Thursday, April 5, 2012

20120405 1808 FCPO EOD Daily Chart Study.

FCPO closed : 3558, changed : 1 points, volume : higher.
Bollinger band reading : pullback correction upside biased.
MACD Histogram : rising higher, buyer in control.
Support : 3550, 3500, 3470, 3450 level.
Resistance : 3620, 3650, 3700, 3720 level.
Comment :
FCPO closed 1 tcik higher with soaring volume participation. Soy oil price currently trading firmer after overnight closed little higher while crude oil price rebounding little higher after overnight fall.
Europe crisis renewed concern development and lower palm oil inventories anticipation resulted FCPO to trade between gains and losses.
Technical reading remained calling a pullback correction upside biased market development.
When to buy : buy at support or weakness with larger cut loss and profit target.
When to sell : sell at resistant or strength with quick cut loss and profit target.

20120405 1754 FKLI EOD Daily Chart Study.

FKLI closed : 1590 changed : -1.5 point, volume : higher.
Bollinger band reading : pullback correction upside biased.
MACD Histogram : falling lower, buyer closing position as seller battling.
Support : 1590, 1580, 1570, 1565 level.
Resistance : 1595, 1600, 1610, 1620 level.
Comment :
FKLI closed little lower with improving volume exchanged doing 3.5 points discount compare to cash market that ended weaker. Overnight U.S. markets closed weaker and today Asia markets ended mostly lower while European markets swing between gains and losses.
Sentiment turned negative on renew concern over Europe debt crisis as Spain face difficulties to sell bonds and markets awaits U.S. jobless claims data.
Daily chart study remained calling a pullback correction upside biased market development with MACD indicator having negative crossed down.
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.

20120405 1706 Regional Markets EOD Daily Chart Study.

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

20120405 1629 Global Market & Commodities Related News.

Asian Stocks Erase Losses as China Opens to More Foreign Money
2012-04-05 06:06:57.137 GMT
By Yoshiaki Nohara
April 5 (Bloomberg) -- Asian stocks erased losses as Chinese developers advanced after the government said it will more than double the amount foreigners can invest in the country’s equities. Shares fell earlier on renewed concern Europe won’t be able to contain its debt crisis.
Soho China Ltd. rose 3.2 percent, leading gains among mainland property companies. NHN Corp., operator of South Korea’s largest Internet search engine, gained 8.1 percent on speculation its mobile-advertising business will boost earnings. Hutchison Whampoa Ltd. and other companies that do business in Europe slid after demand fell at a Spanish auction, sparking.
The MSCI Asia Pacific Index erased losses, trading little changed at 125.40 as of 3:03 p.m. in Tokyo after losing as much as 1.2 percent.
“Expectations for China’s additional easing are causing short-covering,” said Yutaka Miura, a senior technical analyst at Mizuho Securities Co. “It’s not that a real solution has been brought to Europe’s crisis. That’s why Spain’s debt sale is reviving concern.”

Shares fall as Europe debt worry stings risk appetite
TOKYO, April 5 (Reuters) - Asian shares fell after a weak Spanish bond sale heightened concerns about funding difficulties or weaker euro zone countries, further undermining sentiment hurt by fading expectations of more stimulus from the U.S. Federal Reserve.
"More policy support from the ECB in the near-term appears unlikely, following the hawkish slant in tone during its press conference," said Barclays Capital analysts. "Widening peripheral European government bond spreads, higher Treasuries, higher implied vol, a lower EUR and a stronger USD are reminiscent of past episodes of elevated European concern."

FOREX-Euro nurses losses after sell-off, still vulnerable
TOKYO, April 5 (Reuters) - The euro hovered within shouting distance of a three-week trough on the yen and the dollar on Thursday after a poor Spanish bond auction reignited jitters about the euro zone debt crisis, while commodity currencies were a shade stronger after a sell-off.
The euro and risk currencies have been under pressure against the dollar, which climbed broadly after Fed policy meeting minutes released on Tuesday showed the central bank was becoming less eager to print more money to bolster the economy.

US farmers resist temptation to rush corn planting
CHICAGO, April 4 (Reuters) - Many U.S. farmers are waiting for crop insurance coverage to kick in before getting too aggressive in planting corn early, resisting the temptation presented by record warm temperatures this spring, a top agronomist said on Wednesday.
"Monday's numbers from USDA certainly showed 'some' early planting but the dam has not broken yet.

Wheat ticks up after losses, market eyes crop-weather
SINGAPORE, April 5 (Reuters) - Chicago wheat edged higher as the market took a breather following an almost 3 percent fall in the last session, triggered by crop-friendly weather in the United States and Europe.
"Follow-up rain is expected for France over the Easter weekend and rains are also forecast for Germany and Britain," said Luke Mathews, commodities strategist at Commonwealth Bank of Australia in Sydney in a report.

Argentine soy, corn outlooks stable - exchange
BUENOS AIRES, April 4 (Reuters) - A leading Argentine grains exchange kept its forecasts unchanged for that country's 2011/12 corn and soy crops on Wednesday but warned that later-planted soybeans were at risk from early frosts that could crimp yields.
The Buenos Aires Grains Exchange held its estimate for soy production in the world's No. 3 exporter at 45 million tonnes and also left its forecast for the corn crop at 20.8 million tonnes.

Informa cuts Brazil, Argentina soy crop estimates
CHICAGO, April 4 (Reuters) - Private analytical firm Informa Economics lowered its forecasts for the 2011/12 soybean harvests in Brazil and Argentina and projected a year-on-year rise in U.S. 2012/13 winter wheat production, trade sources said on Wednesday.
Informa lowered its forecast of Brazil's soybean crop to 66.5 million tonnes, from its previous estimate of 68 million.

Russia grain export from reserves seen 0.5-1 mln T
MOSCOW, April 4 (Reuters) - Russia may export between 0.5 million and 1 million tonnes of grain from state inventories over an unspecified period of time, and wheat will account for over half, according to a government source, two traders and two analysts.
State intervention sales, which started on Wednesday, are envisaged at 2 million tonnes of grain from the Agriculture Ministry's 7 million tonnes of reserves.

India to build 2.5 mln bales cotton reserves
MUMBAI, April 4 (Reuters) - India has decided to build cotton reserves of 2.5 million bales of 170 kg each to meet the needs of the domestic textile industry, a government statement said on Wednesday.
State-run Cotton Corporation of India (CCI) has been directed to intervene in the market to ensure stability of prices, the statement said.

Brent rises near $123; eyes U.S. jobs report
SINGAPORE, April 5 (Reuters) - Brent crude rose towards $123 a barrel after falling sharply in the previous session on a big jump in U.S. oil inventories, as investors covered short positions ahead of a key U.S. economic report.
"There is some short covering after yesterday's big fall, and economic data is also helping," said Ken Hasegawa, a commodities derivatives manager at Newedge brokerage in Tokyo. "Trading will be quiet with everyone waiting for the U.S. employment data on Friday."

Indonesia weighs mine export tax to curb output boom
JAKARTA/PERTH, April 4 (Reuters) - Indonesia is considering a hefty tax on mining exports to stop miners from overexploiting resources to beat a 2014 ban on shipments of some unprocessed metals and lower grade coal, an official said on Wednesday, but the plan may backfire if foreign buyers turn elsewhere.
The proposal to impose a 25 percent export tax on coal and base metals - rising to 50 percent in 2013 - was greeted with a mix of confusion and scepticism as both producers and importers across Asia tried to assess its impact.

London copper gains, Shanghai cuts losses after data
SINGAPORE, April 5 (Reuters) - London copper rose, regaining ground after its biggest fall in nearly two months in the prior session, aided by data showing a sustained growth in top consumer China's services sector which also helped Shanghai prices come off session lows.
"I think last night's selloff was at least overdone," said Judy Zhu, commodity analyst at Standard Chartered Bank in Shanghai.

Gold rebounds; dashed easing hopes, euro weigh
SINGAPORE, April 5 (Reuters) - Gold edged up after two straight days of deep losses, but investors remain wary of gold's fortune after the U.S. central bank dashed hopes for more monetary stimulus, while a weakened euro also weighs on sentiment.
"The world in 2011 was all about QE (quantitative easing) and more potential QE. Now the environment is a little different - the U.S. economy is back on better footing and needs less central bank help," said Dominic Schnider, head of commodity research at UBS Wealth Management in Singapore.

Oil trader Hall stays long, not worried about SPR
April 4 (Reuters) - Veteran oil trader Andy Hall said he is betting that a release of emergency oil stockpiles by consumer nations will not provide any lasting relief to high prices, with OPEC spare capacity reduced to a "wafer thin" margin by year-end.3
Although his $5 billion Astenbeck Capital Management LLC fund trimmed its exposure to commodity markets in March after a run-up in prices earlier in the year, Hall remains confidently bullish and may add to his positions if prices fall much further, he said in a letter to investors this week.

METALS-London copper gains, Shanghai cuts losses after data
SINGAPORE, April 5 (Reuters) - London copper rose on Thursday, regaining ground after its biggest fall in nearly two months in the prior session, aided by data showing a sustained growth in top consumer China's services sector which also helped Shanghai prices come off session lows.
Wednesday's 3-percent slide in London copper provided buying opportunity for China, where markets reopened after a three-day holiday.

PRECIOUS-Gold rebounds; dashed easing hopes, euro weigh
SINGAPORE, April 5 (Reuters) - Gold edged up on Thursday after two straight days of deep losses, but investors remain wary of gold's fortune after the U.S. central bank dashed hopes for more monetary stimulus, while a weakened euro also weighs on sentiment.
Bullion lost more than 3 percent over the past two days after the U.S. Federal Reserve released minutes from its last policy meeting which showed policy makers were less inclined to launch more monetary stimulus as the economic outlook gradually improves.

