Friday, April 6, 2012

20120406 0948 Malaysia Corporate Related News.

BHIC: Confident of rebuilding orderbook
Boustead Heavy Industries Corp Bhd (BHIC) is confident of replenishing its orderbook and sustaining its business operation amid a challenging environment, according to executive deputy chairman and  MD Tan Sri Ahmad Ramli Mohd Nor.  He said that the current orderbook of RM860m is expected to last until 2015. He added that the company is not in the habit of telling what is it working on but it’ll rebuild the orderbook. Executive director David W. Berry said 80% of its current orderbook were for jobs related to maintenance, repair and overhaul (MRO). (StarBiz)

BHIC: Defends RM9bn patrol craft job
Boustead Heavy Industries Corp (BHIC) denied it overcharged the government to build six navy vessels with armament capabilities for up to RM9bn. BHIC MD Tan Sri Ahmad Ramli Md Nor said unlike the first batch of offshore patrol vessels (OPV), the second generation vessels which will be delivered from 2017 onwards, will have more sophisticated combat capabilities. The contract for the first batch of OPVs was awarded in 1999 to BHIC, then known as PSC Industries Bhd (PSCI). (Financial Daily)

MBSB: To focus on retail business, trims loan growth target
Malaysia Building Society (MBSB) is going to focus its business on the retail segment, according to its president and CEO, Datuk Ahmad Zaini. He said a large component (of the retail business focus) will be personal financing and home mortgage programs, and very small auto financing. Ahmad Zaini said on Thursday that the focus would help MBSB achieve its 15% to 20% loans growth target, adding that this should translate to  growth  of  about RM3bn. He said MBSB had seen an increase of 118.81% y-o-y in its personal financing loans to RM8.72bn in its FY2011 from RM3.99bn the preceding year. Meanwhile, its revenue for FY2011 was RM1.27bn, a 65.02% y-o-y growth from RM769.94m. (Financial Daily)

Hibiscus Petroleum: Sets up Aussie unit
Hibiscus Petroleum announced to Bursa Malaysia that its wholly-owned subsidiary Oceania Hibiscus Sdn Bhd has incorporated a wholly-owned subsidiary in Australia, Carnarvon Hibiscus Pty Ltd with an initial paid-up share capital of A$95 comprising 95 ordinary shares of A$1 each. (StarBiz)

SEGi GO may be imminent
A general offer may be announced for SEGi by as early as the end of next week should issues between interested stakeholders and Navis Capital Partners, which recently became the second largest shareholder, be ironed out. Sources said while nothing had been confirmed, a GO is a very real possibility and would depend on several factors, including board-level representation, level of management control by Navis and key performance indices. Sources also did not rule out Navis bringing in SEGi MD Datuk Seri Clement Hii, EPF or another GLIC as a joint offeror in the GO. (StarBiz)

An audit into the financial irregularities of Xian Leng Holdings showed that RM85.7m of the company's money were made to several contractors "under questionable circumstances". The audit revealed that out of the RM90.7m which had supposedly been spent on capex for fish farm development, RM85.7m recorded was shown to be paid to four contractors. "The RM85.7m paid to the four contractors were made under questionable circumstances. The bulk of payments were made via cash cheques and there was a lack of corroborative evidence shown that the amount was paid to and/or received by the four contractors," said the audit report. The RM5m balance of the capex was paid to 52 other contractors, it said. (Starbiz)

Irregular capex amounting to RM90.7m at Xian Leng
Three former directors of Xian Leng Holdings Bhd did not follow the group’s accounting procedures in capital expenditure (capex) amounting to RM901.7m between FY05 and FY08, a special audit of the company has found. According to filling with Bursa, the group said the three former directors and substantial shareholders former managing director Ng Huan Tong, his wife Lim Wan Hong and Chua Chong Seng were the signatories of cash cheques amounting to RM85.7m given out under questionable circumstances to pay four contractors for the construction of fish ponds. (Financial Daily)

Favelle secures 5 contracts worth RM102m
Favelle Favco has secured 5 purchase order contracts worth RM102m through three of its wholly-owned subsidiaries. It said the contracts were secured through Favelle Favco Cranes (M) SB (three contracts), Favelle Favco Cranes Pty Ltd and Kroll Cranes A/S (one contract each). “The contracts secured are for the supply of three offshore cranes and spare parts,” it said. (Financial Daily)

Hitachi plans to acquire Malaysia headquartered eBworx to expand network
Hitachi Ltd has initiated take-over proceedings to acquire eBworx, a financial IT solutions company headquartered in Malaysia. Hitachi intends to expand its system solutions business in South-East Asia and China, by gaining access to eBworx's extensive customer base, software products, and development base, including highly-skilled human resources. The share acquisition proposal is subject to approval from regulatory authorities. Hitachi also aims to establish a one-stop service framework targeting Japanese and local financial institutions that were increasing their investments in global operations especially in Asia. By acquiring eBworx, Hitachi would have a business platform to provide comprehensive system solutions to financial institutions as eBworx has an extensive track record and established reputation with leading banks in South-East Asia and China. (StarBiz)

Navis buys stake in cinema operator
Navis Capital Partners has bought a majority stake in the country’s 3rd largest cinema operator MCAT Box Office SB (MBO) at a price of RM104m. The investment was done via a combination of existing shares from the current sole shareholder, Tan Sri Abdul Rashid Abdul Manaf, and new shares issued for a substantial capital injection from Navis. Upon completion of the exercise, Navis and Rashid will emerged as the majority shareholder of MBO. (StarBiz)

Rafique resigns as TNB CFO
Tenaga Nasional’s CFO has resigned yesterday to pursue career opportunities elsewhere, according to a Bursa Malaysia filling. The 47-year-old chartered accountant Mohd Rafique Merican resigned “to pursue better opportunity and career advancement,” leaving without any disagreement with the board of directors nor any issues to be highlighted to TNB’s shareholders. (StarBiz)

Terengganu approves land for new hospital
The Terengganu state government has approved the lease of land in Batu Burok to build and operate a new 130-bed specialist hospital which is operating at or near maximum capacity,” said its chairman, Datuk Roslan Awang Chik, said in a statement. “The hospital, on a 23,424 sq m land, will be the city’s flagship specialist hospital that will serve the approximately 338,000 people of Kuala Terengganu.” (StarBiz)

