, which crossed the coast some 100 kms (60 miles) north in a sparsely populated area on Saturday afternoon, local time.

China daily crude steel output up 13 pct in early March -CISA
SHANGHAI, March 19 (Reuters) - China's daily crude steel output stood at 1.898 million tonnes for the first ten days of March, surging 13 percent from the preceding period, data from the China Iron & Steel Association (CISA) said on Monday.
Steel demand has started to pick up in the world's top consumer in March amid a gradual recovery in construction activity, but buyers remain wary about a slowdown in economic growth, which may continue to weigh on the steel sector.

Gold tracks oil higher, gains may be capped
SINGAPORE, March 19 (Reuters) - Gold rose more than half a percent after firm oil prices prompted safe haven buying from investors and speculators, while technical buying also resurfaced after bullion bounced from its weakest level in two monthS.
"You can see there's short-covering. I think it's technical. The upside will be at $1,675 to $1,680, and there will be some resistance there," said Ronald Leung, director of Lee Cheong Gold Dealers in Hong Kong.

METALS-Shanghai copper drops on China demand worries
SINGAPORE, March 19 (Reuters) - Shanghai copper fell 0.7 percent on Monday, as indications of a weakening property market in China added to worries about demand from the top consumer of the metal.
Chinese home prices fell in February from January for a fifth consecutive month and are expected to continue heading south in coming months.
A cooler property market not only depresses demand for base metals and steel as construction materials, but also dampens consumption from the home appliances sector, which is another key consumer of copper.

PRECIOUS-Gold tracks oil higher, gains may be capped
SINGAPORE, March 19 (Reuters) - Gold rose more than half a percent on Monday after firm oil prices prompted safe haven buying from investors and speculators, while technical buying also resurfaced after bullion bounced from its weakest level in two months.  
But gains may be capped by worries that a plan by main consumer India to double its import duty could cause a temporary slip in purchases. Silver tracked gold higher, while platinum prices stayed at premiums to bullion on supply concerns.

20120319 1132 Global Market & Commodities Related News.

GLOBAL MARKETS-Shares rise, investors see brighter US economy
TOKYO, March 19 (Reuters) - Asian shares edged higher and the dollar was firm against the yen on Monday with investors buoyed after the U.S. market hit an almost four-year high last week and with higher European stocks reflecting signs of growing stability in the euro zone.
"The economic fears that dominated last year have dissipated, and the backdrop of lower economic uncertainty should provide support for risk assets," Barclays Capital analysts said.

COMMODITIES-Oil up on supply woes; weak dollar helps other commods
NEW YORK, March 16 (Reuters) - Oil prices jumped on Friday by the most in two weeks on supply worries, while soybeans hit a six-month high on crop worries and most other commodities rose on extended weakness in the dollar.
"Spare capacity is really very tight, and any natural disaster or problem in the Middle East could be a real problem," said Rob Montefusco, an oil trader at Sucden Financial, highlighting supply stoppages in Syria, Sudan and elsewhere.

OIL-Oil climbs on Iran tensions, weak dollar
NEW YORK, March 16 (Reuters) - Oil prices rose more than 2 percent on Friday on support from the continuing tensions over Iran's disputed nuclear program and the potential for supply disruptions in the region along with the weaker dollar.
"The reasoning is that the Fed will not be as likely to pull back on stimulus or raise interest rates, so the dollar weakened and that pushed up oil, along with the uncertainty about Iran and the SPR," said Phil Flynn, analyst at PFGBest Research in Chicago.

Cameroon crude output on track for 100,000 bpd in 2012
YAOUNDE, March 18 (Reuters) - Cameroon is on target to double crude production to 100,000 barrels per day in 2012 after independent oil producer Perenco raised output from the Baf 3 oilfield to 50,000 bpd, an official at Cameroon's state-run hydrocarbons corporation said.
Oil production in the central African state, which peaked at 185,000 bpd in the mid-1980s, averaged around 65,000 bpd in 2011 due to maturing oil fields.

Gasoline pushes up US inflation, dents confidence
WASHINGTON, March 16 (Reuters) - U.S. consumer prices rose the most in 10 months in February as the cost of gasoline spiked,  but there was little sign that underlying inflation pressures were building up.
Surging gasoline prices put a small dent in consumer confidence early this month, other data showed on Friday. Still, Americans do not believe the sharp run-up in prices will last.
Saudi oil sales to US jump; Iran response or just business?
NEW YORK/LONDON, March 16 (Reuters) - Saudi Arabia is preparing to extend this year's unexpected jump in oil sales to the United States, adding to speculation about the response of the world's top oil exporter to sanctions against Iran and a rally in prices.
The kingdom's shipments to the United States have quietly risen 25 percent to the highest level since mid-2008, according to preliminary U.S. government data, a sizeable leap that appears at least partly related to the imminent completion of a major expansion at its joint-venture Motiva refinery in Texas.

NATURAL GAS-US natgas gains 2 pct in weekend short cover
NEW YORK, March 16 (Reuters) - U.S. natural gas futures rose 2 percent on Friday, eking out a slight gain on the week, after tumbling early this week to their lowest mark in just over 10 years.
"The surplus still building in inventory versus both last year and the five-year average is going to get harder and harder to work off with only weeks until the start of spring. As such, for the short to medium-term, I doubt natural gas is going to reverse the downtrend it has been in for an extended period of time," said Energy Management Institute's Dominick Chirichella.

EURO COAL-Prices dip slightly despite oil rebound
LONDON, March 16 (Reuters) - Prompt physical coal prices slipped by around 20 cents on Friday despite oil's rebound to above $124 a barrel.
&#8220Further U.S. thermal coal production cuts are likely,&#8221 Morgan Stanley said in a research note on Friday.

20120319 1015 Global Market Related News.

Malaysia expects the outsourcing industry to be worth RM1.9bn next year, Trade and Industry Minister Datuk Seri Mustapa Mohamed said. The Economic Transformation Programme had targeted the shared services and outsourcing (SSO) as a growth sector to contribute about RM2.4bn in incremental gross national income and create over 13,290 high-income jobs by 2020. At present, there are 130 SSO companies – from major local players to multinationals – under Multimedia Super Corridor flagship, he said.

Bank Indonesia will from 15 Jun set a minimum down payment for motor vehicle and housing loans. Banks’ loan-to-value ratio for housing loans has been set at a maximum of 70%. The minimum down payment for loans from commercial banks for motorcycles will be set at 25%, 25% for “productive” vehicles such as buses and at 30% for private auto vehicles. Indonesia's capital market regulator Bapepam will also set minimum down payments for auto loans provided by multi-finance firms, which provide loans for motor vehicles. (Bloomberg)

Indonesia’s government announced that it would most likely increase subsidized fuel prices by Rp1,500 to Rp 6,000 starting from 1 Apr. (Jakarta Post)

Vice President Boediono said Indonesia’s budget deficit in 2012 could surpass 4% of GDP if the government did not do anything in connection to the increasing price of oil. (Antara News)

Singapore’s non-domestic oil exports rose 30.5% yoy in Feb (-2.4% in Jan), higher than market expectations of a 16.2% increase. The headline figure was boosted by electronic exports, which grew 23.3% yoy in Feb (-10.9% in Jan). (Bloomberg)

Thailand’s foreign reserves fell to US$179.1bn in the week ended 9 Mar from US$180bn the previous week. (Bloomberg).

China: Chinese companies forced to falsify data. The statistics bureau said local officials forced some hotels, coal miners and aluminum makers to report false numbers, highlighting flaws in data tracking the world's second-largest economy. Statistics officials in Hejin city in northern Shanxi province gave companies "seriously untrue" numbers to submit for 2011, the Beijing-based National Bureau of Statistics said in a statement on its website dated March 12. (Source: Bloomberg)

China: Home prices post worst performance in a year on curbs

China’s February home prices posted the worst performance in a year with almost half of the cities monitored by the government falling from a year ago as the country maintained curbs on the property market. New home prices fell in 27 of 70 cities last month from a year earlier and prices were unchanged in six cities, the national statistics bureau said. That is the worst since the government began at the start of 2011 releasing individual data for 70 cities instead of a national average. Premier Wen Jiabao said last week housing prices remain far from a reasonable level and called on the government not to slacken efforts to regulate the home sector. Relaxing the curbs could cause “chaos” in the market, Wen said. China’s two-year campaign to rein in home prices has included measures such as higher down payments and mortgage rates, and home purchase restrictions in 40 cities. (Bloomberg)

China new-home prices fell on a mom basis in Feb in 45 out of 70 large and mid-sized cities tracked by the government, down from 48 in Jan. Just four cities experienced price rises. (AFP)

India: Sets modest path to trim deficit

The Indian government played it safe in unveiling its 2012/13 budget, pledging reforms but setting only modest targets for trimming a ballooning fiscal deficit, disappointing bond market investors. India's Congress party-led government has been battered by a series of setbacks that curtailed its ability to implement reforms and curb populist spending. The finance minister, Pranab Mukherjee set a fiscal deficit target of 5.1% of GDP for the fiscal year that begins in April, down from an expected 5.9% in the current year. This year's figure, however, ended up far above the 4.6% it had originally targeted in its budget a year ago. Mukherjee said he expected India's economy to grow by 7.6% in the next fiscal year, up from an expected 6.9% in the current year but below the 8.4% growth in the previous fiscal year. (StarBizWeek)