20120405 1128 Global Market & Commodities Related News.

GLOBAL MARKETS-Shares fall as Europe debt worry stings risk appetite
TOKYO, April 5 (Reuters) - Asian shares fell on Thursday after a weak Spanish bond sale heightened concerns about funding difficulties by lower-rated euro zone countries, further undermining sentiment hurt by fading expectations for more stimulus from the U.S. Federal Reserve.
"More policy support from the ECB in the near term appears unlikely, following the hawkish slant in tone during its press conference. Widening peripheral European government bond spreads, higher Treasuries, higher implied vol, a lower EUR and a stronger USD are reminiscent of past episodes of elevated European concern," they wrote in a note to clients.

COMMODITIES-Prices dive as stimulus hopes fade; stockpiles hit oil
NEW YORK, April 4 (Reuters) - Commodities fell across the board on Wednesday, with a surge in U.S. crude stockpiles pressuring oil and as investors worried about the demand outlook for raw materials if there is no U.S. monetary stimulus this year.
"What we're seeing this morning is the aftermath of the release of the Fed minutes tempering hopes of a QE for now, pushing the dollar stronger and oil down," said Olivier Jakob at energy consultants Petromatrix.  

OIL-Oil falls as U.S. stockpiles hit 9-month high
NEW YORK, April 4 (Reuters) - Oil fell for a second straight day Wednesday, ending about 2 percent lower after testing key technical support levels as U.S. government data showed crude stockpiles in the world's top consumer jumped last week to a nine-month high.
"The report is solidly bearish with the decisive factor being the crude oil build and rise in imports," said John Kilduff, partner at Again Capital LLC in New York.

Physical oil market plenty at odds with pricey Brent
LONDON, April 4 (Reuters) - Europe's oil futures market and its physical crude markets paint widely divergent views on oil.  
Brent oil futures  have remained stubbornly high around $122 to $126 per barrel, even while Saudi Arabia's oil minister, Ali al-Naimi, has repeatedly assured the market there are ample supplies.

NATURAL GAS-US natgas futures end down 2 pct, storage weighs
NEW YORK, April 4 (Reuters) - U.S. natural gas futures ended lower on Wednesday, nearly wiping out gains scored earlier in the week as expectations for a bearish inventory build on Thursday outweighed extended forecasts for cooler weather that should boost demand.
"My overall view remains biased to the bearish side. The surplus is still building in inventory versus both last year and the five year average and is going to get harder and harder to work off," Energy Management Institute's Dominick Chirichella said, adding he does not expect a sustained trend change soon.

EURO COAL-Prices fall with oil, gas markets
LONDON, April 4 (Reuters) - European physical coal prices fell along with other energy markets on Wednesday, but coal's slide also reflected its oversupply and poor demand in Europe.

20120405 1017 Local & Global Economy Related News.

The Inland Revenue Board (IRB) aims to collect RM110bn in taxes this year (RM109.7bn in 2011). CEO Datuk Dr Mohd Shukor Mahfar said every year about 50% of the tax receipts come from companies, 25% from petroleum, 17% from individuals and the rest from other forms of taxes. He said news of Petronas' plan to lower its annual dividend to the government was of no worry to the IRB as revenue would come from new oil exploration areas. The IRB was also targeting 2.8m taxpayers, who would be e-filers this year, from the 2.5m who used the e-filing system last year. "We will also be putting our suggestion for mandatory e-filing in this country," he said. Individual taxpayers who choose to submit their forms via e-filing will now have up to 15 May to do so, he added. Previously, the deadline was on 30 Apr. (BT)

The Job Outlook Index, as measured by, registered 55 pts in 1Q12 (49 pts in 4Q11). A higher index means that the industries are creating jobs and employment, while a lower index means the reverse with lesser jobs on offer. In 1Q12, some 43% of the survey respondents felt that the general job outlook would be slightly or much better in the next 12 months (31% in 4Q11), 29% said the outlook would remain the same while the balance 28% felt it could be slightly or much worse. (BT, Starbiz)

Philippines: March inflation unexpectedly eases to 30-month low
Philippine inflation unexpectedly slowed to a 30-month low in March as gains in transport costs eased, supporting the central bank‟s decision to cut interest rates twice in the first quarter. Consumer prices rose 2.6% from a year earlier, after a 2.7% advance in February, the National Statistics Office said yesterday. Inflation may accelerate in the coming months after the government approved an increase in minimum fares for jeepneys, a common form of public transport, and as wage boards study petitions to raise the minimum pay. (Bloomberg)

The Philippine government spent PP134.7bn in Jan to pay its debts, 7% higher than the PP125.8bn paid in the same month last year. (Philippine Daily Inquirer)

Certificate of Entitlement (COE) prices for cars continued to rise across the board in Singapore. The open category saw the biggest increase - up S$4,489 to S$84,590. (Channel News Asia)

Indonesia expects to finish this year the revision of the negative-investment list in a bid to allow more FDI flowing into several key sectors, including the telecommunication, pharmaceutical and health care, and education sectors. (Jakarta Post)

Indonesia’s consumer confidence index weakened to a nine-month low of 107.3, though an index of above 100 means consumers in general are still optimistic. (Reuters)

With Indonesia’s new state budget approving less electricity subsidies, state power company PT Perusahaan Listrik Negara (PLN) says it may reduce the consumption of oil-based fuels to cut spending, which could lead to blackouts. PLN’s oil-based fuel consumption, previously expected to reach 7.5m kiloliters this year, might be cut to 6m kiloliters. (Jakarta Post)

Indonesia has canceled plans to raise the price of compressed natural gas (CNG) to Rp4,100/litre, from Rp3,100/litre (US$0.33) currently. (Jakarta Post)

Deputy Energy and Mineral Resources Minister suggested Wednesday that Indonesia’s state-owned oil and gas firm PT Pertamina should sell RON 90 gasoline to prevent excessive fuel-subsidy disbursement. (Jakarta Post)

Thai Prime Minister Yingluck Shinawatra said Thailand is winning back the confidence of foreign investors after last year's devastating floods, which submerged a main industrial belt and disrupted supply chains across the world. (WSJ)

Vietnam’s export value of garments and textiles reached US$1.15bn in Mar, making them the country's largest export earners with US$3.23bn in total earnings in 1Q12, the General Statistics Office reported. (Vietnam News)

Vietnam Prime Minister Nguyen Tan Dung said he is stepping up plans to revamp the Communist-led country's bloated state sector that have led to a series of debilitating credit-rating downgrades and pressured Vietnam's fragile currency. (WSJ)

The US is to begin easing sanctions on Myanmar following the weekend by election victory by opposition leader Aung San Suu Kyi and her allies, starting with a relaxation on travel by Myanmar officials and on financial transactions and investment. (FT)

India: Services PMI falls, bolstering case for cut in rates
Indian services grew at the slowest pace in five months in March, bolstering the case for a cut in interest rates to support economic expansion. The Purchasing Managers‟ Index fell to 52.3 from 56.5 in February, HSBC Holdings Plc and Markit Economics said yesterday. A reading above 50 indicates expansion. The report follows a decline in the manufacturing PMI for March that signaled slower Indian factory-output growth as the highest borrowing costs since 2008 sap domestic demand and the debt crisis in Europe crimps exports. The Reserve Bank of India is juggling the need to shield growth with inflation risks from a weaker rupee, rising energy costs and government spending. (Bloomberg)

China: Speeds opening as QFII quota increased to USD80bn
China accelerated the opening of its capital markets by more than doubling the amount foreigners can invest in stocks, bonds and bank deposits as the government shifts its growth model to domestic consumption from exports. The China Securities Regulatory Commission increased the quotas for qualified foreign institutional investors to USD80bn from USD30bn, according to a statement on its website yesterday. Offshore investors will also be allowed to pump an extra 50bn yuan (USD7.95bn) of local currency into the country, up from 20bn yuan. China has pledged this year to free up control of the yuan and liberalize interest rates as the government deepens reforms to revive growth and offset slowing exports and a cooling housing market. (Bloomberg)

Australia: Export slump intensifies rate-cut pressure
Australia unexpectedly posted back-to-back trade deficits as coal and metal exports slumped, sending the currency lower and intensifying pressure on the central bank to resume cutting interest rates. Imports outpaced exports by AUD480m in February, from a revised AUD971m deficit a month earlier, the first consecutive shortfalls in two years, a Bureau of Statistics report showed yesterday. The data boost the case for Reserve Bank of Australia Governor Glenn Stevens to lower rates at the 1 May policy meeting because overseas shipments account for about a quarter of gross domestic product. (Bloomberg)

UK: House prices surge most in almost three years
U.K. house prices rose the most in almost three years in March, boosted by demand from first-time buyers before the expiry of a tax holiday on some home purchases, Halifax said. Prices jumped 2.2% from February to an average GBP163,803 (USD260,300), the mortgage unit of Lloyds Banking Group Plc said in a statement in London yesterday. That‟s the biggest monthly increase since May 2009. From a year earlier, values were up 0.8%. (Bloomberg)

Eurozone retail sales fell 0.1% mom in Feb (a revised +1.1% in Jan), matching economists’ median forecast. On a yoy basis, the measure fell 2.1%, worse than economists’ projections for a 1.2% fall. (BBC)

The final reading of the Eurozone composite PMI came in at 49.1 in Mar, up from 48.7 estimated initially (49.3 in Feb), whilst the services PMI was revised up to 49.2 from 48.7 initially estimated (48.8 in Feb). (BBC)