Naza TTDI’s listing agenda
Naza TTDI SB is eyeing a listing on the local bourse in the next 3-5 years to achieve its aim of becoming one of the largest property developers in the country. Deputy executive chairman-cum-group MD SM Faliq SM Nasimuddin said although internally the company was “all set to go”, it would be more prudent to wait for the right time to undertake the listing exercise. “We want to ensure the company realizes the right value from the listing and will wait for the right market conditions and external factors before proceeding,” Faliq told StarBiz. He said the local market would be quite challenging these few years given the high number of projects coming onstream, especially high-rise residential and commercial projects. To address the market uncertainties, Faliq said Naza TTDI would be launching projects with good demand including terrace houses, shop lots, and also its “bread and butter” township products. (StarBiz)

The government has awarded a contract worth as much as RM530m to China’s CSR Zhuzhou Electric Locomotive Co Ltd (CSR ZELC) to supply trains for the Ampang LRT extension project. CSR ZELC received the award to build and supply 20 sets of six-car LRT vehicles. The trains are meant to service the existing LRT network and the new line to Putra Heights. CSR ZELC is one of the major electric locomotive manufacturers in China and a subsidiary of China South Locomotive & Rolling Stock Corp Ltd. (BT)

The Selangor government has approved a RM5m allocation for a flood mitigation project in Klang town, MB Tan Sri Abdul Khalid Ibrahim said. He said the project was necessary taking into account the flash floods that hit Klang on March 30, namely in Kampug Delek, Telok Gadong, parts of Pandamaran, Kota Alam Shah, Selat Kelang and Taman Seri Andalas. "The state has found that more than RM20m is needed for flood mitigation in Klang alone and the RM5m is the initial allocation." he said. Khalid said the state government had also approved an allocation of RM3m to assist about 2,500 families affected by the floods, with each household getting RM500 (Star)

Asean countries should embrace full gas market liberalisation as the situation of subsidised gas prices that continue to distort the market is not sustainable in the long term, said International Gas Union (IGU) president Datuk Dr Abdul Rahim Hashim. Rahim warned that increasing reliance on liquefied natural gas (LNG) imports, which were based on market price, would leave South-East Asia's economies little option but to progressively increase gas prices to be near or at market parity in key gas consuming countries in this region. The IGU statement also said over the next five years, regasification projects in Asean countries such as Thailand, Malaysia, Singapore, Indonesia, and Vietnam were expected to deliver 37m tonnes per year of regasification capacity. (Starbiz)

The Securities Commission (SC) has approved eight private retirement scheme (PRS) providers. This marks a milestone in the country's development of a long-term sustainable private retirement industry, the SC said in a statement yesterday. The eight PRS providers are AmInvestment Management Sdn Bhd, American International Assurance Bhd, CIMB-Principal Asset Management Bhd, Hwang Investment Management Bhd, ING Funds Bhd, Manulife Unit Trust Bhd, Public Mutual Bhd, and RHB Investment Management Sdn Bhd. The SC said PRS providers were selected on the basis of their expertise in investment and/or pension fund management, experience in global pensions management, financial strength, governance structure and proposed business model. The approval of the PRS providers follows the release and announcement in December last year of the SC's "Eligibility Requirements for Private Retirement Scheme Providers", which stipulated the expectations and requirements for interested and qualified parties. The SC has issued the Guidelines on Private Retirement Schemes. (BT)

SapuraCrest Petroleum Bhd’s merger with Kencana Petroleum Bhd is expected to be completed by June. SapuraCrest and Kencana yesterday said they had mutually agreed with Sapura-Kencana Petroleum Bhd to extend the deadline to meet all merger conditions to May 31. They told Bursa Malaysia that the proposed disposal, capital reduction and repayment and share issue in relation to the merger are expected to be completed by June. (BT)

A price war in the synthetic rubber glove market would probably not materialise as growing demand from developed nations will be more than enough to offset the need to push prices dramatically down. Hartalega Holdings Bhd MD Kuan Kam Hon said, “The nitrile glove business should grow by 30% this year. Growth will continue in Europe because of the lower cost of nitrile.” Hartalega says they have problems meeting demand, illustrating that there is a shortage of nitrile gloves. Kuan added “The glovemakers will have better business while the new ones will find it challenging. It will take time for them to come into the nitrile business, build up their reputation and trust”. (Star Biz)

The Malaysian Rubber Export Promotion Council (MREPC) is turning its sights to new markets such as Russia and South America to boost the export value of rubber-based products. It wants local manufacturers to diversify their product mix to suit these non-traditional markets. To help clients and potential buyers to contact Malaysian producers online, the MREPC yesterday launched its marketplace website. (Sun)

Permodalan BSN Bhd (PBSN) has announced a gross distribution of 2.5 sen per unit for its Amanah Saham Bank Simpanan Nasional (ASBSN) and 1.5 sen per unit for its BSN Dana Al-Jadid (Jadid). It involves a payment of RM6.79m and RM2.55m respectively, it said yesterday. Based on the average selling price for the financial year 2011, the income distribution is equivalent to a gross yield of 6.70% for ASBSN and 5.84% for Jadid respectively. (BT)

Pre-qualification exercises for various tender packages relating to Petronas' refinery and petrochemical integrated development (RAPID) project in Pengerang, Johor will begin as early as 3Q12. Petronas completed a detailed feasibility study on the project in Oct 11. The US$20bn project is on schedule. (Edge Daily)

Land & General (L&G) is mulling ventures outside the Klang Valley. It is considering forays into Penang and Johor Baru as it looks to replenish its landbank. Managing director Low Gay Teck said the company would consider acquiring land either through outright purchase or through JVs with property owners. Other than property development, the company is also involved in oil palm cultivation and provision of education services. Low said the company had no plans at the moment to sell or develop its 2,500 acres of oil palm, or expand its oil palm business, which currently contributes less than 5% of total revenue. (Malaysian Reserve)

RAM Ratings downgraded the rating of Silver Bird Group's RM30m commercial papers or medium-term notes programme (CP/MTN) from C3/NP to D yesterday. At the same time, the ratings agency lifted its negative outlook rating watch on the group. The downgrade came after facility agent AmInvestment Bank's announcement through the fully automated system for issuing or tendering that Silver Bird had failed to redeem RM15m of its outstanding CP/MTN on the scheduled maturity date that was yesterday. (Starbiz)