EU: Lagarde says world can’t be lulled into sense of security
International Monetary Fund Managing Director Christine Lagarde urged policy makers to be vigilant as oil prices, debt levels, and the risk of slowing growth in emerging markets threaten global economic stability. “Optimism should not give us a sense of comfort or lull us into a false sense of security,” Lagarde said at a speech in Beijing. “We cannot go back to business as usual.” The IMF last week approved a EUR28bn (USD36.6bn) loan for Greece as part of a EUR130bn second bailout by the European Union that requires more austerity and an overhaul of its economy. Greece completed the world’s largest sovereign-debt overhaul and agreed to deeper spending cuts to obtain new funds as it faces a fifth year of recession. “The measures that were proposed are ambitious and it will be important to focus on steady rigorous implementation of the situation on the ground,” Lagarde said about Greece. (Bloomberg)

UK: Will keep austerity with unemployment at 16-year high
“Britain won’t ease austerity in its budget to be presented this week, and we are going to stick with the deficit reduction plan that I set out almost two years ago,” UK Chancellor of the Exchequer George Osborne said. UK. Jobless claims rose more than economists forecast in February, and a broader measure of unemployment remained at the highest level in 16 years, according to data released 14 Mar by the Office for National Statistics in London. Keeping austerity measures in place is important “to provide the stability that the British economy needs and the low interest rates the British economy needs to allow the recovery to take hold,” Osborne added. “The plan we put in place is bringing that deficit down and borrowing is coming down, but even with that, we still have one of the highest budget deficits in the world,” he said. (Bloomberg)

Some Bank of Japan board members expressed concerned that increased bond purchases by the central bank may be viewed as financing government deficit spending and as such it was important “to clearly recognize and explain to the public” that bond purchases are not “for the purpose of monetization,” according to minutes of last month’s meeting. (Bloomberg)

Japan and 12 other Asian countries will likely agree to double the amount of funds available under a regional currency swap pact amid uncertainty over the European debt crisis, according to Japan’s Nikkei daily who cited unnamed sources. (AFP)

Japan’s final reading of the leading index stood at 94.4 (prior reading was 94.9), whilst the coincident index retreated to 93.0 from the prior 93.1. (International Business Times)

IMF chief Christine Lagarde said measures taken to fight financial woes in Europe and the US were starting to pay off, whilst China should continue to move away from its dependency on exports and investment to focus more on domestic consumption. (AFP)

Spain: Public-debt burden surged to the most in at least two decades, underlining concerns about its ability to reorder state finances as contagion from the debt crisis focuses on the euro area's fourth-biggest economy. The nation's overall debt last year amounted to 68.5%t of GDP, exceeding the government's forecast of 67.3%, data on the Bank of Spain's website showed. That compares with 66% in the third quarter and 61.2% at the end of 2010. (Source: Bloomberg)

Eurozone exports rose 11% yoy in Jan to bring the bloc's trade deficit to €7.6bn, down from €16.1bn in Jan 2011. (The Guardian)

US industrial production was unchanged in Feb (a revised 0.4% mom in Jan), falling short of consensus expectations of a 0.5% rise due to a drop in mining and flat utilities. Capacity utilisation fell marginally to 78.7% (a revised 78.8% in Jan), in line with consensus, whilst manufacturing fell to 0.3% mom (a revised 1.1% in Jan), close to median expectations of 0.5%. (Bloomberg)

US: Consumer prices rose in February as gasoline jumped

The cost of living in the US rose in February by the most in 10 months, reflecting a jump in gasoline that failed to spread to other goods and services. The consumer-price index climbed 0.4%, after increasing 0.2% the prior month, the Labor Department said. The biggest jump in gasoline in more than a year accounted for about 80% of the increase in prices last month, leaving households with less money to spend on other goods and services. Federal Reserve policy makers say the advance in fuel costs will be temporary, and most see little risk inflation will flare out of control as unemployment exceeds 8%. (Bloomberg)

U.S: Consumer sentiment dropped in March as this year's 17% jump in gasoline prices threatens to squeeze household budgets. The Thomson Reuters/University of Michigan preliminary index of consumer sentiment fell to 74.3, the lowest this year, from 75.3 the prior month. A government report showed that consumer prices rose in February by the most in 10 months, with gasoline accounting for 80% of the increase. (Source: Bloomberg)

20120319 1014 Malaysia Corporate Related News.

Nine shortlisted for Prai power project
Nine consortia and sole bidders have been shortlisted by the Energy Commission to participate in the tender process for the Prai combined-cycle gas turbine power project. The consortia comprise 1Malaysia Development, which has teamed with South Korean conglomerate Hyundai Engineering & Construction; YTL Power International with Marubeni Corp of Japan; CI Holdings and Teknologi Tenaga Perlis Consortium SB with Daelim Industrial Co Ltd of South Korea; Amcorp Power SB with Japanese group Mitsui & Co Ltd; and Malakoff Corp and Petronas Power SB with Mitsubishi Corp of Japan. (StarBizWeek)

MCMC: No memo issued on 6% prepaid tax
The Malaysian Communications and Multimedia Commission (MCMC) said it has not issued a memo to telecommunication companies instructing them to be prepared for a proposed 6% tax on prepaid phone subscribers. MCMC chairman Datuk Mohamed Sharil Tarmizi said: “No such instruction was issued on this matter.” “Discussions are actively being carried out to find the best and most equitable solution so that consumers will continue to receive affordable communications services that will benefit the people,” he said in the statement. (StarBizWeek)

Proton confident of selling 4,000 latest car per month
Proton Holdings is optimistic of achieving monthly sales of 4k units for its new model, codenamed P3-21A, group MD Datuk Seri Syed Zainal Abidin Syed Mohamed Tahir said. He said the car, scheduled to be officially launched by next month, would redeem Proton’s image as a capable manufacturer of cars and attract buyers from local and overseas markets. (StarBizWeek)

Pharmaniaga plans expansion in Mideast, South-East Asia
Malaysia’s largest homegrown pharmaceutical group, Pharmaniaga plans to expand its market in the Middle East and South-East Asia, particularly Saudi Arabia, Indonesia, Myanmar and Vietnam. Chairman Tan Sri Lodin Wok Kamaruddin said the company was looking for growth opportunities in these countries, including through M&As. (StarBizWeek)

Nadzmi resigns as Proton chairman and director
Datuk Seri Mohd Nadzmi Mohd Salleh has resigned as Proton chairman and director effective immediately due to the change in shareholdings in Proton Holdings. Nadzmi’s resignation was part of the terms that had been agreed upon when DRB-Hicom signed the conditional share sale and purchase agreement with Khazanah Nasional to sell the latter’s 42.74% stake to the former on 16 Jan. (StarBizWeek)

Esso not seeking other takeover offers
The board of Esso Malaysia is not seeking any alternative takeover offers after it received notice of an unconditional takeover offer from San Miguel Corp. SMC had on 17 Aug 2011 proposed the acquisition of 175m in Esso Malaysia, representing a 65% stake, from ExxonMobil International Holdings for RM3.59 each. (StarBizWeek)

JEV not planning to sell Jimah plant
Jimah Energy Ventures SB (JEV) is currently not looking to sell its power plant in Port Dickson, Negri Sembilan, a source said, quashing market speculation to the contrary. JEV, an independent power producer, owns and operates the 1,400MW coal-fired Jimah power plant. Speculation is rife that the plant is up for sale, with rivals reported to be interested in making a bid for it. Talk has it that a sale could fetch more than RM1bn. (BT)

US-based Hess is expected to award a contract for a FPSO vessel for the North Malay Basin development soon and plans to start production late this year. According to sources, Bumi Armada and MISC, with their respective partners, are vying head-to-head for the contract. (Edge Weekly)

Petronas Dagangan has recorded negative operating cash flow for three quarters up to 31 Dec 11. In a written reply to the newspaper, PetDag notes that a factor that affected the negative operating cash flow was the timing in receiving the subsidy from the government. (Edge Weekly)

The completion of property developments under the low deposit incentive schemes, coupled with Bank Negara Malaysia’s (BNM) changes in bank loan computations from gross to net income, may result in higher rates of defaults, according to industry observers. The incentives often referred to as 5/95, 10/90, 15/85 or 20/80 schemes, allow home buyers to pay a small down payment of 5-20% of the property price. The balance 80-95% is only due after completion of the property, and is often covered by a bank loan. Some developers, notably of luxury condominium projects, even extended the incentives to include a delayed repayment period of up to two years after the handover. (Financial Daily)

Pelikan International Corp CEO Loo Hooi Keat says the company could raise around RM360m from the sale of the group's plants and its logistic assets that are not recording adequate yields. The asset sales should be completed by 2Q12. On its rationalisation plans, the company plans to consolidate its number of plants from 13 to 4-5 globally. (Malaysian Reserve) This is not a new development. The company has already indicated its intention in the past few weeks.
Bandar Raya Developments Bhd (BRDB) has until the end of the month to say whether it is going ahead with the proposed sale of four of its properties or risk a query from the stock exchange, according to sources.
• BRDB had announced on 22 Nov, 2011 that it was postponing the tender exercise for the properties - Bangsar Shopping Centre, Menara BRDB, CapSquare Retail Centres and Permas Jusco Mall - to the first quarter of this year.
• In the November announcement, BRDB had also stated that Ambang Sehati Sdn Bhd, its second largest shareholder, could raise stake in the company, an exercise that may or may not result in a general offer. (StarBiz)