EU: ECB keeps rate at 1% as economy shrinks, German price risks
The European Central Bank left interest rates unchanged as policy makers balance the threat of inflation in Germany against the need to fight the sovereign debt crisis. ECB officials meeting in Frankfurt yesterday kept the benchmark rate at a record low of 1%. While nations from Greece to Spain are battling recessions and record unemployment, workers in Germany are winning some of the biggest pay increases in 20 years, widening the gaps between Europe‟s largest economy and its euro-area peers. (Bloomberg)

The IMF approved a €5.17bn loan instalment for Portugal after "good progress" in the country's economic program. This approval is part of a three-year €27.6bn loan program. (AFP)

Wall Street down on stimulus doubt, Spain debt sale
US stocks fell for a second day on Wednesday as investors contemplated a world without monetary stimulus and a poorly received bond auction in Spain suggested the effects of Europe‟s funding operations were waning. Spanish borrowing costs jumped at bond auctions, raising concerns that the rally in the troubled sovereign debt of euro-zone peripheral nations may be coming to an end. The yield on Spain‟s 10-year bond leaped to 5.7%, its highest since January. Stocks continued to feel the fallout from the minutes from the Federal Reserve‟s latest meeting, published on Tuesday. The DJIA fell 124.80 pts, or 0.95%, to 13,074.15. The S&P 500 Index lost 14.42 pts, or 1.02%, to 1,398.96. The Nasdaq Composite Index dropped 45.48 pts, or 1.46%, to 3,068.09. (Financial Daily)

US Treasury Secretary Timothy Geithner repeated the Obama administration's view that the eurozone has enough resources to resolve its public debt crisis. He added that the US was far behind on reforming the country’s housing finance system, whilst the biggest threats to the economy would come from the fallout from the European debt crisis and higher oil prices. (AFP)

The US ISM non-manufacturing index fell to 56 in Mar (57.3 in Feb), still topping the average for the previous economic expansion ending Dec 2007 of 55.3. Economists expected a fall to 56.8. (Bloomberg)

US: Service industries kept expanding in March
Service industries in the U.S. grew in March, capping the strongest quarter in a year and indicating the world‟s largest economy will keep generating jobs. The Institute for Supply Management‟s non-manufacturing index fell to 56 from a one-year high of 57.3 in February, the Tempe, Arizona-based group‟s data showed yesterday. Last month‟s reading still topped the average for the previous economic expansion. Another report showed companies added an estimated 209,000 workers to payrolls in March. Sales at businesses like restaurants and retailers are climbing as an improving labor market shores up household incomes and confidence in the face of more expensive gasoline. (Bloomberg)

The number of jobs in the US non-farm private business sector increased by a seasonally-adjusted 209,000 in Mar, down from a revised 230,000 in Feb, payrolls firm ADP said. This fell short of analysts’ estimate of 217,000. In 1Q12, monthly employment gains averaged 207,000 jobs, compared with 156,000 for all of 2011. (AFP)

20120405 1016 Malaysia Corporate Related News.

Axiata to stay put in India
The Axiata Group will stay put in the Indian mobile market but is hoping to operate in a more stable regulatory environment. The Indian Government‟s recent revocation of 122 of the 2G licences issued in 2008 had created uncertainty and angered some foreign investors, some of whom have threatened to withdraw from the market place and to even sue the government. However, Axiata president and group chief executive officer Datuk Seri Jamaludin Ibrahim said, “we want more of a stronger foothold there.” (StarBiz)

MSC up despite worries over Indonesia’s tax hike plan
The share price of Malaysia Smelting Corp (MSC) was not affected by the news that the Indonesian government may increase the export tax on coal and base metals this year. The firmness in the share price could be supported by a report by Bloomberg yesterday that said Indonesia was not formally discussing a suggestion from the industry ministry to tax exports of coal and minerals, according to government and industry officials. (StarBiz)

AMMB gets nod to buy Kurnia
The proposed sale of Kurnia Insurans (M) to AmG Insurance takes another step forward. AMMB Holdings announced yesterday that it had received the Finance Ministry‟s approval, through Bank Negara, for the acquisition of a 100% equity interest in Kurnia Insurans by AmG. AMMB has a 51% stake in AmG, while Kurnia Insurans is wholly owned by Kurnia Asia. (StarBiz) Please see accompanying report

Maybank pushing for top 5 ranking in Cambodia
To further strengthen its regional footprint, Malayan Banking (Maybank) recently incorporated its branch in Cambodia and aims to be among the top five banks in Cambodia by 2015. It is currently ranked seventh in terms or assets among 33 banks, and has 11 branches in Cambodia. Since establishing its presence in Cambodia in 1993, Maybank announced that it will be investing in a new 10-storey corporate office in Phnom Penh which is expected to be ready in two years. “Maybank Cambodia had been growing at a healthy pace with assets and deposits doubling in the last four years since its branch expansion got underway,” said president and chief executive officer Datuk Seri Abdul Wahid Omar. (Malaysian Reserve)

Pharmaniaga to set up plant in Indonesia
Pharmaniaga has set side RM30m to build a manufacturing plant in Indonesia which the company hopes will act as a “gateway for exports” into the republic of almost 240m people. The funding is to come from internally generated funds. According to the company, it is now in discussions with a few parties and has yet to decide on the purchase target. (Malaysian Reserve)

Perisai's MD Izzet Ishak has exercised an option granted to him by Ezra to acquire 66m Perisai shares from the company. It is not disclosed when the shares will change hands. (BMSB)

Proton Holdings’s all-new sedan and maiden global car is called PREVE (pronounced Prae-Vae) and costs RM540m to develop. The PREVE has a price tag of RM62,000 for an entry level unit with manual transmission, and RM75,000 for the high line version with automatic transmission. In between, there is a medium line version that may be sold for less than RM70,000. Proton managing director Datuk Seri Syed Zainal Abidin Syed Mohamed Tahir is optimistic of monthly sales of 4,000 to 4,500 units of the PREVE. Proton plans to export the PREVE to Asean countries three months after its local debut, before shipping it to Australia, the Middle East and China, among others. (BT)

The unconditional takeover offer by DRB-HICOM to acquire all the remaining shares in Proton at RM5.50 each in cash will close at 5pm on April 25. DRB-HICOM's shareholders approved the company's proposed acquisition of 42.74% stake in Proton from Khazanah Nasional on March 15. (Starbiz)

Malaysian Airlines’ (MAS) decision to use fuel hedging as a financial instrument to protect the airline from fuel price hike risks is in accordance with the Group Treasury Policy approved by the MAS board of directors, Datuk Seri Najib Razak said. The fuel hedging mechanism was also adopted by other airlines. The losses incurred, however, were only in the form of paper loss and not MAS’ real losses due to the adoption of FRS139. (Bernama)

Idea Cellular may have to write-off Rs 17k crore (US$3.3bn) if the government decides to change the frequencies it uses to offer services upon expiry of its licence, a company official today said. Telecom Regulatory Authority of India has proposed to shift existing telecom players providing their services in 800 and 900 Mhz bands to some other frequency band after expiry of their telecom licences. In India, 2G services are being provided through 800, 900 and 1800 Mhz frequency bands. "If subscribers are shifted from 900 Mhz, Rs 17k crore (US$3.3bn) will have to be written off for one year by Idea," an Idea Cellular representative said at the Trai's Open House Discussion on 'Auction of Spectrum'. He added that 500m customers are being serviced by 800 and 900 Mhz bands. In the draft national telecom policy, the government has proposed refarming of spectrum in 800 and 900 Mhz bands and it may ask telecom operators to surrender spectrum in these bands so that the same can be redistributed for high-end services. Some leading service providers like Bharti Airtel, Idea Cellular and Vodafone have spectrum in these bands. The industry is divided over refarming of spectrum with old operators against it, while new operators have favoured the move. (IndiaTimes)

Previously split between the Malaysian Iron and Steel Industry Federation (MISIF) and Malaysia Steel Association (MSA), players in the country’s steel industry are joining forces to seek the government’s aid to regulate the mechanism on imported steel into Malaysia. MISIF president Chow Chong Long said both MISIF and MSA want the government to consider strengthening its policy on steel imports for export, the license manufacturing warehouses status, zero import duty of foreign finished products and steel grades not locally produced in Malaysia. (Star Biz)

Petronas’s Engen unit, the biggest South African importer of Iranian crude, said it has suspended imports of oil from the Middle Eastern nation amid economic sanctions by the US and the European Union. The company has contingency supplies in place. (Bloomberg)

Tradewinds Corp Bhd has followed the precedence set by DRB-Hicom Bhd in swapping its Malay reserve land in Langkawi Island with comparable non-Malay reserve land on the mainland at a conversion rate of RM5 psf. The proposed exercise will see the status of 43.6 acres under Tradewinds in Langkawi to be converted to non-Malay reserve status. The swap is to enhance the value of the land as it allows non-Malays to acquire properties developed on these parcels. (Financial Daily)

KPJ Healthcare’s profitability may be affected if the proposed new healthcare system (1Care) for Malaysians imposes a standardised fee schedule, said RAM Ratings. At present, the healthcare industry and KPJ are subject to regulatory controls, although this may evolve over time. KPJ remained exposed to persistent cost increases such as higher staff salaries and more expensive medical supplies and pharmaceuticals. (Star Biz)

Xchanging has signed a 50:50 joint venture agreement with YTL Communications Sdn Bhd to develop and deliver enhanced mobile internet and cloud-based hosting offerings in Malaysia. The JV will combine Xchanging’s technology, delivering expertise and international domain knowledge with YTL Communications’ award-winning 4G network and market reach to deliver next-generation mission-critical cloud solutions and platforms. (Bernama)