Cahya Mata Sarawak Bhd's (CMS) recent decision to abort its plan to jointly develop a US$2bn (RM6.12bn) aluminium smelter with Rio Tinto Aluminium Ltd will preserve the group's coffers, according to RAM Ratings. However, RAM expects CMS to embark on new projects under the Sarawak Corridor of Renewable Energy and expand its current operations in a moderate pace. (BT)

RAM Ratings has upgraded the rating of Cahya Mata Sarawak's RM399.6m serial bonds and the conditional payment obligations of the facilitator bank, from A2 to A1. The rating upgrade was premised on the sustained improvement in CMS' financial results over the past five years. It said the rating had a stable outlook and pointed out that under the transaction structure, CMS assumed the risk of non-payment of the conditional payment obligations by the facilitator bank. (Starbiz)

TDM Bhd has received the state government's approval on the lease of land in Batu Burok to build and operate a new 130-bed specialist hospital. Chief executive officer Badrul Hisham Mahari said the new hospital will cost RM170.2m, excluding the cost of the lease of the land and incidental fees. "It will be financed by internally generated funds and/or bank borrowings, which the board has yet to decide," Badrul Hisham said after the company's shareholders meeting yesterday. Chairman Datuk Roslan Awang Chik said the new eight-storey hospital will replace the current Kuala Terengganu Specialist (KTS) hospital which is operating near maximum capacity. "The hospital, on a 23,424 sq m land, will be the city's flagship specialist hospital that will serve about 338k people of Kuala Terengganu," he said. (BT)

OldTown is setting up a new food processing centre in China as part of its expansion plan to penetrate the Chinese F&B market. The RM5m investment is part of a JV between OldTown (19%), its Hong Kong-based related party OldTown Asia Pacific (11%) and a Chinese company which holds OldTown's master franchise licence (70%). (Edge Daily)

CHATIME Malaysia plans to open another 50 outlets nationwide by the third quarter of this year, from the present 50 it already has. Chatime Malaysia managing director Bryan Loo said it expects to have at least 100 bubble tea outlets nationwide by year-end. "We are looking at expanding across Malaysia which includes Sabah and Sarawak as well," Loo told reporters after the launch of the BCARD and Chatime collaboration at a Chatime outlet in Bandar Puteri Puchong yesterday. "We hold the master franchise for Malaysia and we are also looking at buying the master franchise for two other countries soon," he said. Besides Malaysia, Chatime has over 700 retail outlets across the Asia Pacific region. (BT)

Operator of KSL Resort Johor Baru, one of Malaysia's biggest city hotels, says there is big potential for the hotel industry here. KSL Resort executive chairman Ku Hwa Seng said the city's average occupancy rate had increased from 68% two years ago to 78% last year. KSL Resort is having its soft opening today. The five-star resort hotel, built on top of the KSL Mall in Taman Century, will feature 868 rooms in two face-to-face 20-storey tower blocks. Of the total rooms, 596 are superior rooms, 239 are deluxe rooms and 33 are suites. The resort hotel also boasts the biggest restaurant seating 560 persons. It will also have a pillarless ballroom on the seventh floor to accomodate up to 1,000 people. Developed at a cost of RM200m by KSL Holdings Bhd, the hotel will be fully opened by May 15. Ku said the resort hotel formed part of the RM1bn development in the area, which also features the shopping mall, which was opened in December 2010, and an exclusive condominium called D' Esplanade Residence, scheduled for opening in the third quarter of this year. (BT)

Yung Kong Galvanising Industries Bhd’s unit Star Shine Marketing Sdn Bhd has signed a sale and purchase agreement with Kota Tropika Development Sdn Bhd to sell a plot of land in Klang for RM12.22m. (BT)

20120406 0948 Global Economy Related News.

The Federal Government's fiscal deficit is expected to dwindle to 4.7% of GDP this year, Deputy Finance Minister Donald Lim Siang Chai told the Dewan Rakyat yesterday. It was a reasonable target given the Federal Government's prudent spending and increasing revenue, he said. Fiscal consolidation efforts will be continued to bring down the fiscal deficit to less than 3% in 2015 as was pronounced in the 10th Malaysia Plan, he said. (Bernama)

China’s HSBC purchasing managers’ index for the services industry was 53.3 last month, compared with 53.9 in Feb. (Bloomberg)

China: Wen signals easing as yield drops to 11-month low
China’s one-year central-bank bill yield dropped to the lowest level in 11 months on speculation Premier Wen Jiabao will ease monetary policy to revive growth in Asia’s biggest economy. The yield declined 17bps last month to 3.31%, the fastest decline since Oct, compared with similar-maturity U.S. Treasuries that rose 1bps to 0.16%. Speculation that Wen will reduce banks’ reserve requirements or interest rates has increased since he said policy should be fine-tuned “as soon as possible” in comments reported 3 April by state media. [Bloomberg]

Taiwan: Inflation quickens, limiting scope for rate cuts
Taiwan’s consumer prices rose in March on costlier fuel, limiting the central bank’s scope to cut interest rates. The consumer-price index climbed 1.21% from a year earlier, compared with a revised 0.23% increase in Feb, the statistics bureau said in Taipei. Taiwan joined Asian nations including China and Vietnam in raising fuel prices this year as crude oil costs climbed. The island’s industrial output recovered in February for the first time in four months and exports rebounded, prompting the central bank to say it would focus on inflation after leaving borrowing costs unchanged for a third meeting on 22 March. [Bloomberg]

Japan passed a ¥90.3tr budget, with about half the spending expected to be financed by new bonds that will add to Japan's massive debt mountain. (AFP)

The upper house of Japan's parliament voted down the government's candidate, BNP Paribas Chief Economist Ryutaro Kono, for the central bank's interest-rate-setting policy board, looking instead for someone more supportive of further monetary easing. (WSJ)

Indonesia’s foreign reserves declined to US$110.5bn in Mar from US$112.2bn in Feb. (Bloomberg)

Indonesia’s government will launch market operations to contain inflationary pressure following the delayed rise in the prices of subsidized fuel oils that may increase the prices of commodities. (Antara News)

Thailand’s foreign reserves increased to US$179.2bn as at 30 Mar from US$170bn the previous week. (Bloomberg)