A three year time frame is being set for renewable energy (RE) activities to kick off with expected higher funding and quotas. Minister of Energy, Green Technology and Water Datuk Peter Chin said, “We would like to see a higher level of RE being generated in the future. We have to learn from the current phase before we proceed in a more aggressive manner. We are looking at about three years to see how this RE is performing especially with solar energy for which the cost of solar production is getting lower and lower.”
• He added, “Now we are restricted by the amount in the RE Fund for which we can only collect 1% from each account holder of Tenaga. If the fund is higher, the quota can be increased. That will be good for the country in terms of emission of carbon and the fact that RE is considered a cleaner source of energy.” (Star Biz)

Telekom Malaysia (TM) will consider acquisitions to bolster its capabilities to better serve its small and medium enterprise (SME) customers. Group CEO Datuk Seri Zamzamzairani Mohd Isa said TM is looking to reach out to the SMEs at a fest next month where it hopes to learn about its customer needs and see how its range of services can meet them. “We’re open to possibilities and we’re looking at a more inclusive approach. Rather than doing everything ourselves, we would like to include others as partners.”
• Among other things, TM is looking to tap into the potential of cloud computing and communicate to SMEs how its HSBB can help their businesses expand beyond home grounds. SMEs contributed 26% to TM’s retail revenue of RM7.2bn in FY11.
• TM is also looking to expand in the business process outsourcing (BPO) market. Work is already underway to set up a data centre in Hong Kong, TM’s first outside Malaysia. (Financial Daily)

Telekom Malaysia Bhd (TM) expects to spend about RM1bn on high-speed broadband (HSBB) network next year, as it is banking on it to maintain its broadband leadership. The company, which allocated some RM1.4bn in capital expenditure (capex) last year, expects slightly lower capex this year.
• The project launched in 2008 is a public-private partnership in which TM is investing RM8.9bn over 10 years while the government is coinvesting RM2.4bn. So far, the government has paid RM2.2bn.
• Starting next year, TM will self-fund the continuous rolling out of HSBB network and demand will decide the rollout. (BT)

Boustead Holdings Bhd’s plan to dispose its plantation in Sumatra will see the company focusing on increasing the yield of its plantations in Malaysia, said its deputy chairman and group managing director Tan Sri Lodin Wok Kamaruddin.
• The plantation division contributed about 40% to the company’s profit for its financial year ended Dec 31 2011 but the disposal of the Sumatra plantation will not have any impact on the profits of the plantation division. Lodin expects the price of CPO to hover in the range of RM3,300 per tonne this year. (Bernama)

The Campro charged fuel efficiency (CFE) engine, developed by Proton Holdings, is designed to meet all requirements needed in the markets that the carmaker intends to export. It took 24 months to develop the engine. Not only the engine and transmission were developed but the car designing was packaged as well. The Campro CFE engine is basically a high performance variant of Proton’s Campro engine that is capable of giving power without using larger engines. (Financial Daily)

Bintulu Port Holdings is in final talks with its major shareholders, including the Sarawak government, on the funding for the proposed Samalaju deepsea port project in Bintulu. CEO Datuk Mior Ahmad Baiti Mior Lub said discussion should wrap up in the next three months. The cost of the new port is estimated at more than RM1bn.
• Mior Ahmad said construction works for the new port on 450ha was expected to begin early next year for full completion in 2016. “We will first build interim facilities, including berth for barges which are expected to be ready by end of this year and be operational in early 2013.” (Star Biz)

Perusahaan Otomobil Kedua Sdn Bhd (Perodua) will reintroduce its used-car business, which ceased operations two years ago, by the middle of the year. Its managing director Datuk Aminar Rashid Salleh said the company is in the process of "recruiting the right people both internally and externally" to start the used-car operations to complement its new car business.
• "Profitability will not be our main driver, at least in the first phase. The used-car business is mainly to help our customers trade-in their current vehicles to help facilitate their new car purchase, And we plan to help them to get the best value for their current car," said Aminar. (The Sun Daily)

The conversion of A330 passenger aircraft into a freighter aircraft will not affect the value of new A330 freighter aircraft, says Andreas Hermann Airbus vice-president of freighters. “Historically there has always been new-build and converted freighters and these aircraft address different end-users and end-points of operations. There is no logical reason of why a new-build freighter loses in value because of a conversion programme.”
• Malaysia Airlines (MAS) cited losses at its cargo arm and the recent announcement by Airbus to develop the A330 Passenger-to-Freighter (P2F) conversion programme as reasons to make a RM314 million provision for impairment of freighter aircraft value. According to MAS, the introduction of the conversion programme for the A330 passenger aircraft had depressed the value of its newly delivered A330 freighter aircraft. (BT)

EP Manufacturing Bhd (EPMB) is expanding into the highway concession business with the acquisition of Maju Expressway Sdn Bhd (MESB), the concession owner and operator of the 26km Maju Expressway, for RM1.7bn. In a filing with Bursa Malaysia last Friday, EPMB said the acquisition will be satisfied by the issue of 38.5m new EPMB shares at RM1.30 each (worth RM50m), issue of 100m Redeemable Unsecured Loan Stock (RULS) and RM1bn cash.(The Sun Daily)

Jordone Group Bhd, which specialises in brand building, concept development, fashion designing, marketing, distribution and retailing for casual and business wears, is seeking a listing on Bursa Malaysia Main Market. JGB currently develops, manufactures and markets brands such asSnails Original, Chargers Outfitters, Snails & Sons, Jeep, Feraud, BIEM,and Budweiser.
• According to its draft prospectus submitted to the Securities Commission (SC), the group has proposed an IPO of 10.813m new shares, about 13.52% of its enlarged issued and paid-up capital. A total of 1.8m of these shares will be made available via private placement. (Starbiz)

The Selangor government has sought advice from an international legal firm in London to end the deadlock in its bid to reclaim control of the state's water industry. MB Tan Sri Abdul Khalid Ibrahim said he had a meeting with a team of senior lawyers to discuss legal avenue to find an amicable solution to the matter. (Financial Daily)

Local and foreign manufacturers of branded household appliances are expanding their range of products to meet rising domestic and international demand. Pensonic Holdings Bhd, Daewoo Electronics (M) Sdn Bhd and CT Frank Technology Sdn Bhd are among the companies that are investing to produce a new range of products this year.
• Meanwhile, the latest Business Monitor International report released last month forecast that total retail sales in the country would increase from US$57bn in 2012 to RM70.5bn in 2016, fuelled by low unemployment rate, rising disposable income and a strong tourism industry.
• Consumer electronic product sales are predicted to rise from US$11.5bn in 2012 to US$14.4bn in 2016, an increase of 25.8%, boosted by demand from the tech-literate urban middle class, and by a growing interest in electronic products from the under-penetrated areas outside the Klang Valley. (Starbiz)

Adex gained momentum last month, but the Jan-Feb adex still ended up with a contraction against the same period last year. Advertisers spent RM1.414bn on media space/airtime in the first two months of 2012, down 1.7% from a year earlier. However, media specialists IPG Mediabrands and GroupM expect spending level to improve in the coming months.
• “The timing of Chinese New Year and other holidays in Jan/Feb really slowed down the finalisation of marketing plans at the start of the year. We will start seeing some year-on-year (y-o-y) growth again from April onwards.” said GroupM Malaysia CEO Girish Menon. However, Menon cautioned against expecting a growth rate similar to last year.
• Nielsen data showed that adex jumped by 11.9% in 2011. “Particularly on TV, most clients are holding their spending at last year's levels, so we don't expect to see any growth there,” he added.
• January had seen adex shrink by 5.7% y-o-y, the first monthly contraction in three years. Ad spending began to grow again in February. Advertisers forked out RM640.9m, which was 3.4% higher than in the same month last year. (Starbiz)

Telekom Malaysia will consider acquisitions to bolster its capabilities to better serve small and medium enterprise (SME) customers. Its group CEO Datuk Zamzamzairani said TM is looking to reach out to the SMEs at a fest next month where it hopes to learn about its customer needs and see how its range of services can meet them. SMEs contribute 26% to TM's retail revenue, the second largest after the consumer segment's 34%. Retail contributes to 79% of TM's revenue. (Financial Daily)

20120319 1012 Global Market Related News.

Asian Stocks Advance for Fifth Day Ahead of U.S. Housing Data (Source: Bloomberg)
Asian stocks rose, with the regional benchmark index heading for its fifth day of advance, before the release of U.S. data this week that’s expected to show further signs of stabilization in the housing market. Samsung Electronics Co. (005930), Asia’s No. 1 consumer-electronics maker, added 0.7 percent in Seoul. GS Engineering & Construction Corp. climbed 3.9 percent on speculation the South Korean contractor may win orders from the Middle East. BHP Billiton Ltd., Australia’s biggest oil producer and the world’s largest mining company, advanced 1.4 percent in Sydney as oil futures traded near a one-week high.
“The market should continue to look fairly positive,” Stephen Halmarick, Sydney-based head of investment markets research at Colonial First State Global Asset Management, said on Bloomberg Television. His firm oversees about $150 billion. “This week will be focused on whether the world economy can continue to recover. Data has been more positive lately, with some signs of stability in Europe and better data out of the U.S.” The MSCI Asia Pacific Index gained 0.4 percent to 128.43 as of 10:27 a.m. in Tokyo. The gauge climbed 12 percent this year through March 16 as positive economic reports from the U.S. boosted the outlook for the region’s exporters.