US-based Air Products and Chemicals Inc is growing its business in Malaysia by expanding its nitrogen and oxygen pipelines and building more plants this year via Air Products Malaysia (APM). Country manager Jeff Chen said the pipelines are currently being expanded in Prai, Penang, to connect the Prai Industrial Estate to Bukit Minyak Industrial Estate, spanning roughly 12km, as well as within the Prai Industrial Estate area. The company is also building new plants in Kulim and Seremban to cater for electronics and glass manufacturing. The expansion, Chen said, is in tandem with the various opportunities in the government's National Key Economic Areas (NKEA) and Economic Transformation Programme (ETP). He added that Malaysia is the key part to Air Product's business in Asean. The company currently has 13 manufacturing and sales location nationwide. It serves companies across several industry sectors such as chemicals, electronics, food, glass, metal processing, oleochemicals, semiconductors and steel. (BT)

Q-Cells Group SE which owns a production facility in Malaysia, employing some 500 staff has filed for insolvency. Q-Cells is the fourth among large solar companies from Germany since Dec 2011 to go bankrupt. There was no immediate news on the face of the staff at the Malaysian production facility, which was formed in Jun 2008. The facility is located on a 30,000 sq m plot in Cyberjaya. (Malaysian Reserve)

MAHB: KPMG audits KLIA2 job
In the wake of allegations of cost overruns in KLIA2, sources said KPMG has been appointed to undertake an audit on the project. It is learnt that the accounting firm had completed its investigations last week.  However, it is unclear as to who called for the audit on the klia2 development, where construction cost has increased by as much as 95% to between RM3.6bn and RM3.9bn. One of the sources said the audit indicated that the changes request by airlines had cost most of the cost escalation. However, he did not elaborate further. (Financial Daily)

Sapura Group: Family feud goes to court
A simmering family dispute in the house of Sapura, one of Malaysia’s more illustrious bumiputera business families, has spilled into the open. In a legal challenge filed in late Feb, patriarch Tan Sri Shamsuddin Kadir is demanding the return of shares and properties valued in excess of RM450m from his two sons, Datuk Sharil Shamsuddin and Shahriman Shamsuddin. According to the media report, the court documents did not stipulate the reasons behind Shamsuddin’s demand for the return of assets, which include a 15% block in the family’s private investment vehicle called Sapura Holdings Sdn Bhd and a clutch of properties in the Klang Valley and Selangor. However, financial executives familiar with the yet-to-be publicized court dispute said the suit filed in the  Shah Alam High Court will not pose any problems to the RM11.85bn SapuraCrest-Kencana merger. (Financial Daily)

Pharmaniaga: Allocates RM95m for capex
Pharmaniaga is allocating some RM95m in  capex this year. According to  chairman Tan Sri Lodin Wok Kamaruddin, this will include spending for the company's expansion into the regional market, beginning with Indonesia. Lodin said an estimated RM30m is to be spent on setting up a reasonably-sized manufacturing plant in Indonesia to meet the local demand for generic drugs. Lodin said the rest of the capex will be used for other regional expansion such as into Vietnam and Myanmar, upgrading its existing plants in Malaysia and improving Pharmaniaga's information system. He also said the company's plan to enter the Middle Eastern market through another plant in Saudi Arabia is on track, adding that the talks with the authorities there would likely be completed by late this year or early 2013. (Business Times)

Pharmaniaga: Aims to increase revenue contribution from private sector
Pharmaniaga’s MD Datuk Farshila Emran said the company is looking to increase the revenue contribution from the private sector from the 3% at present. Farshila said after its AGM on Wednesday that the group was hoping to achieve a target of about  6% to 7% revenue contribution from the private sector for FY2012. The private sector includes private hospitals and private clinics. (Financial Daily)

Oil & Gas: Petronas unit Engen suspends Iran oil imports
Petronas’ Engen unit, the biggest South African importer of Iranian crude, said it has suspended imports of oil from the Middle Eastern nation amid economic sanctions by the US and the  EU. Engen spokeswoman Tania Landsberg said the company had contingency supplies in place. Engen, which operates the country's second biggest refinery based in Durban and with a capacity of 135,000 barrels a day, normally buys about 80% of its supplies from Iran. Petronas CEO Datuk Shamsul Azhar Abbas, said Engen was under heavy pressure to halt Iranian imports because of sanctions. He said Engen had sought alternative supplies but had not yet received any. (StarBiz)

20120405 1004 Global Market Related News.

Asia Stocks Slide as Europe Debt Crisis Concern Flares (Source: Bloomberg)
Asian stocks fell, with the regional benchmark index extending losses after plunging the most in four months yesterday, as weak demand at a Spanish bond auction reignited concern Europe won’t contain its debt crisis. Sony Corp. (6758), which depends on Europe for a fifth of its sales, lost 2.1 percent in Tokyo. Newcrest Mining Ltd. (NCM), Australia’s third-largest mining company by market value, dropped 2.1 percent after a gauge of metal prices fell the most in two months. Tokyo Electric Power Co. rose 1.5 percent after a report the operator of the stricken Fukushima Dai-Ichi nuclear power plant will sell a majority stake to the government.
The MSCI Asia Pacific Index dropped 0.5 percent to 124.84 as of 9:45 a.m. in Tokyo before the Hong Kong market opened. The gauge yesterday slid 1.5 percent, the most since Dec. 19, after the U.S. Federal Reserve signaled it may not offer more stimulus. Stocks fell today after demand for Spanish bonds fell and European Central Bank President Mario Draghi said the region’s economic outlook is “subject to downside risks.’” “Investors realize those economies are heading into a significant recession,” said Andrew Pease, Sydney-based chief investment strategist for the Asia-Pacific region at Russell Investment Group, which manages about $150 billion. “Gains from here are going to be hard work.”

Japanese Stock Futures Gain on U.S. Confidence, Spending (Source: Bloomberg)
Japanese stocks fell for a third day, with the Nikkei 225 (NKY) Stock Average heading for a four-week low, after falling demand at a Spanish bond auction refocused attention on Europe’s debt crisis, weakening the euro and damping the outlook for exporters. Sony Corp. (6758), an electronics maker that depends on Europe for more than a fifth of its sales, slid 2.1 percent. Inpex Corp. (1605), the nation’s largest energy explorer by market value, sank 2.4 percent after crude prices declined. Mitsubishi Heavy Industries, Ltd. lost 1.5 percent on a report its jet deliveries will be delayed by at least one year. The Nikkei 225 fell 0.9 percent to 9,732.25 as of 9:40 a.m. in Tokyo, set for the lowest close since March 7. The broader Topix Index lost 1.2 percent to 825.72, with more than six times as many shares declining as advancing.
“The Spanish bond auction wasn’t very successful,” said Mitsushige Akino, a fund manager at Ichiyoshi Investment Management Co. in Tokyo. “If the European debt crisis reignites, investors will look to avoid risk and turn their eyes toward reasons for concern.” Futures on the Standard & Poor’s 500 Index (SPXL1) were little changed today. The gauge sank 1 percent in New York yesterday, this year’s second-biggest decline, as a measure of U.S. service industries dropped.

U.S. Stocks Drop on Spanish Bond Sale, SanDisk Forecast (Source: Bloomberg)
U.S. stocks fell, with the Standard & Poor’s 500 Index posting this year’s second-biggest decline, as demand dropped at a Spanish bond auction and SanDisk (SNDK) Corp.’s lower forecast dragged down technology shares. Computer and software makers fell 1.4 percent as a group and were the biggest drag on the S&P 500 among 10 industries as SanDisk, the biggest maker of flash-memory cards, tumbled 11 percent. Alcoa Inc. lost 2.5 percent, pacing declines among material companies, as investors sold shares of companies most- tied to the economy after a report on U.S. service industries missed estimates. Bank of America Corp. (BAC) and JPMorgan Chase & Co. (JPM) slumped at least 2.2 percent as financial stocks slid. The S&P 500 lost 1 percent to close at 1,398.96 at 4 p.m. in New York today, retreating the most since March 6, when the benchmark index plunged 1.5 percent in its worst drop of the year. The Dow Jones Industrial Average slid 124.8 points, or 1 percent, to 13,074.75.
The Spanish auction “serves as a reminder to the market that Europe is still with us,” Mark Freeman, chief investment officer at Westwood Holdings Group Inc. in Dallas, said in a telephone interview. His firm oversees about $13 billion. “We still have a long way to go before things get worked out,” he said. “The market has now moved significantly higher. But guess what, expectations are now much higher. What ultimately it’s going to take is much stronger corporate profits.”

European Stocks Fall on Spain Bonds, Fed Stimulus Stance (Source: Bloomberg)
European stocks fell the most in four weeks after Spain sold fewer bonds than its maximum target and the Federal Reserve damped expectations of more monetary stimulus for the U.S. Volvo AB (VOLVB) tumbled 4.8 percent after ACT Research said North American preliminary truck orders in March were less than expected. Carmakers declined, with Peugeot SA and Renault SA (RNO) dropping at least 4 percent each, after a report showed U.S. sales of light vehicles rose less than forecast. Royal Bank of Scotland Group Plc lost 2.9 percent after people familiar with the matter said the lender canceled a bond sale. The Stoxx Europe 600 Index retreated 2.1 percent to 258.76 at the close of trading, the biggest decline since March 6. The number of shares changing hands on the benchmark index was 25 percent more than the average over 30 days, data compiled by Bloomberg show.
“Clearly Spain is starting to have some problems of refinancing; we may need some more bailouts in Europe -- possibly one for Spain,” said Jean Borjeix, a strategist at Paris-based Platinium Gestion, which helps oversee about $170 million. “I believe we have reached a top in the market in the short term. Today, markets have included in their thinking that it will be difficult for Europe.”