Thailand’s Mineral Fuels Department has put the opening of bidding for the 21st round of petroleum exploration concessions on hold for at least three months, as it wants to review details in regard to public information and participation. (The Nation)

Thailand’s natural gas production from domestic resources is expected to reach its peak next year to average between 3,600 and 4,000m cubic feet per day as new supplies come online. (Bangkok Post)

Thailand’s consumer confidence index decreased to 23 in Mar from 25.8 recorded in Feb due to concerns over the soaring living expenses among consumers. (Thai Financial Post)

UK: Manufacturing unexpectedly drops for second month
UK manufacturing output unexpectedly declined for a second month in Feb, indicating the economy’s return to growth may be uneven. Factory output fell 1% from Jan, the most since Apr last year, the Office for National Statistics said in London. Manufacturing, which accounts for 10% of the economy, was revised to a 0.3% decline in Jan from a 0.1% increase. Reports this week showed expansion in services, manufacturing and construction accelerated in March, suggesting the economy probably returned to growth in the first quarter. [Bloomberg]

EU: Monti labor market overhaul ready for parliamentary review
Prime Minister Mario Monti’s bill to overhaul the country’s labour market, his latest effort to spur Italy’s economic growth, will be sent to parliament today for review after President Giorgio Napolitano signed the draft law. Monti presented the bill yesterday after watering down some measures easing firing rules to secure support of his political allies in parliament. Mont backed away from his original goal of allowing companies to fire workers for economic reasons without fear of reinstatement, and in the draft labour courts will still have a limited right to reverse those dismissals. [Bloomberg]

ECB 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. (Bloomberg)

US: Payroll gain in US probably exceeded 200,000 for fourth month
Employers probably added more than 200,000 workers to payrolls in March for a fourth straight month as US companies gained confidence that sales will keep improving, economists said before a government report. Hiring increased by 205,000 after rising by 227,000 in Feb, according to the median projection of 80 economists surveyed by Bloomberg News. The last time employment advanced at a similar pace for as many months was late 1999 into 2000. The jobless rate probably held at a three-year low of 8.3%. [Bloomberg]

US: New York Fed Markets Group Chief Brian Sack to resign
Brian Sack, markets group chief at the Federal Reserve Bank of New York, is resigning this year after leading operations in implementing the central bank’s monetary policy since June 2009. Sack, 41, will remain at his current post until 29 June, the district bank said in a statement on its website. He will then be placed on leave until his resignation from the New York Fed effective 14 Sept, according to the statement. As head of the markets group, Sack oversaw the record expansion of the Fed’s balance sheet while policy makers turned to unconventional tools such as two quantitative-easing programs in the aftermath of the credit crisis. [Bloomberg]

The Federal Reserve took steps to encourage US banks to turn more foreclosed homes into rental properties in new policy guidelines issued that could help lessen the flood of distressed property sales that is depressing prices. (Reuters)

Data from Challenger showed US employers announced fewer job cuts as planned firing declined 8.8% yoy in Mar to a 10 month low of 37,880. (FT)

US President Barack Obama on Thursday signed into law a measure meant to create jobs by helping small firms raise capital. Obama and other lawmakers signed the Jumpstart Our Business Startups (JOBS) Act at the White House. (Channel News Asia)

US comparable chain store sales rose 4.1% yoy in Mar, unchanged from Feb. (Reuters)

20120406 0945 Global Market Related News.

Traders Eye 45-Minute Window After Good Friday Report (Source: Bloomberg)
Wedbush Securities Inc.’s Michael James will be up at 5:30 a.m. in Los Angeles tomorrow, even though equity markets are closed for a holiday and he doesn’t have to work. The reason for the early wake-up: jobs. While stock markets around the world are shut for Good Friday, the Labor Department will publish its monthly employment report at 8:30 a.m. New York time. Equity traders will have 45 minutes to react, as trading of futures linked to the Standard & Poor’s 500 Index and Dow Jones Industrial Average will continue until 9:15 a.m. on CME Group Inc. (CME)’s Chicago Mercantile Exchange. “It’s too important,” James, managing director of equity trading at Wedbush, said in a telephone interview on April 2. “People, whether they’re working or not, whether they’re on the buy-side or sell-side, are going to be paying attention to the number and the reaction in the futures.”
The U.S. economy added 205,000 jobs in March, according to the median estimate of 80 economists surveyed by Bloomberg before the report. That would be the fourth straight month employers added more than 200,000 workers, according to data compiled by Bloomberg.

Asian Stocks Drop as German Factory Slump Clouds Outlook (Source: Bloomberg)
Asian stocks fell for a second day, with the regional benchmark index headed for its biggest weekly drop this year, after German industrial output fell more than expected, fueling concern Europe’s economy is contracting and damping the outlook for export earnings. Sony Corp. (6758), which generates one fifth of its sales in Europe, lost 1.7 percent in Tokyo. Kobe Steel Ltd. led declines among makers of the material after posting a loss twice as big as forecast. Astellas Pharma Inc. rose 2.6 percent after the drug maker’s new treatment for overactive bladders won the backing of advisers to U.S. regulators.
The MSCI Asia Pacific Index fell 0.4 percent to 124.81 as of 9:21 a.m. in Tokyo, with about four stocks falling for each that rose. For the week, the measure is down 1.4 percent, the biggest weekly decline since the period ended Dec. 16. Markets in Hong Kong, Australia and Singapore are closed today for a public holiday. Volume on Japan’s main stock indexes was about 25 percent below the 30-day intraday average ahead of a jobs report in the U.S. today. “Europe’s economy faces a downside risk, and it remains to be seen whether it will spread across the world,” said Kazuyuki Terao, chief investment officer of RCM Japan Co. “It’s hard to buy today. The U.S. jobs data may be relatively strong, but we don’t know how the market will react to it.”