Japan Stocks Gain as Trading Companies Climb; Utilities Drop (Source: Bloomberg)
Japanese stocks rose, with the Nikkei 225 Stock Average set for its highest close since last year’s earthquake, as trading and oil companies gained on higher crude prices. Utilities fell after Citigroup Inc. cut its outlook on the industry. Inpex Corp. (1605), Japan’s No. 1 energy explorer, rose 0.7 percent. Marubeni Corp. (8002) advanced 3 percent after a report the trading house and a Japanese fund will pay $850 million to acquire a wind-farm company. Kansai Electric Power Co., a utility, slumped 2.7 percent after Citigroup cut its rating on the stock because of uncertainty on dividend payments for next fiscal year. Separately, broadcaster NHK reported Osaka City may urge the utility to abolish nuclear reactors. “What we’re seeing is a return to more buoyant growth taking away the impact of negative growth from the nuclear crisis around this time last year,” said Tim Schroeders, who helps manage $1 billion in equities at Pengana Capital Ltd. in Melbourne.
“Very significant tailwinds are helping share prices move higher in the Japanese market.”  The Nikkei 225 Stock Average (NKY) rose 0.4 percent to 10,166.31 as of 10:08 a.m. in Tokyo, headed for the highest closing level since last year’s March 11 earthquake and tsunami. The broader Topix Index climbed 0.3 percent to 869.27, with more than twice as many stocks gaining as falling.

U.S. Stocks Advance as Fed Boosts Economic Outlook (Source: Bloomberg)
U.S. stocks rose for the fifth straight week as the Federal Reserve raised its assessment of the economy and let banks such as JPMorgan Chase & Co. (JPM) boost dividends after reviewing their financial strength. JPMorgan rallied 8.6 percent to help lead financial shares in the Standard & Poor’s 500 Index (SPX) to a 5.9 percent advance, the most among 10 industries. Bank of America Corp. (BAC) surged 22 percent. Apple Inc. (AAPL) increased 7.4 percent and topped $600 for the first time during the week as the company started selling its new iPad. Alcoa Inc. (AA) and General Electric Co. (GE) rose more than 6 percent after the Fed said the economic outlook has improved and strains on global markets have eased.
“The main theme for this week has been positive economic numbers,” Chad Morganlander, a Florham Park, New Jersey-based money manager at Stifel Nicolaus & Co., which oversees more than $116 billion in client assets, said in a telephone interview. For banks, “a major overhang for them has been alleviated due to the successful stress tests.” Stocks gained after the central bank said on March 13 that the economic outlook has improved as the labor market gathers strength. Claims for jobless benefits matched the lowest level in four years, according to Labor Department data released two days later. The Fed also said 15 of the 19 largest banks would maintain adequate capital levels in a severe recession even if they kept paying dividends and buying back stock.

Europe Stocks Post Weekly Gain on Global Economic Outlook (Source: Bloomberg)
European stocks posted their biggest weekly rally since early February as reports from the U.S. to Germany indicated growth is gaining pace and the Federal Reserve raised its assessment of the world’s biggest economy. Shares of insurance (SXIP) companies and banks led the advance, with Aegon NV (AGN) and Credit Suisse Group AG jumping at least 11 percent each. Pirelli & C. SpA (PC), Europe’s third-largest tiremaker, soared 15 percent as profit beat analysts’ estimates. The Stoxx 600 Europe Index climbed 2.6 percent to 272.40 during the week. The measure has rallied 11 percent this year on optimism that the euro area will contain the sovereign-debt crisis and as U.S. economic reports beat forecasts. “The U.S. economy is a very, very strong support for the market,” said Pierre Mouton, a fund manager who helps oversee $7.5 billion at Notz Stucki & Cie. in Geneva. “The data is confirming that the economy really is rebounding, and more rapidly than expected. We’ve turned the page.”

Home Sales Probably Increased in February: U.S. Economy Preview (Source: Bloomberg)
Home purchases in the U.S. probably climbed in February to the highest level in almost two years, another sign of stabilization in the real-estate market, economists said reports this week will show. Combined sales of new and previously owned properties rose to 4.93 million at an annual rate, the strongest since May 2010, from 4.89 million in January, according to the median forecasts in a Bloomberg News survey. Home construction also improved as warmer weather bolstered prospects for the industry, another report may show. Job and income gains, cheaper homes and the lowest mortgage rates on record have combined to push affordability to an all- time high. With fewer new dwellings on the market, residential construction may be poised to contribute more to economic growth this year.
“The evidence is very clear that housing is beginning to improve,” said Russell Price, a senior economist at Ameriprise Financial Inc. in Detroit. “I do not expect housing to be a drag on GDP this year. It started to be a modest positive contributor last year. Now that it’s actually contributing again, that’s a significant turn of events.”

Euro Rises (Source: Bloomberg)
The euro touched a 4 1/2-month high against the yen as German Chancellor Angela Merkel said European officials have discussed combining euro-area bailout funds to reinforce the region’s financial firewall. Demand for the 17-nation euro was also supported before Italian Prime Minister Mario Monti holds talks with unions and employers to revise labor laws this week. The yen traded near an 11-month low versus the dollar as Asian stocks extended a four- day rally from last week, damping demand for haven assets. Federal Reserve Bank of New York President William C. Dudley speaks today at Melville, New York. “There’s no doubt the market would very much like to see the two bailout funds combined,” said Sean Callow, a senior currency strategist in Sydney at Westpac Banking Corp. (WBC) “Anything that increases the firepower will be well received. It’s certainly one of the positives for the euro.”
The euro touched 110.15 yen, the highest since Oct. 31, before trading at 109.91 at 10:02 a.m. in Tokyo, little changed from 109.95 on March 16 in New York. The common currency bought $1.3170 from $1.3175 on March 16, when it rose 0.7 percent. The yen fell to 83.47 per dollar from 83.43. Japan’s currency on March 15 touched 84.18 per dollar, the weakest since April 13.

Treasuries Post Biggest Weekly Decline in Eight Months on Growth (Source: Bloomberg)
Treasury (YCGT0025) 10-year notes declined the most in eight months after the Federal Reserve drove investors into riskier assets and reduced speculation of further debt purchases by increasing its assessment of the U.S. economy. Yields on the benchmark note rose to the highest level in more than four months yesterday as a report showing the cost of living rose in February added to concern inflation may accelerate as the recovery strengthens. The difference in yields between 10-year notes and Treasury Inflation Protected Securities climbed to 2.41 percentage points, the most since August, as the U.S. prepared to sell $13 billion of the securities on March 22. “The bear market has begun,” said James Combias, the New York-based head of Treasury trading at Mizuho Securities USA Inc., one of 21 primary dealers that trade with the central bank. “The world has been parked out in the bond market.”
The 10-year yield rose 27 basis points, or 0.27 percentage point on the week, to 2.30 percent in New York, according to Bloomberg Bond Trader prices. The increase was the most since yields rose 32 basis points in the five days ended July 1. The 2 percent note due February 2022 dropped 2 11/32, or $23.44 per $1,000 face amount, to 97 12/32.

Treasuries Decline on Speculation U.S. Home Purchases Inc (Source: Bloomberg)
Treasury 10-year notes fell for a ninth day before a U.S. report this week that economists said will show home purchases climbed in February to the highest level in almost two years. The difference between yields on 10-year notes and Treasury Inflation Protected Securities, a gauge of trader expectations for consumer prices over the life of the debt, widened to 2.42 percentage points today, the most since August. Ten-year Treasury yields rose two basis points, or 0.02 percentage point, to 2.31 percent at 9:45 a.m. in Tokyo, according to Bloomberg Bond Trader prices. The 2 percent debt due February 2022 declined 5/32, or $1.56 per $1,000 face amount, to 97 7/32. Rates climbed 27 basis points last week. “The increase in Treasury yields is a recognition that the economy is in better shape,” said Peter Jolly, head of market research at National Australia Bank Ltd. (NAB) in Sydney.

Japan’s Echo Boomers Giving a Lift to Housing: Mortgages (Source: Bloomberg)
Japan’s shrinking economy is poised to get a lift from the children of baby boomers taking out their first mortgages with rates close to a three-year low. As many as 19.1 million people, or 15 percent of the Japanese population, are in the 35 to 39 and 40 to 44 year-old age groups, the second- and third-largest, government data show. Combined, the two groups are roughly double the size of the postwar baby boom generation now in their early 60s, according to the Ministry of Internal Affairs and Communications. “Japan is in a demographic sweet spot,” said Jesper Koll, head of equity research at JPMorgan Chase & Co. “Children of baby boomers are now at their late 30s and early 40s. That is where the demand is going to be coming from.”
So-called echo baby boomers reaching the age to purchase their first home will give a boost to a housing market that accounts for about 15 percent of Japan’s gross domestic product at a time when the nation is struggling to recover from last year’s earthquake, some companies are suffering from worse-than- expected earnings results, pushing up the unemployment rate. The Bank of Japan has maintained rates near zero for 17 years, benefiting home buyers, who are enjoying one of the lowest financing costs in the world.

Monti to Meet Labor Unions Amid Warning of Continued Euro Crisis (Source: Bloomberg)
Italy’s Prime Minister Mario Monti will press ahead with efforts to revise labor laws this week, amid fresh warnings that the three-year-old European debt crisis is far from over. Monti will lead talks with unions and employers in a final round of negotiations beginning tomorrow. Decision makers meanwhile warned against complacency after delivery of the final element of Greece’s 130 billion-euro ($171 billion) bailout package and the completion of the world’s largest sovereign-debt restructuring last week. “Optimism should not give us a sense of comfort or lull us into a false sense of security,” International Monetary Fund Managing Director Christine Lagarde said in a speech at the China Development Forum in Beijing yesterday. “We cannot go back to business as usual,” she said, urging vigilance on oil prices, debt levels, and the risk of slowing growth in emerging markets.
An easing of the crisis offered breathing room for Monti to seek an Italian labor-market overhaul and for euro-area ministers aiming to bolster euro bailout funding before a meeting at the end of the month. Still, urgency was underscored by an IMF warning that the Greek bailout held “exceptional risks” that could prompt a “disorderly” exit from the monetary union unless additional help is prepared.