Emerging Stocks in Deepest Slide in Month on Fed Concern (Source: Bloomberg)
Emerging-market stocks fell the most in a month on concern the Federal Reserve may refrain from more monetary stimulus and as lower demand for Spanish bonds revived worries Europe’s debt crisis will harm global growth. The MSCI Emerging Markets Index (MXEF) fell 1.7 percent to 1,037.33 in New York, the steepest slide since March 6. Materials and energy companies led the drop. Vale SA (VALE5), the world’s largest iron ore producer, had its biggest two-day drop in a month, and Brazil’s Bovespa (IBOV) Index fell to the lowest level since Jan. 31. Coal producer OAO Mechel (MTLR) led declines on Russia’s Micex Index. Gold Fields Ltd. (GFI), South Africa’s second-largest gold producer, fell the most since November.
The Fed won’t impose more accommodative monetary policy unless economic expansion falters or inflation quickens to more than the 2 percent target, according to minutes from the March 13 meeting released yesterday. U.S. services industries, which account for almost 90 percent of the economy, grew at a slower pace in March, Institute for Supply Management data showed today. Demand for Spanish government bonds dropped at an auction and Prime Minister Mariano Rajoy said the country is “facing an economic situation of extreme difficulty.” “The markets were starting to price in both a better economic outlook and policy easing, and you can’t have both,” Neil Shearing, chief emerging-markets economist at Capital Economics Ltd. in London, said by phone. “The fear amongst investors is that Spain could now be the next domino to fall in the euro crisis.”

GLOBAL MARKETS-Shares, euro fall as fresh Fed stimulus hopes fade
LONDON, April 4 (Reuters) - Stocks and the euro fell after the U.S. Federal Reserve dimmed hopes for fresh asset-buying, further underlining its divergence with an embattled Europe tha t fac  es recession and rem  ains fir  mly in c risis-fighting mode.
"Additional QE and/or extension of the current 'operation twist' programme have been a central focus for financial markets in recent months, but the overnight release of the latest (Fed)  meeting minutes appeared to douse these expectations," Cameron Peacock, market analyst at IG Index said in a note.

FOREX-Dollar hits 1-wk high post-Fed as Spain auction, ECB eyed
LONDON, April 4 (Reuters) - The dollar hit a one-week high against a basket of currencies, lifted by minutes from the U.S. Federal Reserve's latest policy meeting that reduced expectations for further monetary stimulus and sent Treasury yields higher.
"The market is moving on reduced probability of further QE in the near-term, and that's helping to support the U.S. dollar across the board," said Lee Hardman, currency economist at Bank of Tokyo-Mitsubishi.

Euro Trades Near 3-Week Low Before German Industrial Production (Source: Bloomberg)
The euro traded 0.4 percent from a three-week low versus the yen as Europe’s debt crisis dimmed the outlook for the region’s economy. The 17-nation currency was also near a three-week low against the greenback on speculation a report today will show German industrial production fell in February, backing the case for the European Central Bank to keep interest rates low. Demand for the dollar was supported before data tomorrow that may show U.S. payrolls rose by more than 200,000 workers in March for a fourth month, spurring speculation the Federal Reserve will refrain from easing monetary policy. “Most of Europe is going through a contraction,” said Andrew Salter, a foreign-exchange strategist in Sydney at Australia & New Zealand Banking Group Ltd. (ANZ) “If the peripheral governments cannot make the necessary reforms, in the long term that’s a negative for the euro.”
The euro traded at 108.32 yen as of 8:39 a.m. in Tokyo from 108.37 in New York yesterday, when it touched 107.91, the lowest since March 13. The common currency was unchanged at $1.3142, after dropping to $1.3107 yesterday, the weakest since March 16. The dollar was at 82.43 yen from 82.46.

Stocks, Commodities Drop on Fed Minutes, Spanish Auction (Source: Bloomberg)
Stocks and commodities slid for a second day as weaker demand at a Spanish debt auction and the U.S. Federal Reserve’s reluctance to add more monetary stimulus fueled concern the global economic recovery will slow. The euro fell and Spanish, Italian and Portuguese bond yields surged. The Standard & Poor’s 500 Index lost 1 percent as of 4 p.m. in New York, its second-worst drop of the year, and the Dow (INDU) Jones Industrial Average slid 124.8 points to 13,074.75. The Stoxx Europe 600 Index tumbled 2.1 percent. The euro depreciated against 12 of 16 major peers, while 10-year Treasury yields fell seven basis points to 2.23 percent. Spanish 10-year yields surged 24 basis points to 5.69 percent. Silver and gold plunged more than 3 percent and oil extended losses after U.S. supplies grew by the most since 2008.
The S&P 500 has tumbled 1.4 percent from an almost four- year high of 1,419.04 on April 2 following a 12 percent rally in the first three months of the year, the best first-quarter gain in 14 years. The Fed will refrain from increasing monetary accommodation unless the economic expansion falters or prices rise at a rate slower than its 2 percent target, minutes of a March 13 policy meeting released yesterday showed. “I can’t remember a time where knowing where you are in the trading cycle is as almost important as the news that’s coming,” Wayne Wilbanks, chief investment officer at Wilbanks, Smith & Thomas Asset Management LLC in Norfolk, Virginia, which oversees about $2 billion, said in a telephone interview. “When you are at the top of a trading range between 1,100 and 1,400, it will take very little bad news -- and maybe some news about quantitative easing, which is not bad news -- for the market to go down.”

Service Industries in U.S. Kept Expanding in March: Economy (Source: Bloomberg)
Service industries in the U.S. grew in March, capping the strongest quarter in a year and indicating the world’s largest economy will keep generating jobs. The Institute for Supply Management’s non-manufacturing index fell to 56 from a one-year high of 57.3 in February, the Tempe, Arizona-based group’s data showed today. Last month’s reading still topped the average for the previous economic expansion. Another report showed companies added an estimated 209,000 workers to payrolls in March. Sales (RSTAMOM) at businesses like restaurants and retailers are climbing as an improving labor market shores up household incomes and confidence in the face of more expensive gasoline. Since mid-2011, the industries that account for almost 90 percent of the economy have outpaced gains in manufacturing, which had been at the forefront of the two-year expansion.
“No longer can we say that only manufacturing is powering the economy forward,” said Jennifer Lee, a senior economist at BMO Capital Markets in Toronto, who correctly forecast the level of the index. “The general trend is very encouraging.” Stocks fell as a drop in demand for Spanish bonds brought concern over the European debt crisis to the fore and after Federal Reserve policy makers signaled yesterday that an improving economy would cause them to refrain from additional monetary stimulus. The Standard & Poor’s 500 Index decreased 1 percent to 1,398.96 at the close in New York.

Fed’s Lacker Says Volcker Rule May Be ‘Impossible’ to Implement (Source: Bloomberg)
Federal Reserve Bank of Richmond President Jeffrey Lacker said a U.S. law restricting proprietary trading at banks and scheduled for enactment in July may be “impossible” to implement. The so-called Volcker rule, named for its original champion, former Fed Chairman Paul Volcker, is aimed at reducing the odds that banks will make risky investments with their own capital and put depositors’ money at risk. Lacker said bank trading books were “kind of tangential” to the financial crisis of 2008-2009, when bank capital was eroded by losses on risky mortgages, many of them bundled into complex securities. The Volcker rule is “fairly difficult if not impossible to implement in a way that is at all reasonable,” Lacker said today in an interview with Bloomberg Television’s Trish Regan.
The proposal is one of the most contentious provisions of the 2010 Dodd-Frank act on financial oversight, and Lacker said it would be “high on the list” of things he would change if he could. Work on the rule is diverting resources from more “essential” requirements in the act that would limit taxpayer- funded bailouts, such as living wills where large banks must describe to regulators how they would dissolve themselves in a crisis, he said.

Fed Exploring Selling Maiden Lane III Assets From AIG Rescue (Source: Bloomberg)
The Federal Reserve Bank of New York is considering selling assets in its Maiden Lane III LLC portfolio, which were assumed in the government bailout of American International Group Inc., the district bank said today. “The change in the investment objective for Maiden Lane III reflects a strategic decision to explore possible sales of some of the assets in the portfolio in light of improving market conditions and the success of the Maiden Lane II sales,” Jack Gutt, a spokesman for the New York Fed, said in an e-mailed statement. The New York Fed is seeking to accelerate the repayment of its loan to the Maiden Lane III vehicle after completing the sale this year of the assets in its Maiden Lane II LLC portfolio, another pool of debt assumed in AIG’s rescue. The central bank was owed about $9 billion under its loan to Maiden Lane III as of March 28, according to the New York Fed website.
AIG and the Fed have benefited from the rebound in mortgage-linked assets, such as those assumed in the bailout. The insurer may use proceeds from sales of Maiden Lane III assets to help buy back more stock from the U.S. Treasury Department, Josh Stirling, an analyst for Sanford C. Bernstein & Co., said in a note to clients today. AIG advanced 5.3 percent to $32.52 at 4:02 p.m. in New York, the most since February.

Company Payrolls in U.S. Grow by Estimated 209,000 Workers (Source: Bloomberg)
Companies in the U.S. expanded payrolls in March, showing the labor market is strengthening, according to data from a private report based on payrolls. Employment increased by 209,000 for the month after a revised 230,000 gain in February, figures from ADP Employer Services showed today. The median estimate in the Bloomberg News survey called for a 206,000 increase. Faster job growth may lead to the wage gains needed to sustain consumer spending, which accounts for about 70 percent of the world’s largest economy. Businesses added 215,000 jobs in March, and the unemployment rate held at 8.3 percent, economists project a Labor Department report will show in two days. “Labor market conditions continue to improve at a moderate pace,” Joel Prakken, chairman of Macroeconomic Advisers LLC in St. Louis, which produces the report with ADP, said in a statement. “Employment grew in all major sectors of the economy tracked.” Estimates in the Bloomberg survey of 38 economists ranged from increases of 170,000 to 250,000.