Japanese Stock Drop as Europe Debt Crisis Concern Flares (Source: Bloomberg)
Japanese stock futures declined as rising bond yields in Europe fueled concern the debt crisis has yet to be contained, overshadowing signs of improvement in the U.S. jobs market. American depositary receipts of Sony Corp. (6758) sank 1.2 percent from the closing share price in Tokyo as the euro weakened against the yen, crimping the earnings outlook for Japan’s exporters. Shares of Kobe Steel Ltd. (5406) may be active after the steelmaker posting a wider-than-expected loss. Inpex Corp. (1605) and other energy companies may advance after crude prices yesterday gained for the first time in three days. “In Europe, investors are starting to be conscious of the unsustainability of Spain’s debt and that’s weakening the euro against the yen,” said Juichi Wako, a senior strategist at Tokyo-based Nomura Holdings Inc.
Futures on Japan’s Nikkei 225 Stock Average (NKY) expiring in June closed at 9,715 in Chicago yesterday, compared with 9,790 in Osaka, Japan. They were bid in the pre-market at 9,720 in Osaka, at 8:05 a.m. local time. Markets in Australia, New Zealand and Hong Kong are closed today for a holiday.

Japanese Stock Futures Gain on U.S. Confidence, Spending (Source: Bloomberg)
Japanese stocks declined, with the Nikkei 225 Stock Average heading for its biggest weekly loss since August, as rising bond yields in Europe fueled concern the debt crisis has yet to be contained, outweighing improvement in the U.S. jobs market. Sony Corp. (6758), which depends on Europe for more than a fifth of its sales, lost 1.7 percent from after the euro weakened against the yen, crimping the earnings outlook for Japan’s exporters. Kobe Steel Ltd. (5406) sank 3.1 percent after posting a loss that was twice as big as forecast. NSK Ltd. (6471) fell 2.4 percent after the bearing maker’s equity rating was cut to “neutral” by Mito Securities Co. “Europe’s economy faces a downside risk, and it remains to be seen whether it will spread across the world,” said Kazuyuki Terao, chief investment officer of RCM Japan Co. “The U.S. jobs data may be relatively strong, but we don’t know how the market will react to it.”
The Nikkei 225 (NKY) fell 0.8 percent to 9,687.72 as of 9:16 a.m. in Tokyo, heading for a weekly drop of 3.9 percent. Volume on the gauge was more than 20 percent below the 30-day average. The broader Topix Index lost 0.9 percent to 825.03, with more than four times as many shares declining as advancing.

U.S. Stocks Fall as S&P 500 Has Worst Weekly Drop in 2012 (Source: Bloomberg)
U.S. stocks slid this week, giving the Standard & Poor’s 500 Index its biggest decline of the year, after the Federal Reserve signaled it will refrain from further monetary stimulus and concern about Europe intensified. Nine out of 10 S&P 500 industries retreated during the holiday-shortened week. Energy companies fell the most as Alpha Natural Resources Inc. (ANR) slumped 6.6 percent, leading the group to a 1.8 percent drop. SanDisk Corp. (SNDK) and Constellation Brands Inc. (STZ) tumbled at least 8.4 percent after providing disappointing forecasts. Apple Inc. jumped 5.7 percent, helping drive technology companies in the benchmark index to the longest string of weekly gains since at least 1989.
The S&P 500 fell 0.7 percent for the week to 1,398.08, after reaching the highest level since May 2008 on April 2. The Dow Jones Industrial Average lost 151.90 points, or 1.2 percent, to 13,060.14. While U.S. stocks markets are closed tomorrow for Good Friday, futures on the two indexes will trade for 45 minutes after the Labor Department’s monthly jobs report comes out at 8:30 a.m. New York time. “The Fed is taking QE3 a little bit off the table,” Jeffrey Kleintop, chief market strategist at LPL Financial Corp. in Boston, which oversees $350 billion, said in a telephone interview, referring to a third round of stimulus measures known as quantitative easing. “The market knows how the movie ends. It has seen it twice before and is worried we’re on the cusp of a 15 to 20 percent pullback.”

European Stocks Fall for Third Week as Spain Bonds Drop (Source: Bloomberg)
European stocks fell for a third week, the longest losing streak since August, as Spain’s rising borrowing costs boosted concern the euro-area has yet to contain its debt crisis, and the U.S. Federal Reserve damped expectations for further monetary stimulus. Banking shares led declines. Banca Popolare di Milano Scarl (PMI) and UniCredit SpA slid at least 12 percent each this week. Peugeot SA (UG) dropped 10 percent after a report showed U.S. sales of light vehicles rose less than forecast. Cairn Energy Plc (CNE) gained 3.7 percent after agreeing to buy Agora Oil & Gas AS to expand in the North Sea. The Stoxx Europe 600 Index (SXXP) declined 1.6 percent to 259.07 this week. The benchmark measure climbed 7.7 percent in the first quarter, its best performance during the first three months of the year since 2006, as the ECB disbursed 1 trillion euros ($1.3 trillion) in three-year loans to the region’s financial institutions and U.S. economic reports beat estimates.
“The fact that Spain is back in the news makes equity investors nervous about where we go from here,” said Peter Dixon, global equities economist at Commerzbank AG (CBK) in London. “So long as we have some kind of concern to worry about, there are going to be limits to which equities will be able to take off.”

FOREX-Euro wobbles on renewed periphery and econ worry
LONDON, April 5 (Reuters) - The euro hovered near a three-week trough against the dollar and could be in line for further losses prompted by a deteriorating economic outlook in the euro zone and a weak Spanish bond auction.
"If we continue to see Spanish yields pushing out, the euro should broadly come lower and I'm happy to stick with a short position for now, looking to take profit near $1.3000" said Jeremy Stretch, head of currency strategy at CIBC.

Euro Set for Biggest Weekly Drop in 7 Months on Debt Woes (Source: Bloomberg)
The euro headed for the biggest weekly drop against the yen in seven months as Spain’s rising borrowing costs fueled concern that the region has yet to contain its debt crisis. The 17-nation currency traded 0.2 percent from a three-week low versus the dollar before data next week that may show German exports fell and growth in French industrial production slowed, adding to evidence that the fiscal woes are hampering the region’s economies. Demand for the greenback was supported before a report today forecast to show U.S. payrolls increased by more than 200,000 workers in March for a fourth month, damping speculation the Federal Reserve will add new stimulus.
“We haven’t seen any major improvements in the European debt situation,” said Marito Ueda, senior managing director in Tokyo at FX Prime Corp. (8711), a currency-margin company. “After Greece, investors may be beginning to shift their focus onto countries like Spain, Portugal and Italy. I expect the euro will gradually sink as the region’s economy deteriorates.” The euro fetched 107.50 yen at 8:39 a.m. in Tokyo from 107.61 in New York yesterday, extending its decline this week to 2.8 percent, set for the steepest five-day slide since the week ended Sept. 9. The common currency was little changed at $1.3064, after sliding to $1.3035 yesterday, the weakest level since March 15. The dollar bought 82.29 yen from 82.37 yen.