Britain Will Keep Austerity With Unemployment at 16-Year (Source: Bloomberg)
Britain won’t ease austerity in its budget to be presented this week, U.K. Chancellor of the Exchequer George Osborne said in an interview to be aired today on CNN’s “Fareed Zakaria GPS” program. “We are going to stick with the deficit reduction plan that I set out almost two years ago,” Osborne said, according to a transcript of the interview. U.K. jobless claims rose more than economists forecast in February, and a broader measure of unemployment remained at the highest level in 16 years, according to data released March 14 by the Office for National Statistics in London. Keeping austerity measures in place is important “to provide the stability that the British economy needs and the low interest rates the British economy needs to allow the recovery to take hold,” Osborne said.

Lagarde Says World Can’t Be Lulled Into Sense of Security (Source: Bloomberg)
International Monetary Fund Managing Director Christine Lagarde urged policy makers to be vigilant as oil prices, debt levels, and the risk of slowing growth in emerging markets threaten global economic stability. “Optimism should not give us a sense of comfort or lull us into a false sense of security,” Lagarde said today at a speech in Beijing at the China Development Forum. “We cannot go back to business as usual.” The IMF last week approved a 28 billion-euro ($36.6 billion) loan for Greece as part of a 130 billion euro second bailout by the European Union that requires more austerity and an overhaul of its economy. Greece completed the world’s largest sovereign-debt overhaul and agreed to deeper spending cuts to obtain new funds as it faces a fifth year of recession. “The measures that were proposed are ambitious and it will be important to focus on steady rigorous implementation of the situation on the ground,” Lagarde said about Greece. “We have made important steps forward.”

Greece Auction to Settle $3.2 Billion of Credit-Default Swaps (Source: Bloomberg)
Credit-default swaps dealers will hold an auction today to settle as much as $3.2 billion of Greek bond insurance triggered by the nation’s debt restructuring. The auction will be held under the rules of the International Swaps & Derivatives Association and will determine the amount that sellers of protection must pay by setting a recovery price for Greek bonds. An initial rate will be set at 11 a.m. London time with a final value determined at 3:30 p.m. Greek credit-default swaps are being settled after investors were forced to exchange their bonds at a loss in the biggest ever debt restructuring. The auction ends more than two years of speculation over whether the derivatives are viable for insuring sovereign debt after European policy makers sought to prevent payouts on concern they’d worsen the region’s crisis.
“Triggering CDS might have more positive than negative implications for European government bond markets,” said Ioannis Sokos, a fixed-income strategist at BNP Paribas SA in London. “It’s a clear demonstration that there is a functioning hedging tool out there for holders of other peripheral bonds.”

Germany’s $270 Billion Renewables Shift Biggest Since War (Source: Bloomberg)
Not since the allies leveled Germany in World War II has Europe’s biggest economy undertaken a reconstruction of its energy market on this scale. Chancellor Angela Merkel is planning to build offshore wind farms that will cover an area six times the size of New York City and erect power lines that could stretch from London to Baghdad. The program will cost 200 billion euros ($268 billion), a third of annual gross domestic product, according to the DIW economic institute in Berlin. Germany aims to replace 17 nuclear reactors supplying a fifth of its electricity with renewables such as solar and wind. Merkel to succeed must experiment with untested systems and policies and overcome technical hurdles threatening the project, said Stephan Reimelt, chief executive officer of General Electric Co. (GE)’s energy unit in the country.
“Germany is like a big energy laboratory,” Reimelt said in an interview. “The country has a political and societal consensus to drop nuclear power but lacks a clear technological solution.”

Iran Central Bank Says Rial Can Be Traded at Market Rates (Source: Bloomberg)
Iran’s central bank allowed trading in its currency at market levels after fixing the exchange rate in January as the threat of sanctions over the country’s nuclear program and economic risks spurred Iranians to buy up dollars. “Licensed exchange houses are given permission to buy and sell foreign currencies and answer customers’ needs based on the mechanism of the market’s supply and demand,” the Iranian central bank said in a statement posted on its website. The bank on Jan. 26 fixed the rate at 12,260 after the U.S. dollar surged to almost double that level in unofficial currency markets as Iranians concerned over the economy rushed to buy. Citizens’ demand for foreign currency had to be met by banks or licensed exchange houses selling dollars at the official rate, marking an 8.5 percent devaluation, after the decision.
The easing of restrictions follows a meeting with central bank officials and representatives of the Association for Exchanges of Iran, according to the statement. Minou Kianirad, the bank’s deputy governor for foreign-currency affairs, wasn’t available to comment when a call was made to her office.

Latin American Nations in Worse Shape for Crisis, IDB Says (Source: Bloomberg)
Most Latin American nations, in the event of another global crisis, are in worse shape to implement stimulus than in 2007 as a result of lower budget surpluses before interest payments, the Inter-American Development Bank said. Mexico, Chile, Colombia and the Dominican Republic are among nations less prepared to face a potential crisis, the IDB said in a report released at the bank’s annual meetings in Montevideo, Uruguay, today. Brazil and Argentina are in positions similar to those in 2007, while Uruguay and Jamaica are better prepared, the Washington-based lender said. “The main reason for the deterioration is the widespread reduction in structural primary balances,” the report said. While so-called primary surpluses have eroded, balance sheets across the region are stronger and financial supervision has improved, making many economies more resilient, the report said. Latin American economies will grow on average 3.6 percent this year after averaging 5.4 percent the past two years, the IDB said.

Cambodia Embracing Capitalism With First IPO Since Khmer Rouge (Source: Bloomberg)
Min Sovannry wasn’t born when the Communist Khmer Rouge took power in 1975 and abolished Cambodia’s money, markets and financial system. Now the 21-year- old college student can’t wait to embrace capitalism. One of thousands of Cambodians who have attended more than 200 stock-trading seminars in Phnom Penh, Min said she plans to invest as much as one-third of the $300 monthly salary she expects to earn next year in the country’s stock exchange, which is scheduled to begin trading its first shares April 18. “I’m very excited,” Min said in an interview. “I’m happy to have this market because it’s a chance for me to make money from buying stocks instead of putting it in the bank.”
Enthusiasm about the start of trading at the exchange, which opened last July without a single listed company, extends beyond the borders of the Southeast Asian country. Investors including Templeton Emerging Markets Group Chairman Mark Mobius said they plan to participate in Cambodia’s stock market after state-owned Phnom Penh Water Supply Authority has its initial public offering next month. “The potential for investors in Cambodia is excellent,” Mobius, who oversees about $50 billion, wrote in an e-mail. “The listing of publicly traded stocks will drive up interest and demand. If a country can list its state-owned enterprises and list enough stocks so that foreign investors can get involved, then it can be very, very good.”

India Finance Minister Says Expects Interest Rates to Come Down (Source: Bloomberg)
Finance Minister Pranab Mukherjee said he expects India’s central bank to reduce interest rates, helping revive sentiment after economic growth slowed. “I expect policy rates to be reversed by the central bank in coming months,” Mukherjee said at a conference in New Delhi today. “That should improve sentiment.”
The minister said in his March 16 federal budget that India’s economic expansion may revive to as much as 7.85 percent in the fiscal year starting April 1 and that inflation will ease. At the same time, he acknowledged yesterday that his decision to increase the service and excise taxes to 12 percent from 10 percent may spur some price pressures. The Reserve Bank of India signaled before the budget that better control of the nation’s fiscal deficit would boost scope to lower borrowing costs, which are at the highest level since 2008, at 8.5 percent. The RBI raised the repurchase rate by a record 3.75 percentage points from 2010 to October last year to fight price increases, with February’s 6.95 percent inflation rate holding close to a 26-month low.

India Deficit Above 5% for Second Year Limits Rate-Cut Room (Source: Bloomberg)
The Reserve Bank of India’s scope for a series of interest-rate cuts to bolster a slowing economy may be hampered by inflation risks from a budget deficit projected to exceed 5 percent for a second year. Benchmark bonds capped their biggest weekly decline in seven as Finance Minister Pranab Mukherjee unveiled an annual budget yesterday that will require record borrowings of 5.69 trillion rupees ($113 billion) to finance a gap estimated at 5.1 percent of gross domestic product. The deficit for the year through March 31 is projected at 5.9 percent, wider than the 4.6 percent target set in 2011. Mukherjee, who proposed a cap on subsidies and raised service and excise taxes, said today the higher levies could spur price gains. Borrowing costs at the highest level since 2008 to fight inflation, policy gridlock and slumping investment contributed to a slowdown in growth to 6.1 percent last quarter, the weakest pace since 2009.
“The RBI said that it was waiting for the budget to crystallize on the timing and magnitude of rate cuts,” said Killol Pandya, the Mumbai-based head of fixed-income investment at the local unit of Daiwa Asset Management Co. “This budget does not give any comfort. It raises concern of the RBI pushing back its timelines regarding rate cuts.”

20120319 1012 Global Commodities Related News.