Fed Sees Improving Economy Reducing Need for Stimulus (Source: Bloomberg)
Federal Reserve policy makers see the improving economy reducing the need for new stimulus even as they stick to a plan to hold the benchmark interest rate near zero at least through late 2014. Fed officials called for additional stimulus only “if the economy lost momentum” or if inflation stays below their 2 percent inflation target, according to minutes of their March 13 meeting released yesterday in Washington. That contrasts with their January meeting minutes, in which some policy makers saw the economy requiring additional action “before long.” “I would have to see some pretty severe circumstances before I endorse for another round of quantitative easing,” Atlanta Fed President Dennis Lockhart said yesterday in an interview. “The outlook is positive enough that I am not sure I see the need for it.” A voting member of the Federal Open Market Committee this year, Lockhart has never dissented from a policy decision since becoming head of the district bank in March 2007.
The central bank sees the U.S. economy improving enough to argue against a new round of quantitative easing while showing signs of weakness that warrant continued record-low interest rates. Stocks extended declines after release of the minutes yesterday while the dollar and Treasury yields rose.

Fed’s Lacker Says Markets Saw Odds of New Easing as Too High (Source: Bloomberg)
Federal Reserve Bank of Richmond President Jeffrey Lacker said financial markets had assigned too high a probability that the Fed would begin a new round of asset purchases to reduce borrowing costs and spur economic growth. “I was surprised a couple months ago at the probability market participants seemed to ascribe to further easing,” Lacker, a voting member of the Federal Open Market Committee (FDTR), told reporters and editors today at the Bloomberg News Washington bureau. “While further easing is obviously something that’s conceivable, I wouldn’t favor it unless conditions deteriorated quite substantially” for growth and inflation.
Stocks and commodities continued their decline for a second day after the minutes of the FOMC’s March 13 meeting called for easing only “if the economy lost momentum” or if inflation fell below its 2 percent target. The Standard & Poor’s 500 Index lost 1.1 percent to 1,397.66 as of 2 p.m. in New York, after a 0.4 percent decline yesterday. The S&P GSCI gauge of commodities retreated 1.7 percent after falling 0.4 percent yesterday. The yield on the ten-year Treasury fell to 2.24 percent from 2.30 percent yesterday.

Draghi Scotches ECB Exit Talk as Spain Keeps Crisis Alive (Source: Bloomberg)
European Central Bank President Mario Draghi quashed talk of an early exit from emergency stimulus measures as Spain struggled to borrow in financial markets, a reminder of the risk that the region’s debt crisis could flare again. Speaking just hours after Spanish Prime Minister Mariano Rajoy warned his country faces “extreme difficulty,” Draghi said yesterday that talk of the ECB starting to withdraw its support for euro-area banks is “premature.” At the same time, in a nod to growing inflation concerns in Germany, he said the ECB won’t hesitate to counter price risks if needed. Policy makers left their benchmark rate at a record low of 1 percent. The ECB has expanded its balance sheet by about 30 percent since Draghi took office in November, pumping more than 1 trillion euros ($1.3 trillion) into the banking system in a bid to stem the debt crisis.
Pressure to unwind the emergency measures is rising in Germany, where workers are winning some of the biggest pay increases in two decades, threatening to stoke inflation. “Premature Bundesbank calls for an ECB exit strategy have now triggered a new round of market wobbles, with a focus on Spain,” said Holger Schmieding, chief economist at Berenberg Bank in London. “The risk of a new irrational market panic remains serious.”

King Readies Completion of Current Stimulus as BOE Debate Looms (Source: Bloomberg)
Bank of England Governor Mervyn King and his committee may vote today to complete their current round of stimulus as they get ready to debate next month whether to bring the program to a halt. With some on the nine-member Monetary Policy Committee toughening their stance about the threat of inflation and King insisting the U.K.’s predicament “still feels like a crisis,” economists predict the panel will back finishing their 325 billion-pound ($516 billion) stimulus today. That sets the stage for a showdown in May, when officials will have new forecasts and data on first-quarter gross domestic product. Policy makers are trying to nurture a recovery under pressure from Europe’s debt crisis and Chancellor of the Exchequer George Osborne’s fiscal squeeze. While surveys this week indicated the economy is gaining momentum, Adam Posen and David Miles still called for another expansion of stimulus last month at a meeting when the majority of their colleagues favored waiting to gauge risks to inflation.
“The data has been turning and there is some evidence inflation is going to be a bit more sticky,” said George Buckley, chief U.K. economist at Deutsche Bank AG in London. “The big question is not what they do at this meeting but whether they continue with quantitative easing. The May decision is going to be a big signal to the market.”

Draghi Says Inflation Risks Prevail as Economy Stabilizes (Source: Bloomberg)
European Central Bank President Mario Draghi said policy makers are prepared to act against inflation threats if needed, while assuring investors that the ECB doesn’t plan to withdraw emergency stimulus any time soon. “All the necessary tools are available to address upside risks to price stability in a firm and timely manner,” Draghi told reporters in Frankfurt after the ECB held its benchmark rate at a record low of 1 percent today. At the same time, it’s premature to talk about the ECB’s exit strategy, Draghi said, adding that the economic outlook is subject to downside risks and inflation will remain contained in the medium term. The ECB is balancing the threat of inflation in Germany, Europe’s largest economy, against the need to fight the sovereign debt crisis. While nations from Greece to Spain are battling recessions and record unemployment, workers in Germany are winning some of the biggest pay increases in 20 years.
“Today’s press conference was a strange brew between reassuring the markets that talk of an exit strategy is premature and trying to alleviate the German fear of an uptick in inflation,” said Peter Vanden Houte, an economist at ING Group in Brussels. “The ECB’s policy has been criticized in Germany as potentially stoking inflation. Draghi clearly wanted to set things straight.”

Spain Not Greece Is the Real Test for the European Union (Source: Bloomberg)
The decisive test of the euro area’s plans for economic recovery was never Greece but Spain, and the European Union shows every sign of failing it. The Spanish government’s new austerity plan hasn’t won investors’ confidence, and this creates a threat not just to Spain but to the whole EU. Europe’s governments need to change course before it’s too late. An auction of Spanish bonds on Wednesday was the first verdict on Spain’s new budget. It didn’t go well. Demand was poor and prices fell. The country’s borrowing costs rose with 10 year bond yields in the secondary market hitting 5.7 percent, the highest since the beginning of the year. The premium over German government bonds increased to nearly four percentage points, the highest since November.
The problem is not that Spain’s new austerity plan is too timid. Just the opposite: Under EU orders, Spain is promising what might be the tightest fiscal squeeze that it or any other European economy has ever faced. The new plan calls for the budget deficit to fall from 8.5 percent of gross domestic product to 5.3 percent this year. Since the economy is already shrinking, this requires a discretionary fiscal tightening of roughly 4 percent of GDP -- with the unemployment rate already standing at about 23 percent.

20120405 1004 Global Commodities Related News.

England Challenges China by Reviving Strategic Mine: Commodities (Source: Bloomberg)
An English mine last used to make armaments to defeat Hitler’s forces will be revived to challenge China’s grip on tungsten, among strategic metals at the heart of a deepening trade dispute with Europe and the U.S. Wolf Minerals Ltd. (WLF) is developing a tungsten mine in Devon, southwest England, 70 years after it was last extracted there. The Hemerdon site is the world’s fourth-largest deposit and can produce about 3.5 percent of global demand for the metal, used to harden steel in ballistic missiles and in drill bits. China provides about 85 percent of worldwide supplies. Tungsten was one of the metals cited when U.S. President Barack Obama filed a complaint to the World Trade Organization on March 13 against Chinese supply curbs. Tungsten is a “critical” raw material, according to the European Union, and the British Geological Survey places it at the top of its supply-risk list of materials needed to maintain the U.K.’s economy and lifestyle.
“A big element of what we are doing is providing a strategic supply to companies outside of China,” Wolf Managing Director Humphrey Hale said in an interview in London. “We’re answering a requirement from the market, which is strategic supply, and prices are at a position where we can make money from that.”

Corn futures were choppy today and closed mid-range to finish with losses of 3/4 to 3 3/4 cents. After several days of aggressively adding long contracts, funds reevaluated positions today and began to move to the sidelines ahead of the extended Easter weekend. The markets are closed on Friday, meaning traders will put their finishing touches on positions tomorrow. (Source: CME)

Corn Market Recap for 4/4/2012 (Source: CME)
Wed 04 Apr 2012 14:21:01 CT
May Corn finished down 1 1/2 at 656 3/4, 7 off the high and 6 up from the low. July Corn closed down 2 1/4 at 650 3/4. This was 5 3/4 up from the low and 7 1/4 off the high. May corn closed slightly lower on the session but still managed to gain on July corn and the move under yesterday's lows failed to attract new selling interest. Outside market forces were clearly negative this morning but talk of strong cash basis levels and the continued lack of producer selling has helped to support the market early today. Active producer fieldwork is keeping producers who have held old crop corn this far away from new cash sales in spite of the recent strong gains and the strong cash basis. South Korea bought a cargo of 59,000 tonnes of US corn and passed on tenders for an additional 140,000 tonnes. Ethanol production for the week ending March 30th averaged 873,000 barrels per day. This is down 1.8% vs. last week and down 3.2% vs. last year. Total Ethanol production for the week was 6.111 million barrels. Corn used in last week's production is estimated at 92.99 million bushels. Corn use needs to average 94.18 million bushels per week to meet this crop year's USDA estimate of 5 billion bushels. Stocks were 22.55 million barrels. This is down 0.3% vs. last week and up 12.4% vs. last year. May Rice finished down 0.025 at 14.905, 0.015 off the high and 0.225 up from the low.