Payrolls in U.S. Probably Expanded by 205,000 Last Month (Source: Bloomberg)
Claims (INJCJC) for U.S. unemployment benefits dropped last week to the lowest level in four years, adding to recent reports showing signs of health in the economy. Jobless claims fell 6,000 to 357,000 in the week ended March 31, the fewest since April 2008, the Labor Department reported today in Washington. The median forecast of 43 economists in a Bloomberg News survey estimated a decrease to 355,000. The number of people on unemployment benefit rolls also dropped, while those getting extended payments increased. The improved labor market, rising stock prices and easier credit are lifting U.S. consumer confidence and spending, which accounts for 70 percent of the economy. A report tomorrow may show the world’s largest economy added more than 200,000 jobs in March for a third consecutive month, the longest streak of similar increases since late 1999 to early 2000.
“The labor market is going to continue to gradually heal, though we have a long ways to go,” said Ryan Sweet, a senior economist at Moody’s Analytics Inc. in West Chester, Pennsylvania. “The economy is pulling up pretty well given the headwinds we’re seeing from Europe.”

Facebook Said to Pick Nasdaq Over NYSE for Stock Listing (Source: Bloomberg)
Facebook Inc. (FB) plans to list its shares on the Nasdaq Stock Market, further cementing the exchange operator’s position as the favored venue for the biggest U.S. technology companies, according to a person with knowledge of the matter. The person declined to be named because the discussions are private. Facebook filed for a $5 billion initial public offering on Feb. 1. While the market capitalization of New York Stock Exchange shares is about triple the value of Nasdaq companies, the latter market operator has about twice as many technology corporations trading for more than $1 billion, according to data compiled by Bloomberg. Exchange operators NYSE Euronext and Nasdaq OMX (NDAQ) Group Inc., rivals for virtually every IPO in America, competed for what may be the biggest listing by a technology company. Winning the IPO means more fees, a boost in trading revenue and the chance to link an exchange’s brand with the largest social-networking website in the world.

New York Fed Markets Group Chief Brian Sack to Resign (Source: Bloomberg)
Brian Sack, markets group chief at the Federal Reserve Bank of New York, is resigning this year after leading operations implementing the central bank’s monetary policy since June 2009. Sack, 41, will remain at his current post until June 29, the district bank said today in a statement on its website. He will then be placed on leave until his resignation from the New York Fed effective Sept. 14, according to the statement. As head of the markets group, Sack oversaw the record expansion of the Fed’s balance sheet while policy makers turned to unconventional tools such as two quantitative-easing programs in the aftermath of the credit crisis. Using bond purchases as a stimulus tool, the central bank expanded its assets to a record $2.94 trillion on Feb. 15. The Fed cut its benchmark interest rate to near zero in December 2008.
“Brian’s service to the bank over the past three years has been critical to our response to the financial crisis and the country’s economic recovery,” William C. Dudley, president of the New York Fed said in the statement. “I accepted his resignation with great regret and wish him well.”

Consumer Confidence Climbs as U.S. Job Market Improves: Economy (Source: Bloomberg)
Consumer confidence climbed last week to the highest level in four years and unemployment claims fell, pointing to a brighter job market that may invigorate the U.S. economy. The Bloomberg Consumer Comfort Index (COMFCOMF) rose to minus 31.4 in the period ended April 1, the best reading since March 2008, from minus 34.7 the prior week. Filings for jobless benefits dropped by 6,000 to 357,000 in the week ended March 31, the fewest since April 2008, the Labor Department said. Employers probably took on more than 700,000 workers in the first three months of this year, the best quarter for job growth since 2006, a report tomorrow may show, while equities rallied the most since 1998. The improvements may support consumer spending in the face of rising gasoline prices.
“There’s a gradual acceleration underway in the economy,” said Michael Englund, chief economist at Action Economics LLC in Boulder, Colorado, and the second-most accurate forecaster of unemployment applications. “Today’s claims data and confidence reading put a positive spin going into tomorrow’s payroll report,” he said, projecting 210,000 jobs were created in March.

End Double Mandate to Save Fed’s Independence (Source: Bloomberg)
There’s one prediction that can safely be made about the decision that the Supreme Court will render on the Affordable Care Act: The final vote will almost certainly be along party lines. The court’s progressive politicization in recent years is a natural reaction to the increasingly activist role it has adopted. As justices have weighed in on questions that were traditionally the province of elected officials -- such as abortion rights -- political institutions have fought back by making ideological orthodoxy a requirement for a Supreme Court appointment. What’s worse is that a similar dynamic is now occurring at another important U.S. institution: the Federal Reserve Board. In June 2011, Peter Diamond, a Nobel laureate in economics, was forced to withdraw his nomination because of Republican opposition in the Senate. True, his expertise isn’t monetary policy, but was he really so unqualified?
This politicization of the Fed reached a new peak in recent days, with at least one senator saying he would seek to block the confirmation of two new board nominees (one Republican and the other Democrat). I don’t know Jerome Powell (the Republican nominee), but I do know Jeremy Stein (the Democratic one) very well. Even if I don’t agree with him on everything, I couldn’t imagine a wiser, more competent and independent choice to serve at the Fed. So why does his nomination risk being thwarted?

Canada Adds Most Jobs Since 2008 as Full-Time Work Soars (Source: Bloomberg)
Canada added the most jobs since September 2008 last month, a gain dominated by full-time positions that revived what had been a stalling labor market in the world’s 10th largest economy. Employment rose by 82,300 following a decline of 2,800 in February, Statistics Canada said today in Ottawa, lowering the jobless rate to 7.2 percent from 7.4 percent. Economists surveyed by Bloomberg News projected a 10,500 gain in jobs and 7.4 percent unemployment, according to the median forecasts. Employment growth should add to household spending that the Bank of Canada said last month has been rising faster than expected. Governor Mark Carney said in an April 2 speech that high household debt loads and sluggish exports remain major risks to the expansion, and he has kept his key lending rate at 1 percent since September 2010 to boost demand.
“This was a blockbuster report,” said Mazen Issa, Canada macro strategist at TD Securities in Toronto. “There could be a slight tinge of hawkishness” in the central bank’s next interest-rate announcement on April 17, he said. Canada’s dollar strengthened 0.3 percent to 99.36 cents per U.S. dollar at 4:28 p.m in Toronto. One Canadian dollar buys $1.0066. Canada’s benchmark 2-year bond fell, with the yield rising 4 basis points to 1.26 percent.