Speculators Dumped Crop Wagers Before Biggest Rally: Commodities (Source: Bloomberg)
Speculators slashed wagers on higher agricultural prices by the most in eight weeks, missing out on this year’s biggest rally as parched fields from South America to Europe curbed expectations for record harvests. Money managers trimmed positions across 11 U.S. farm goods by 2.5 percent to 661,067 futures and options in the week ended March 13, Commodity Futures Trading Commission data show, the biggest reduction since Jan. 17. Bets on sugar fell the most since November before prices posted their biggest weekly gain in five months. Funds also became more bearish on wheat, which jumped to its highest in almost two weeks.
The Standard & Poor’s GSCI Agriculture Spot Index (SPGSAG) rose 3.5 percent last week, the most since December, as drought damaged soy, corn and sugar crops across Brazil and Argentina and slowed wheat shipments from eastern Europe and Russia. World food costs had dropped about 11 percent from a record in the past year on prospects for the most grain supply ever, before rallying in January and February, United Nations data show. “There are some issues with crop production,” said Jeffrey Sherman, who helps manage about $30 billion of assets for DoubleLine Capital in Los Angeles. “The weather is very, very dry in the southern hemisphere. The opportunity now is in agriculture.”

MF Global Trustee Seeks More Payments (Source: CME)
The trustee overseeing the liquidation of MF Global Holdings Ltd.'s brokerage Thursday proposed additional payments to commodities clients of the failed broker-dealer, including the first to those with accounts frozen on non-U.S. exchanges. The trustee asked the bankruptcy judge overseeing MF Global to approve a further distribution of up to $685 million, adding about 10 cents on the dollar to the 72 cents already recovered by U.S. customers who held funds on deposit. James Giddens, the trustee unwinding MF Global's U.S. brokerage business, has recovered about $5.3 billion of the $5.5 billion to $6 billion in U.S. customers' segregated funds held at the brokerage. To date, he has returned about $3.9 billion to customers via a series of bulk transfers arranged by CME Group Inc. in the weeks following MF Global's demise last year.
The latest request includes around $600 million held as segregated assets for clients trading on U.S. exchanges and another $50 million to so-called 30.7 customers related to U.S. customers trading overseas. An additional $35 million of customer property is earmarked to a domestic delivery class, which Giddens identified as physical customer property that has been or will be reduced to cash. "As the estate has continued to mature, the trustee made a determination that an additional distribution was warranted," said Giddens's spokesman, Kent Jarrell. The approximately $700 million in additional distributions will cut in half the $1.4 billion reserve Giddens initially had set aside for U.S. commodities customers. The trustee is required to maintain funds in reserve because a number of MF Global overseas customers--including those in U.K. and Hong Kong--could have valid claims against the U.S. brokerage.
Indeed, KPMG, which is MF Global's U.K. insolvency administrator, have filed some $257 million in claims against the U.S. estate related to foreign commodities customers' positions and another $92.5 million involving foreign-exchange transactions. Although those affiliate claims have been lumped in with the estimated $5.5 billion to $6 billion MF Global was to have segregated for U.S. customers, no distribution has been made. "We haven't paid U.K. entity a penny," Jarrell said. Representatives for MF Global's U.K. insolvency administrator and the Chapter 11 trustee declined to comment. An estimated $1.6 billion in client assets remain out of reach, with some money missing and other funds held up by proceedings in other countries.
"If [the trustee] doesn't recover anymore, the shortfall is probably going to be right in the range of the high 80s or perhaps the low 90s [in cents on the dollar], in terms of recovery," said Vince Lazar, a partner with law firm Jenner & Block, which is representing CME in the bankruptcy proceedings. Lazar was speaking Wednesday at a futures industry conference in Florida. In all, about 25,000 commodities customers have filed claims with the trustee. The unaccounted-for funds include $900 million linked to U.S. commodity-trading accounts as well $700 million tied to foreign-based accounts, believed to be in the U.K. Distressed investors have been offering some MF Global U.S. customers up to 90 cents on the dollar for their so-called 4d claims, betting Giddens can boost their recoveries by clawing back assets from MF Global's U.K. estate and others while fending off claims from his rivals, which include MF Global's U.K. administrators and the holding company's Chapter 11 trustee, Louis Freeh.
Still, Giddens faces serious challenges in getting back the remaining funds. Although he recently said he traced a majority of the transactions made by MF Global during its final week in October, he noted recovering the cash could prove difficult and will take time. MF Global collapsed Oct. 31, 2011, revealing the gap in client money the firm was supposed to have safeguarded under U.S. commodity-market law. Regulators and investigators have yet to provide a full explanation for the shortfall or where the money wound up. Giddens is winding down MF Global's broker-dealer business under the authority of the Securities Investor Protection Act, which governs the liquidation of failed brokerage firms.

CFTC Targets Rapid Trades (Source: CME)
A top U.S. regulator said his agency plans to widen day-to-day monitoring of the commodities and futures markets, targeting the high-speed trading firms that are a growing force. Instead of just policing completed futures trades, the Commodity Futures Trading Commission will seek to watch the fleeting buy and sell orders that increasingly influence the market, CFTC Chairman Gary Gensler said in an interview. The move follows a Securities and Exchange Commission plan to sharpen oversight of stock trades following the 2010 "flash crash." Regulators are seeking to catch up with high-frequency trading firms that are responsible for roughly half of orders, the vast majority of which are never executed. The SEC is probing the close relationship between high-speed firms and the computerized exchanges they do business with. Regulators are ramping up oversight of high-frequency trading, which some fear could disrupt or distort financial markets with aggressive, rapid-fire trading strategies.
Some more traditional institutional trading firms worry uncompleted orders are sometimes used to manipulate markets by making it appear there is more interest in buying or selling a contract than there is in reality. The futures regulator expects to acquire and implement a computer system soon that can download and track all orders, including those that aren't executed, although not in real time, Gensler said during the interview, at a futures-industry conference here. The shift is in part due to new technology and software that can store and sift through the huge daily downloads of data, he said. The SEC's initial plan to track trades in real time was estimated to cost billions of dollars, but neither the SEC nor the CFTC have provided cost estimates for the systems they are currently planning. The new tracking systems, which aren't expected to be implemented this year, will "give us a more detailed view of who owns and controls accounts," he said.
The CFTC will ask the financial industry this spring or summer about how the agency should approach regulating automated trading. The CFTC is preparing for a major change in the trading of derivatives contracts mandated by the Dodd-Frank financial-overhaul law. Currently, most trading of derivatives contracts takes place over phones between human traders. Certain provisions of Dodd-Frank mandate that some derivatives trade on exchanges, but the exact rules and timing haven't been determined yet. Some high-speed firms welcome the increased scrutiny. "We all depend on having market integrity," said Richard Gorelick, chief executive of RGM Advisors, an Austin, Texas, high-frequency trading operation. "We all need to know that the rules are fair and that they're enforced accordingly."
An estimated 80 to 90 orders are put into futures markets for every trade that actually happens, according to Gensler, and experts say about 90% of all orders on stock exchanges are canceled. The SEC is weighing whether to put a fee on orders that high-speed firms place and later cancel. For now, the CFTC doesn't have a cancellation fee, but a new group in the commission will consider the issue, which many exchanges and high-frequency firms oppose. Some futures exchanges are already moving to curb excessive orders. IntercontinentalExchange Inc. (ICE), where benchmark contracts for cotton and sugar and a prominent U.S. dollar index are traded, said in late February that a policy it implemented last year is having success at curtailing what the exchange called "inefficient and excessive" bids and offers.
ICE penalizes traders who submit orders far off the market price--a tactic that can be used by high-frequency traders and others to give other market participants the impression prices are poised to change rapidly. Meanwhile, the CFTC plans to hold the first meeting of a high-frequency trading advisory panel on March 29. High-frequency trading is "taking an even larger role in our market, a bigger impact," said Scott O'Malia, the CFTC commissioner who is spearheading the push. "You can't ignore a trading style that occupies 40% of our market on any given day," he said. About 50 to 60 trading firms and exchanges have applied for membership with the roughly 25-member high-frequency subcommittee, including CME Group Inc. (CME), which operates the largest futures exchange in the U.S. O'Malia said a decision about who would make up the subcommittee hadn't yet been made. The subcommittee will weigh a definition of high-frequency trading to better regulate it, among other matters.
It also will probe the relationships between futures markets and the stock market. On May 6, 2010, massive sales of futures contracts tied to stocks helped trigger the flash crash, the SEC said in a report.

Corn (Source: CME)
US corn futures end higher, supported by optimism about Chinese demand. Chinese corn prices set a record high overnight, fueling hopes the country will import US product. More support comes from follow-through buying, building on gains from Thursday and recent weeks as traders hesitate to bet against the upward trend before a weekend. Tight near-term supplies also lend support. Already-tight cash markets were firmer in areas including the eastern corn belt and southeastern feed markets, says Tregg Cronin, market analyst at Country Hedging. CBOT May corn ends up 4c or 0.6% at $6.73 a bushel.

Wheat (Source: CME)
US wheat futures end higher, boosted by a rise in corn prices and by concerns that the U.S. winter wheat crop coming out of dormancy early due to warm weather will need proper weather conditions. Risks could come from frost damage if temperatures cool or from insufficient moisture. Trading is choppy and possibly marked by short-covering. CBOT May wheat rises 7 1/4c or 1.1% to $6.72 a bushel, while KCBT May wheat rises 1c to $7.05 1/2 and MGEX May wheat rises 2 1/2c to $8.22 3/4.

Rice (Source: CME)
US rice futures settle at a one-month high. Rice futures advanced for the second straight day, fueled by a pickup in export sales and reduced acreage expectations for the coming year, analysts say. Strength in other grains and oilseeds were also as a reason to buy, analysts add. CBOT May rice ended up 21 1/2c at $14.53 1/2/hundredweight.