GRAINS-Corn rises for 4th day on shrinking supply; wheat down (Source: CME)
By Thomson Reuters - Wed 04 Apr 2012 11:15:03 CT
 U.S. old-crop corn rose for a fourth straight session as tightening global supplies continued to underpin the market, while soybeans lost more ground, easing from seven-month highs. "Right now the situation is pretty much classified as consolidation after some of the strong gains we saw post USDA report," said Luke Mathews, commodities strategist at Commonwealth Bank of Australia in Sydney.

Wheat futures posted a downside day of trade. Chicago wheat settled with losses ranging from 15 1/4 cents to 19 3/4 cents and Kansas City wheat closed mostly around 20 cents lower. Minneapolis wheat saw lighter losses of 4 1/2 to 11 cents in most contracts. Rains in the Central and Southern Plains are beneficial for early-developing winter wheat, which weighed on wheat futures and encouraged fund liquidation. (Source: CME)

Wheat Market Recap Report (Source: CME)
Wed 04 Apr 2012 14:21:01 CT
May Wheat finished down 18 3/4 at 639 1/4, 19 1/2 off the high and 3 3/4 up from the low. July Wheat closed down 19 1/4 at 649 3/4. This was 4 up from the low and 19 3/4 off the high. May wheat closed sharply lower on the session and has given back near half of the gains from the past week as weather and outside market forces helped to spark fairly aggressive selling on the day. July KC wheat was down more than 20 cents by the close. The sharp break in gold and equity markets along with a jump in the US dollar and continued talk of good weather to see improving crops ahead helped to pressure the market early. Rain in the forecast for parts of Europe which have been dry and ideas that the late rally yesterday was overdone and included active fund short-covering from fund traders helped to pressure the market today as well. There are some concerns for the soft red crop in parts of the eastern Corn Belt into the middle of next week with freezing temperatures possible but many traders see little damage and/or the need for the forecast to get colder in order to cause much damage. Spain producers are hoping for good rains in April and May to avoid crop damage from the driest winter in 65 years. May Oats closed down 1 at 335. This was 2 3/4 up from the low and 3 off the high.

Strength in the U.S. dollar index weighed on cotton futures today, with sell stops triggered to extend losses. Cotton closed 228 to 344 points lower in the 2012 contracts, with 2013 contracts down 222 to 242 points. Otherwise, there was little fresh news for the cotton market to digest, which returned focus to the plentiful supply situation.  (Source: CME)

Monsanto Raises Forecast as Profit Tops Estimates on Corn (Source: Bloomberg)
Monsanto Co. (MON), the world’s largest seed company, raised its full-year earnings forecast and reported second-quarter profit that exceeded analysts’ estimates as an early U.S. spring boosted corn plantings. Net income rose 19 percent to a $1.21 billion, or $2.24 a share, in the three months through February, from $1.02 billion, or $1.88, a year earlier, St. Louis-based Monsanto said today in a statement. Earnings excluding legal costs were a record $2.28, topping the $2.12 average of 17 analysts’ estimates compiled by Bloomberg. Monsanto said it will earn $3.49 to $3.54 a share in the 12 months through August, a 10-cent increase from the company’s January forecast. The average estimate of 19 analysts was $3.52. Second-quarter revenue rose 15 percent to $4.75 billion.
Chief Executive Officer Hugh Grant said on a conference call that he expects to gain market share in U.S. corn seed for a second year as farmers buy more SmartStax, which has eight genetic changes enabling it to tolerate herbicides and kill bugs. Sales in the quarter benefited from warm U.S. weather that is leading to early orders, Monsanto said. “They have a lot of things going right for them: corn acreage, weather, strong crop prices,” Chris Shaw, an analyst at Monness Crespi Hardt & Co. who recommends selling the shares, said today in a telephone interview. “The largest beat in my model was corn seed.”

GRAINS-Corn rises for 4th day on shrinking supply; wheat down
SINGAPORE, April 4 (Reuters) - U.S. old-crop corn rose for a fourth straight session as tightening global supplies continued to underpin the market, while soybeans lost more ground, easing from seven-month highs.
"Right now the situation is pretty much classified as consolidation after some of the strong gains we saw post USDA report," said Luke Mathews, commodities strategist at Commonwealth Bank of Australia in Sydney.

Australian wheat exports face slowdown after 9-yr peak in Feb
SYDNEY, April 4 (Reuters) - Australian wheat exports hit a nine-year high in February on the back of a record grains crop, data on Wednesday showed, but heavy rains are likely to have weighed on shipments in March.
Australia is the world's fourth largest wheat exporter and is enjoying a bumper 2011/2012 harvest after soaking rains boosted yields.

Vietnam 2012 rice exports may fall to 6.1 mln T
HANOI, April 4 (Reuters) - Vietnam's rice exports this year could drop nearly 14 percent from last year to 6.1 million tonnes as a result of lower demand from key buyers, and rising competition from cheaper grain, the Agriculture Ministry said.
Forecasts of higher output in Indonesia and the Philippines, Vietnam's key rice buyers, and India and Pakistan offering cheaper rice for export, could lead to a drop in Vietnam's rice exports, said a ministry report seen by Reuters on Wednesday.

Canada wheat monopoly backers to appeal court ruling
April 3 (Reuters) - Former directors of the Canadian Wheat Board said on Tuesday they will appeal a Manitoba court ruling that dismissed their motion to suspend the law that ended the CWB's grain monopoly.
The former directors, whom the Canadian government removed from the CWB board after taking control of it in December, want the law suspended until a court can review the law's validity. But Manitoba Judge Shane Perlmutter ruled on Feb. 24 that the directors had not convinced him that there is a serious question to be tried.

Informa raises US corn seedings forecast, trims soy
CHICAGO, April 3 (Reuters) - Informa Economics chief executive Bruce Scherr said on Tuesday that the firm has raised its forecast of U.S. 2012 corn plantings to 96.4 million acres, from 95.5 million in its previous estimate from March 9.
Speaking at a conference in Chicago, Scherr said the firm lowered its forecast of U.S. 2012 soybean plantings to 74.2 million acres, from 75.1 million previously.

Argentine soy, corn output seen lower - Rosario
BUENOS AIRES, April 3 (Reuters) - Argentina's biggest grains exchange slashed its forecast for 2011/12 soy production to 43.1 million tonnes on Tuesday as the extent of drought damage becomes clearer, especially in northern provinces.
Rosario grains exchange said acute damage to crops in Tucuman, Salta, Chaco and Santiago del Estero had led it to cut its previous forecast for production of 44.5 million tonnes.

Cocoa Nears Three-Month Low on Supply Outlook (Source: Bloomberg)
Cocoa fell to the lowest since January on signs of improved crop prospects in Ivory Coast, the world’s top producer. Coffee dropped, and sugar gained. Rainfall in Ivory Coast was “pretty much normal for late March and early April,” and the region will have more showers this week, bolstering the production potential, Paul Markert, a meteorologist at MDA Information Systems Inc. in Gaithersburg, Maryland, said in an e-mail yesterday. The commodity rose 5.2 percent in the first quarter on speculation that dry weather would trim the country’s yields. There’s a “better outlook for Ivory Coast’s mid-crop,” that will be collected from April to September, Judy Ganes- Chase, the president of J. Ganes Consulting in Katonah, New York, said today in an e-mail. “Rains are spreading.”
Cocoa futures for May delivery dropped 2.8 percent to settle at $2,083 a metric ton at 12:05 p.m. on ICE Futures U.S. in New York. Prices have fallen for six straight sessions, the longest slide since Dec. 9. Earlier, the commodity touched $2,060, the lowest since Jan. 9.

S.Africa's 2011/12 sugar output falls to 1.82 mln T
JOHANNESBURG, April 3 (Reuters) - South Africa's 2011/12 sugar output fell to 1.82 million tonnes from 1.91 million tonnes in the previous season, the South African Sugar Association (SASA) said on Tuesday.  
Sugarcane crush rose to 16.8 million tonnes from 16.02 million tonnes, the industry association, which represents producers and millers in Africa's biggest economy, said in a statement on its website.

Prices key to Mexico sugar import decision-minister
WASHINGTON, April 3 (Reuters) - The Mexican government is closely watching domestic sugar prices and could allow sugar imports if prices do not fall closer to world levels, Mexico's economy minister said on Tuesday.
"We don't want our consumers to pay a higher price in Mexico," Mexican Economy Minister Bruno Ferrari told Reuters in an interview. "If we don't see the price going down as it is going down around the world, then we will import the sugar."

Vietnam sees 2012 coffee export fall, Indonesia crop shaky
HANOI/SINGAPORE, April 3 (Reuters) - Exports from main robusta producer Vietnam are expected to slip more than 7 percent this year due to limited supplies, while a plunge in last month's exports from rival Indonesia highlights the slow progress of the current harvest.  
Falling exports from Vietnam and Indonesia, which account for about 20 percent of global coffee output, could help London robusta futures resist pressure from New York arabica, which  has plunged more than 40 percent from the highs hit in May 2011.