China Hedge Fund Credence to Boost Stocks on QFII Quota (Source: Bloomberg)
Credence Oriental Trade Enterprise Ltd. (CRDOTPL), a China hedge fund that has beaten 98 percent of its rivals, will boost its Chinese stock holdings on the prospect of economic expansion and increased equity purchases by foreigners. Credence is increasing the percentage of yuan-denominated A shares and Hong Kong-listed H shares it holds in its portfolio to 70 percent from 50 percent, while reducing bets on commodities, Tom Tang, co-manager of the China-domiciled fund, said in a phone interview from Hong Kong on April 4. Credence, which has 211 million yuan ($33.6 million) in assets, has returned 29 percent in the past three years, outperforming 1,203 China-focused funds, according to data compiled by Bloomberg. “Equities will be our major investment in the future,” said Tang, 39, who is based in Shenzhen. “There’s less variety in commodities and we want a more diversified portfolio.”
The Shanghai Composite Index (SHCOMP) has risen 4.7 percent this year on speculation the government will ease monetary policies and take measures to prevent stocks from slumping for a third year. The China Securities Regulatory Commission announced on April 3 that it increased quotas for qualified foreign institutional investors to $80 billion from $30 billion, spurring the biggest gains for the benchmark stocks measure in three weeks. “This is good news for the stock market,” said Tang. “It will increase trading of blue-chip stocks and improve valuations.”

Chinese Export Machine Upgraded as Cranes Replace Toys (Source: Bloomberg)
From a sprawling manufacturing base deep in China’s southwestern Hunan province, some 100 kilometers from where Mao Zedong was born, construction-machinery maker Sany Group (SANYIZ) plans to take on the world. While workers in blue overalls and yellow hard hats crawl over cranes and cement mixer trucks in a gleaming factory, Sany President Tang Xiuguo sits nearby, discussing the opening of factories in Brazil, India, and Alabama and the $475 million acquisition of a German maker of cement pumps, Putzmeister Holding GmbH. Tang, a founder of the 22-year-old company, aims to lift overseas sales, now some 5 percent of its $16 billion revenue, to up to one-fifth of revenues within five years.
China’s export business, which increased 17 percent a year over the last three decades on plastic toys, cheap shoes, and electronics assembled by companies such as Foxconn Technology Group, is changing fast, Bloomberg Businessweek reports in its April 9 edition. Rising labor costs, up 15 percent annually since 2005, plus the yuan’s 30 percent gain since a peg to the dollar was scrapped that year, are putting new pressures on the nation’s cheap manufacturing model and driving textile, shoe, and apparel factories to close or relocate to Vietnam, Cambodia, or Bangladesh. “China’s share of the world’s low-end exports has started to fall. This reflects a shift by Chinese producers into sectors where margins are higher rather than a failure to compete,” U.K.-based Capital Economics said in a March 28 note.

Morgan Stanley Sees Japan Stimulus Ahead as BOJ Nominee Blocked (Source: Bloomberg)
The Bank of Japan may expand stimulus this month after lawmakers escalated pressure for extra action by blocking a candidate for the bank’s board and renewing calls for a more “proactive” monetary policy. Morgan Stanley MUFG Securities Co., Mizuho Securities Co. and SMBC Nikko Securities Inc. predict that the BOJ will expand asset purchases at a meeting on April 27. Parliament’s upper house yesterday rejected BNP Paribas SA economist Ryutaro Kono, described by Goldman Sachs Group Inc. (GS) as holding similar views to Governor Masaaki Shirakawa, who says that monetary policy alone cannot solve deflation. The central bank may stand pat at a two-day meeting ending April 10, preserving ammunition for later in the month, when price projections will show a goal of 1 percent inflation is not in sight, according to Morgan Stanley.
“The BOJ must be struggling to balance between responding to political requests and operating effective monetary policies,” said Akio Makabe, an economics professor at Shinshu University in central Japan.

U.K. Manufacturing Unexpectedly Drops for Second Month: Economy (Source: Bloomberg)
U.K. manufacturing output unexpectedly declined for a second month in February, indicating the economy’s return to growth may be uneven. Factory output fell 1 percent from January, the most since April last year, the Office for National Statistics said today in London. The median forecast of 24 economists in a Bloomberg News survey was for an increase of 0.1 percent. Manufacturing, which accounts for 10 percent of the economy, was revised to a 0.3 percent decline in January from a 0.1 percent increase. Reports this week showed expansion in services, manufacturing and construction accelerated in March, suggesting the economy probably returned to growth in the first quarter. Still, the British Chambers of Commerce said the recovery remains “weak.” The Bank of England maintained emergency stimulus for the economy at a meeting today.
“The U.K. recovery is not to be taken for granted,” said Blerina Uruci, an economist at Barclays in London. “We maintain our view that the economy will remain fragile during the first half of the year before gaining strength during the second half.”

King’s Stimulus Affirmed as BOE Readies QE Debate in May (Source: Bloomberg)
Bank of England Governor Mervyn King and his committee voted 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,” the panel backed finishing their 325 billion pounds ($516 billion) of quantitative easing. 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.
“Attention now turns to the May meeting, which is certainly a live one,” said David Tinsley, chief U.K. economist at BNP Paribas SA in London and a former Bank of England official. “The committee may not feel particularly moved to change its view that the risks around the inflation target are ‘broadly balanced.’ Still, it remains a close call.”

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.”