U.S. corn bears smell blood in Sept future
-- Gavin Maguire is a Reuters market analyst. The views expressed are his own. --
CHICAGO, March 16 (Reuters) - Spring-like conditions across the U.S. Midwest have raised expectations for an early corn planting season in 2012, which in turn should lead to an earlier harvest than usual in the fall.  
While the December contract still officially represents the 'new crop' expected at harvest, should farmers be able to crank up corn plantings over the coming weeks a large amount of fresh grain supplies should become available by September, making that contract month the more likely candidate for pronounced downside pressure in the fall.

US soy at 6-month top, China's corn hits record-high
SINGAPORE, March 16 (Reuters) - Chicago soybeans climbed to a six-month top rising for a fourth straight session with support from better-than-expected U.S. exports on strong Chinese demand and lower supplies from drought-hit South America.
"Soybeans have firmed as China has been importing quite a lot and there have been some concerns that demand for soybeans could switch acreage from corn," said Lynette Tan, an analyst with Phillip Futures in Singapore.

Warm U.S. winter could spur corn, tree-killing beetles
WASHINGTON, March 15 (Reuters) - As much of the United States basks in summer-like temperatures, weather and climate experts said this year's warm winter could mean early corn planting, a risk of killing frost for apricots and a baby boom for tree-chomping bark beetles in the West.
The winter of 2011-12 was the fourth-warmest in the 117-year record, according to the National Oceanic and Atmospheric Administration, which uses meteorological winter, which ended on Feb. 29. Astronomical winter runs until early March 20, when spring arrives at 1:14 a.m. EDT.

US flood risk low but droughts could continue-NOAA
March 15 (Reuters) - No area of the United States faces a high risk of major flooding this spring for the first time in four years, but continuing drought across the southern and western parts of the country could lead to wildfires, U.S. government forecasters said on Thursday.
The National Oceanic and Atmospheric Administration said in its spring outlook that low winter precipitation means few parts of the United States face above-normal flood risks.

EU wheat exports to grow only little by 2017-analyst
PARIS, March 15 (Reuters) - European Union wheat exports will benefit little from rising world demand over the next five years, with EU shipments to be curbed by growing use of cereals in biofuels, limited production gains and competition from Black Sea exporters, an analyst said.
Soft wheat output in the 27-country EU could rise by 5 million tonnes by 2017, Strategie Grains said in a presentation on Thursday, arguing growth would be capped by demand for arable land for oilseeds and declining yield gains for wheat in western countries like France.

Kazakhstan sees booming grain exports, new terminal
AKTAU, Kazakhstan, March 15 (Reuters) - Kazakhstan, a top-10 world wheat exporter, still hopes to export around 15 million tonnes of grain in the current marketing year and plans to build a new terminal on the Caspian to boost  exports by sea, officials said on Thursday.
A giant steppe nation five times the size of France and with a population of just 16.7 million, Kazakhstan more than doubled its grain harvest to 27 million tonnes last year, its biggest since independence in 1991.

India cold seen delaying wheat harvesting in key areas
CHANDIGARH, India, March 15 (Reuters) - Prolonged winter weather and recent rainfall may delay wheat harvesting by at least a week in India's key grain producing northern states of Punjab and Haryana, officials and farmers said on Thursday.
Harvesting in Punjab and Haryana, the country's recond and third biggest producers of wheat, usually begins from April 1 in normal weather conditions.

Vietnam may take top rice exporter title from Thailand
HANOI, March 15 (Reuters) - Vietnam may snatch the title of world's top rice exporter from Thailand this year, saying it aims to match last year's record shipments of 7.2 million tonnes helped by strong demand and a positive outlook for domestic production.
In contrast, Thailand, which has been the world's biggest exporter for three decades, looks set to see exports fall sharply to 7 million tonnes at most due to high prices caused by government intervention to support millions of poor farmers.

Mexico Sees El Nino Bringing Drought Relief (Source: CME)
Mexico is expecting El Nino to bring much-needed rains to various agricultural parts of the country in the near future, providing relief from prolonged widespread drought, the country's Agriculture Minister Francisco Mayorga said Thursday. "We don't know exactly how much or when, but La Nina will pass and that will help improve the situation," he said, noting that weather typical of El Nino is already replacing La Nina climate conditions in some agricultural areas of t he country. La Nina has caused unusually dry weather throughout the country's territory over the past year, leading to the deaths of thousands of livestock and more than a million hectares of crops, especially grains. Mayorga said rainfall in some of the worst-affected states last month in combination with federal resources has already helped productivity return to its normal pace in some areas.
"Production is being re-established," he said, adding that producers with irrigation in northern Mexico have ramped up the production of pasture, used for livestock feed, to offset losses. Mayorga said the fall-winter harvest is expected to yield 30% more corn, and as a result imports of white corn, which reached an unusually high level last year of 1.4 million tons, are expected to drop to 1 million tons.

Corn, Soybeans Rally to Six-Month Highs as China Demand Outlook (Source: Bloomberg)
Corn and soybeans extended rallies to the highest prices since September on speculation that China may boost purchases from the U.S., the biggest producer of both crops. Jilin Corn Center Wholesale Market reported yesterday that government purchases of domestic grain have plunged this year to 1.2 million metric tons from 11 million a year earlier, a sign of tighter supplies in China that will lead to a jump in imports. On the Dalian Commodity Exchange, corn futures jumped to a record today. Soybean imports may rise more than 20 percent in the first half of 2012, said March 12. “The rising markets are a reflection of traders expecting increased Chinese purchases from the U.S.,” Jerry Gidel, the chief feed analyst at Chicago-based Rice Dairy LLC, said in a telephone interview. “Rising meat demand is driving Chinese consumption of feed.”
Corn futures for May delivery rose 0.6 percent to close at $6.73 a bushel at 1:15 p.m. in Chicago, after touching $6.7375, the highest price since Sept. 22. The grain rallied 4.3 percent this week, the largest gain since the end of January.

Wheat, Corn, Soybean Futures Rally on Chicago Board of Trade (Source: Bloomberg)
Wheat, corn and soybean futures rallied on the Chicago Board of Trade. Wheat futures for May delivery advanced 0.7 percent to $6.695 a bushel at 9:45 a.m. in Chicago, after touching $6.73, the highest since March 5. Corn futures for May delivery rose 0.4 percent to $6.715 a bushel on the CBOT, heading for the biggest weekly gain since January. Earlier, the contract touched $6.7375, the highest since Sept. 22. Soybean futures for May delivery gained 0.2 percent to $13.7175 a bushel in Chicago, after touching $13.775, the highest since Sept. 15.

U.S. Corn, Wheat Planting to Rise, Soy Will Fall, Allendale Says (Source: Bloomberg)
U.S. farmers will plant more corn and fewer acres of soybeans than the government forecast last month, according to a survey of growers by Allendale Inc. Wheat planting will rise for a second consecutive year, it said. Farmers indicated they will sow 95.012 million acres with corn, Allendale said today in an e-mailed release. That’s up from last year’s 91.921 million acres and above the 94 million that the U.S. Department of Agriculture forecast on Feb. 24. Soybean plantings will slip to 74.495 million acres from 74.976 million last year, according to Allendale’s 23rd annual survey of farmers. The USDA said last month that 75 million acres would be sown this year. The combined area planted with all wheat varieties will rise to 56.609 million acres, according to the survey by Allendale, a farm-market adviser and brokerage based in McHenry, Illinois. Last month, the USDA said farmers would sow 58 million acres.

Wheat Drops as Canada Output May Increase; Soybeans Fall (Source: Bloomberg)
Wheat futures fell on speculation that Canada will boost output amid rising stockpiles that are expected to reach the highest in 12 years. Soybeans also fell. Canadian farmers will plant 10 percent more wheat this year, Agriculture & Agri-Food Canada said yesterday. The area seeded with the grain will rise to 7.84 million hectares (19.4 million acres) and total production may rise 3.3 percent, the government said. Global stockpiles may reach 209.6 million metric tons this year, the highest since 2000, U.S. government data show. “The only commodity that could be challenged this year is wheat with its important surplus,” said Jonathan Bouchet, a trader at Boman Capital SA in Geneva. “Weather issues in South America might push the grain complex to the upside for some weeks,” with wheat being the laggard, he said.
Wheat for May delivery declined 0.5 percent to $6.615 a bushel by 10:07 a.m. London time after yesterday surging as much as 3.7 percent. Futures are set for a 2.9 percent gain this week. Milling wheat on NYSE Liffe in Paris gained 0.6 percent to 215.50 euros ($281.30) a metric ton.