Oil Rebounds From Lowest in Seven Weeks on U.S. Economic Outlook (Source: Bloomberg)
Oil rebounded from a seven-week low in New York as investors bet that fuel demand may increase amid signs of a strengthening economy in the U.S., the world’s biggest crude-consuming nation. Futures advanced as much as 0.7 percent for the first gain in three days. Applications for initial jobless benefits probably fell by 4,000 last week to 355,000, according to a Bloomberg News survey before a Labor Department report today. Data tomorrow may show nonfarm payrolls rose in March for a fourth month. Prices slipped yesterday after government figures showed U.S. crude supplies climbed the most since 2008. Oil for May delivery gained as much as 67 cents to $102.14 a barrel in electronic trading on the New York Mercantile Exchange and was at $102.03 at 10:04 a.m. Sydney time. The contract yesterday fell 2.4 percent to $101.47, the lowest close since Feb. 14. Prices are down 1 percent this week, heading for a fourth weekly decline.
Brent oil for May settlement advanced 17 cents, or 0.1 percent, to $122.51 a barrel on the London-based ICE Futures Europe exchange yesterday. The European benchmark contract’s premium to New York-traded West Texas Intermediate slid 40 cents to $20.47 after closing yesterday at the most since Oct. 21.

OIL- Brent slips toward $124 on Fed comments, Saudi supply
SINGAPORE, April 4 (Reuters) - Brent crude extended losses toward $124 a barrel after the U.S. central bank dashed hopes of further economic stimulus, while news that Saudi Arabia is likely to keep output high in the event of a strategic stocks release also weighed.
"The Fed comments had an influence on oil prices, more for the U.S. market than Brent and that's why we saw the Brent/WTI spread widening," said Natalie Robertson, a commodities strategist with ANZ Bank in Melbourne. "Brent was supported by supply side disruptions in the North Sea."

Gold Traders Bearish for First Time in 2012: Commodities (Source: Bloomberg)
Gold traders are bearish for the first time this year after the Federal Reserve signaled it may refrain from more monetary stimulus and jewelers in India, the world’s biggest bullion market, shut to protest a new tax. Fifteen of 29 analysts surveyed by Bloomberg expect prices to decline next week and five were neutral, the highest proportion since Dec. 30. Imports by India may have plunged as much as 81 percent in March and could drop 40 percent in the second quarter, the Bombay Bullion Association said April 2. Indian jewelers, who sell more gold than Australian and U.S. mines produce in a year, were closed yesterday for a 19th day.
Slumping Indian demand comes as prices already erased more than half of this year’s gains on mounting concern the Fed won’t buy more debt. Gold rose about 70 percent as the central bank bought $2.3 trillion of debt in two rounds of quantitative easing ending in June 2011. Policy makers indicated they won’t increase monetary accommodation unless the economy falters, according to minutes of their March 13 meeting released April 3. “Reduced prospects for quantitative easing, if you read that as a strengthening U.S. economy, then it’s bad for gold,” said Carole Ferguson, an analyst at Fairfax IS in London. “Gold has lost some of its safe-haven shine this year. The Indian jewelry market is still very important. If strikes are a longer- term thing it’s more of a worry.”

20120405 1003 Soy Oil & Palm Oil Related News.

Palm-Oil Stockpiles in Malaysia Set to Reach Seven-Month Low (Bloomberg)
2012-04-05 02:49:02.604 GMT
By Ranjeetha Pakiam
April 5 (Bloomberg) -- Palm-oil reserves in Malaysia, the second-biggest supplier after Indonesia, probably declined to the lowest level in seven months in March as exports outpaced growth in production, according to a Bloomberg survey.
Stockpiles fell 2.4 percent to 2.01 million metric tons, from 2.06 million tons in February, according to the median of estimates in the survey of four analysts and two plantation companies. Inventories are expected to be 25 percent higher than a year earlier, the survey showed. Official estimates from the Malaysian Palm Oil Board are scheduled for release on April 10.
Prices gained 12 percent this year on concerns global cooking-oil supplies will drop after drought reduced soybean harvests in Brazil and Argentina and as U.S. farmers plant fewer acres of the oilseed crushed to make soybean oil, a substitute of palm oil in food and fuels. Lower stockpiles may help palm-oil prices rally even higher, potentially raising profits for Malaysian companies including Sime Darby Bhd. and IOI Corp.
“Production is slightly lower than export growth,” Hoe Lee Leng, an analyst at RHB Capital Bhd., said by phone in Kuala Lumpur yesterday. Rising imports from Indonesia were a “skewing factor” in keeping stockpiles in Malaysia above the 2-million ton level, she said.
A cut in export taxes for refined palm oil and olein in Indonesia last year made it cheaper for Malaysian producers of oleochemicals, or specialty fats, to buy from the country, the biggest supplier, said Hoe. Total imports rose to 246,419 tons in February from 209,408 tons in January, board data showed.

Output Climbs
Malaysia’s output advanced 4.2 percent to 1.24 million tons in March, the first gain in five months, from 1.19 million tons in February, according to the survey. Shipments rose 4.8 percent to 1.23 million tons in March after a 10.5 percent drop in February, surveyor Intertek said March 31.
Exports recovered as “soybean supplies look tight, while post-winter demand kicks in,” Ben Santoso, an analyst with DBS Vickers Securities (Singapore) Pte., said in an e-mail.
World output of soybeans may drop to 242.9 million tons in 2012, including a cut of 16 million tons in South American production, Thomas Mielke, executive director of Oil World, said March 26. Palm oil clouds in cooler weather, leading to a seasonal drop in exports during the winter months.
The June-delivery contract declined 0.5 percent to 3,538 ringgit ($1,153) a ton on the Malaysia Derivatives Exchange at 10:44 a.m. in Kuala Lumpur. Futures reached 3,574 ringgit a ton yesterday, the highest price for the most active contract since March 9, 2011.
The price may jump to 4,000 ringgit by the end of June on declining global vegetable-oil stockpiles, Dorab Mistry, director of Godrej International Ltd., said March 27, reiterating an earlier forecast. Global production of palm oil will increase by 2 million tons this marketing year compared with a 5.5-million ton gain in 2010-2011, he said.

Market bulls gave up some control in the soybean market heading into the close, causing futures to soften to a mixed finish. Old-crop futures were around 3 cents firmer while September through March futures were fractionally to 3 1/4 cents lower. Recent choppy price action indicates the soybean market needs fresh demand news to continue its march higher. (Source: CME)

Soybean Complex Market Recap (Source: CME)
Wed 04 Apr 2012 14:21:01 CT
May Soybeans finished up 2 3/4 at 1419 1/2, 10 1/4 off the high and 11 1/4 up from the low. July Soybeans closed up 2 1/2 at 1423 3/4. This was 11 up from the low and 10 off the high. May Soymeal closed up 1.7 at 388.2. This was 2.4 up from the low and 4.5 off the high. May Soybean Oil finished up 0.12 at 56.02, 0.43 off the high and 0.32 up from the low. May soybeans shook off the bearish tilt to outside markets to close slightly higher on the session. More private projections for smaller South America crops and the "need" for soybeans to gain on most other crops in order to secure higher planted area that the March USDA planted acreage intentions has helped to provide underlying support. A bearish tilt to outside markets helped to pressure the market early today with a sharp drop in gold, crude oil and the stock market early plus a strong US dollar helped to spark selling pressures. Continued downgrades of the crops in Brazil and a firm tone to the corn market helped to turn the market higher and futures pushed sharply higher on the day into the mid-session. Taiwan is tendering for 40,000 to 60,000 tonnes of US or Brazil soybeans for May/June shipment.

VEGOILS-Palm rises to 13-month high on demand hopes
SINGAPORE, April 4 (Reuters) - Malaysian palm oil futures climbed to an almost 13-month high  as traders continued to bet on a brighter demand outlook for palm oil following expectations of a smaller soybean crop in coming months.  
"If you are talking about an extraordinary leap, rather than a minor day-to-day fluctuation, it's more likely credited to the USDA report," said Selena Leong, an analyst at DMG & Partners Research in Singapore.

Brazil soy crop put at 65.2 mln T due drought
SAO PAULO, April 3 (Reuters) - Drought in Brazil shrunk the world's second-largest soybean crop to an estimated 65.2 million tonnes this 2011/12 season, down nearly 2 million tonnes from the March forecast of 67.1 million tonnes, local crop analysts Agroconsult said Tuesday.
That projection was one of the lowest among recent forecasts, and well below Brazil's record soy harvest of 75.3 million tonnes last season. Drought over Brazil, Argentina and Paraguay has supported soy futures  prices in Chicago since December.

Taiwan 11/12 soybean imports to fall
April 3 (Reuters) - Following are selected highlights from a report issued by a U.S. Department of Agriculture attache in Taiwan:
"Taiwan typically ranks among the top five export markets for U.S. soybeans, but marketing year 2011/12 imports are expected to fall to 2.2 million tonnes due to reduced livestock production following outbreaks of avian influenza and foot and mouth disease. Higher oil and protein content is stimulating interest in South American beans. As a result, U.S. market share could also fall in MY2011/12. With an expected recovery in the livestock sector, imports are forecast to improve to 2.4 million tonnes in MY2012/13."

Argentine soy crushing rises 11 pct in February
BUENOS AIRES, April 3 (Reuters) - Argentine soy crushing activity rose 11 percent in February from the same month last year to 2.3 million tonnes, the Agriculture Ministry said in its latest crushing report.
Argentina is the world's top supplier of soyoil and soymeal and crushing activity has increased in recent years due to investment in plants, most of them near the port city of Rosario.

Brazil's soy crop seen at 65.2 mln T - Agroconsult
SAO PAULO, April 3 (Reuters) - Drought over Brazil shrunk the world's second-largest soybean crop to an estimated 65.2 million tonnes this 2011/12 season, down from 67.1 million tonnes forecast in March, local crop analysts Agroconsult said on Tuesday.
Brazil put out a record harvest of 75.3 million tonnes of soybeans last season. Strong exports of the 2010/11 crop late last year will likely allow Brazil to displace the United States as the largest exporter of the world's most important source of protein.