Flood Risks Drop But US Drought To Persist (Source: CME)
Most of the continental U.S. is at little risk of flooding this spring, while the southern part of the country is expected to remain mired in drought, the National Oceanic and Atmospheric Administration said Thursday. "We're not forecasting a repeat of recent historic and prolonged flooding in the central and northern U.S., and that is a relief," said Laura Furgione, deputy director of NOAA's National Weather Service. "The severity of any flooding this year will be driven by rainfall more so than the melting of the current snowpack." Extreme flooding from heavy snowfall last winter delayed plantings of crops from corn to sugarbeets across the Midwestern U.S., sending prices higher. A drier spring would be a relief for farmers, particularly in the northern Great Plains, after they endured widespread flooding last year that kept them from sowing hundreds of thousands of acres of farmland. But the federal forecast is bittersweet for other U.S. farmers who are gearing up for planting season.
Although it isn't expected to be as severe as last year, drought in the southern U.S. will likely continue through the end of June and could spread, NOAA said. "Recent rainfall has helped lessen the drought in eastern Oklahoma, northeast Texas and interior Louisiana, but the historic magnitude of this prolonged drought means that recovery will be slow," said David Brown, director of NOAA's Southern Region Climate Services. "Drought is now encompassing parts of the West and Southwest, making conditions more favorable for wildfires." The dry weather could hurt cotton production. The U.S. Department of Agriculture already is forecasting a 13% decline in output in the year ending July 31, at 15.7 million bales. Drought likely will continue in West Texas and Georgia, which together produce more than one-third of U.S. cotton. Drought last year ravaged cotton production in Texas, which produced its smallest crop since 1998.
If the drought continues, it is bullish for cotton futures, said Andy Ryan, a senior analyst at INTL FCStone. The new "crop's going to be planted April, May, June." Cotton futures are down about 4% since the start of the year because of concerns about a glut of supply on slow demand. The parched conditions in the southern Plains over the last 18 months also have forced ranchers in states like Texas and Oklahoma to liquidate hundreds of thousands of beef cattle. The enduring drought conditions continue to delay any efforts to rebuild herds, a process that likely will take at least three years, if not longer. Nearly 70% of Texas--the largest cattle-producing state in the nation--remains in severe drought or worse, according to federal data. NOAA said the southwest is at risk for wildfires.

Iran food stockpiling grows as grain ships near port
LONDON/HAMBURG, March 15 (Reuters) - Vessels carrying at least 360,000 tonnes of grain are lined up to unload in Iran, Reuters shipping data showed on Thursday, a sign that Tehran is succeeding in stockpiling food to blunt the impact of tougher Western sanctions.
Iran has been shopping for wheat at a frantic pace, ordering  a large part of its expected yearly requirement in a little over one month and paying a premium in non-dollar currencies to work around toughened Western sanctions and avoid social unrest.

Indonesia may decide on rice imports by June -Bulog
JAKARTA, March 15 (Reuters) - Indonesia should  decide on how much rice it will import by June, as that is when the government will have  a clear idea about the size of the domestic crop, the head of the state rice procurement agency Bulog said on Thursday.
Last year, Southeast Asia's largest economy imported 1.9 million tonnes of rice from Thailand, Vietnam and India, to ensure  it had plentiful stocks of the staple food, and to avoid stoking food inflation.

Brazil new CS sugar output seen up 9 pct - Datagro
SAO PAULO, March 15 (Reuters) - Sugar output from Brazil's new 2012/13 center-south cane crop  was forecast at 33.88 million tonnes, up 9 percent from 31.2 million tonnes in the current crop, crop analysts Datagro said on Thursday in their first estimate of the upcoming harvest.
Datagro President Plinio Nastari said Brazil's main growing region will produce 518.3 million tonnes of cane this coming April-March season, up from the 493 million tonnes crushed from this season's drought-hit center-south crop.

Rwanda sees coffee harvest up 50 pct in 2012
KIGALI, March 15 (Reuters) - Rwanda's coffee output could rise by 50 percent this year due to a bumper harvest after good rains late last year, and the small but fertile central African country is eyeing newer outlets for its high quality, speciality coffee.
Rwanda, a much smaller producer compared to its neighbour and Africa's top exporter Uganda, grows high quality, Arabica coffee beans much of which is exported mainly to the United States, Europe, Japan and South Korea.

Brazil 2012-13 Sugarcane Crop Seen At 518M Tons (Source: CME)
Brazil's key center-south region will likely see a modest recovery in its sugarcane crop during the coming 2012-13 season, as last year's problems related to pests, frost and flowering aren't expected to occur, sugar and ethanol consultancy Datagro said Thursday. The region, which produces nearly 90% of Brazil's sugarcane, should crush 518.3 million metric tons of the crop during the harvest that starts in April and runs through November. That forecast represents an increase of about 5.1% from the previous year. While the sector's main structural problem--insufficient renewal of sugarcane fields in recent years--remains largely unresolved, there's plenty of room for improvement over last year's disappointing sugarcane crop, Datagro President Plinio Nastari said in a press conference. In 2011, center-south sugarcane output fell for the first time in a decade amid a high incidence of pests, a series of rare winter frosts that damaged fields, and widespread flowering that reduced plants' sugar content.
"Everything indicates that flowering won't occur this year," Nastari said, noting the phenomenon is triggered by weather conditions early in the year. Datagro expects mills in center-south Brazil to churn out 33.88 million tons of sugar in the 2012-13 season, up 8.6% year-over-year. Production of ethanol fuel is seen rising 5.9% to 21.8 billion liters. Datagro expects northern and northeastern Brazil to post similar numbers to its 2011-12 crop, crushing 68 million tons of sugarcane. Mills in that region are expected to produce 4.9 million tons of sugar and 2.15 billion liters of ethanol fuel. Nastari said Brazil as a whole should export 26.35 million tons of sugar and 1.8 billion liters of ethanol fuel in 2012-13.

Oil Rises a Second Day in New York Trading; Brent Little Changed (Source: Bloomberg)
Oil for April delivery rose as much as 42 cents, or 0.4 percent, to $107.48 a barrel in electronic trading on the New York Mercantile Exchange. It was at $107.47 at 12:16 p.m. Sydney time. The contract, which expires tomorrow, climbed 1.9 percent to $107.06 a barrel on March 16, the highest close since March 9. The more active May future rose 37 cents today to $107.95 a barrel. Brent oil for May settlement was at $126 a barrel, up 19 cents, on the London-based ICE Futures Europe exchange.

Obama nears dropping IEA fig leaf for oil release
(Robert Campbell is a Reuters market analyst. The views expressed are his own)
NEW YORK, March 15 (Reuters) - U.S. President Barack Obama, itching to pull the trigger on a fresh release from the strategic oil reserves to quell surging fuel prices, is getting closer to plunging into the market without backup from other Western nations.
Opposition to a fresh use of strategic oil stocks has come from European members of the International Energy Agency, threatening to slow any stock release.

Brent crude rebounds above $123 on Iran-West tensions
SINGAPORE, March 16 (Reuters) - Brent crude rebounded above $123 after a sharp sell-off in the previous session, as rising tensions between Iran and the West fuelled an oil rally that has forced Western leaders to prepare a release of their strategic oil reserves.
"We think that prices probably will continue to grind higher as we get closer to the sanctions deadline," said Jeremy Friesen, commodity strategist at Societe Generale in Hong Kong

Italy auto fuel demand dropped sharply in Feb
MILAN, March 15 (Reuters) - Consumption of refined oil products in Italy dropped 10.7 percent in February to 5.1 million tonnes, the sharpest fall since April 2009, driven by plunging demand for auto fuel and new cars, industry group Unione Petrolifera (UP) said.
Petrol consumption fell 20.3 percent year-on-year to 558,000 tonnes last month, while diesel for road vehicles dropped 15 percent to 1.71 million tonnes, UP said in a statement on Thursday.

U.S., UK set to agree emergency oil stocks release
LONDON, March 15 (Reuters) - Britain is poised to cooperate with the United States on a release of strategic oil stocks that is expected within months, two British sources said, in a bid to prevent fuel prices choking economic growth in a U.S. election year.  
A formal request from the United States to the UK to join forces in a release of oil from government-controlled reserves is expected "shortly" following a meeting on Wednesday in Washington between President Barack Obama and Prime Minister David Cameron, who discussed the issue, one source said.

China eyes tech breakthoughs, increased shale gas output
BEIJING, March 16 (Reuters) - China hopes to make breakthroughs in shale gas technologies in coming years to support large scale production later this decade, as it strives for a higher share of gas consumption in China's energy mix.
The country aims produce 6.5 billion cubic metres of shale gas by 2015, or roughly 6 percent of China's current total gas production, but it intends to dramatically boost output to 60 to 100 bcm in 2020, the National Energy Administration (NEA) said on Friday.

Gold and Silver Futures Advance, Rebounding From Weekly Decline (Source: Bloomberg)
Gold for April delivery climbed as much as 0.3 percent to $1,660 an ounce on the Comex in New York, and traded at $1,659.40 an ounce by 6:02 a.m. Singapore time. The metal dropped 3.3 percent last week. Cash metal was little changed at $1,659.40 an ounce. May-delivery silver was little changed at $32.565 an ounce, after declining 4.7 percent last week, the worst weekly performance this year. Spot metal was also little changed at $32.56 an ounce.

India Raises Gold-Import Tax for Second Time; Prices Drop (Source: Bloomberg)
India, the world’s biggest bullion buyer, increased the tax on gold imports for the second time this year after record purchases widened the current-account deficit. Gold fell. The government will tax gold bars and coins and platinum at 4 percent, Pranab Mukherjee, finance minister, said in his budget speech for the year starting April 1. That’s up from 2 percent set in January. There was no change on the silver tax. India doubled the tax on gold and silver on Jan. 17 by imposing a levy on imports as a percentage of the price, compared with the previous system of tax by weight. Global bullion prices rallied for an 11th year in 2011 as purchases by India peaked at 969 metric tons. Futures in India gained 32 percent last year, exceeding the 10 percent advance in global prices, as the currency slumped to a record low.
“The Indian market will wait for lower prices and there is also the risk that this duty hike will lead to increased smuggling,” Edel Tully, an analyst at UBS AG in London, said by e-mail today, in response to questions from Bloomberg News. “Today’s duty increase will dampen Indian demand.”