U.S. to Ease Myanmar Restrictions, Ending Isolation (Source: Bloomberg)
Myanmar, once the world’s largest rice exporter, is set to re-engage with the global economy in a boost to Southeast Asian growth as the U.S. prepares to ease some sanctions. Secretary of State Hillary Clinton said yesterday the U.S. will selectively lift restrictions on investment in Myanmar, after this month’s elections allowed democracy advocate Aung San Suu Kyi to win a seat in parliament. This week, leaders from the Association of Southeast Asian Nations, or Asean, called for the U.S. and Europe to end sanctions. The opening of Myanmar’s economy, one of Asia’s last untapped frontier markets, may give investors and neighboring countries access to its mineral wealth and a market of 64 million people after decades of military rule. The nation bordering China and India has won support for its efforts to attract investment by holding elections and overhauling its financial system, including a managed float of its currency.
“Myanmar’s opening is the creation of a whole new consumer market and that cannot be but good for the rest of the region,” Rodolfo Severino, former secretary general of Asean, said in Singapore today. “There are opportunities for investment, but we have to see if the measures are sustained. The U.S.’s lifting of sanctions may be followed by other countries and that is important.”

20120406 0945 Global Commodities Related News.

GRAINS-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.

EU clears 140,600T U.S. wheat imports, exhausts quota
PARIS, April 5 (Reuters) - The European Union awarded licences to import 140,600 tonnes of U.S. wheat under its tariff-rate quota (TRQ) this week, thereby exhausting the annual quota for 572,000 tonnes, official data showed.  
U.S. wheat has been very competitive against European origins in recent months with the price advantage currently pegged at around $30 a tonne.

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.

Old-crop corn futures finished well off their daily highs but with slight gains. New-crop futures ended high-range with gains of around 6 to 7 cents. Corn futures ended higher for the week. An early start to spring has many farmers itching to get in the fields, but a crop insurance limit on the earliest planting date has kept many out of the fields. (Source: CME)

US corn stocks seen dropping to 16-year low
April 5 (Reuters) - U.S. corn supplies are expected to fall to a fresh 16-year low before the fall harvest, said analysts polled by Reuters, signaling there will be razor-thin supplies this year that could stoke food inflation and hurt margins for food companies.
Analysts expect USDA next week to cut ending stocks by 10 percent from its March estimate due to increased demand for feed and ethanol in the wake of a severe drought reducing supplies in South America.

Corn Market Recap for 4/5/2012  (Source: CME)
May Corn finished up 1 1/2 at 658 1/4, 5 off the high and 3 1/2 up from the low. July Corn closed up 1 1/2 at 652 1/4. This was 3 3/4 up from the low and 5 1/4 off the high. May corn ranged higher today and in turn spent a lot of time in positive ground. Clearly the market got a boost from better than expected export sales data. In fact, weekly export sales for corn came in at 937,600 metric tonnes for the current marketing year and at 185,100 for the next marketing year for a total of 1,122,700 which was considerably higher than trade expectations. Cumulative corn sales stand at 78.9% of the USDA forecast for 2011/12 (current) marketing year versus a 5 year average of 74.6%. Sales of 409,000 metric tonnes are needed each week to reach the USDA forecast. Outside market forces started out as a potential drag but favorable US scheduled data and a recovery attempt in US equities shifted a possible risk-off day into a partial risk on day. Apparently the corn market wasn't overly impacted because of adverse currency market action today. New crop December corn continued to gain against old crop but a freeze threat in the upper Midwest is something that could offer up a surprise into the Monday opening. At least into the close today, the trade wasn't expressing significant concern toward the cold front due in Thursday night but that could make next weeks cold threat a little more important. May Rice finished up 0.14 at 15.045, equal to the high and 0.095 up from the low.

US farmers resist temptation to rush corn planting  (Source: CME)
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 W edn esday. "Monday's numbers from USDA certainly showed 'some' early planting but the dam has not broken yet. The short-term weather forecast is favorable in terms of no expected heavy rains, but a cool off in temps may dampen some spirits," Robert Nielsen, a state extension corn specialist with Purdue University in Indiana, told Thomson Reuters online ags forum.

US corn stocks seen dropping to 16-year low  (Source: CME)
U.S. corn supplies are expected to fall to a fresh 16-year low before the fall harvest, said analysts polled by Reuters, signaling there will be razor-thin supplies this year that could stoke food inflation and hurt margins for food companies. Analysts expect USDA next week to cut ending stocks by 10 percent from its March estimate due to increased demand for feed and ethanol in the wake of a severe drought reducing supplies in South America.

Wheat futures staged a choppy day of trade at all three exchanges, but market bears gained momentum into the close. Chicago wheat posted slight losses for the week. The winter wheat crop is off to a quick and favorable start. Recent state-by-state crop condition reports have shown improvement over year-ago. (Source: CME)

Wheat Market Recap Report  (Source: CME)
May Wheat finished down 3/4 at 638 1/2, 11 1/2 off the high and 2 1/2 up from the low. July Wheat closed down 3 1/2 at 646 1/4. This was 1 1/4 up from the low and 12 3/4 off the high. May wheat opened higher and ended up spending a large amount of time in positive ground. Wheat might have garnered some spillover support from strength in rapeseed prices and perhaps some minor lift from noted gains in energy and metals prices. Outside market forces started out as a potential drag to wheat today but favorable US and Canadian scheduled data flows and a recovery attempt in US equities seemed to shift a possible risk-off day into a partial risk on day and that helped many physical commodity markets. Net weekly export sales for wheat came in at 408,300 metric tonnes for the current marketing year and 103,400 for the next marketing year for a total of 511,700. Cumulative wheat sales stand at 94.9% of the USDA forecast for 2011/2012 (current) marketing year versus a 5 year average of 93.0%. Sales of 153,000 metric tonnes are needed each week to reach the USDA forecast. The sales were towards the upper end of trade expectations and may have contributed to the stronger opening. The market has traded either side of unchanged this morning and has remained within the lower 2/3rds of yesterday's range. A modest recovery in the stock market lends some outside market support, but the stronger dollar is a mitigating factor. Egypt bought 115,000 tonnes of US soft red winter wheat for May 21-31st shipment. Private exporters reported sales of 138,900 tonnes of mixed varieties of wheat for the next marketing year to unknown destinations, including 68,050 tonnes of hard red winter wheat, 40,000 tonnes of soft white, 28,450 tonnes of hard red spring wheat and 2,400 tonnes of durum. Tunisia is tendering to buy 75,000 tonnes of soft wheat and 25,000 tons of durum. 04/05/12 May Oats closed up 2 at 337. This was 2 up from the low and 3 off the high.

EU clears 140,600T U.S. wheat imports, exhausts quota  (Source: CME)
The European Union awarded licences to import 140,600 tonnes of U.S. wheat under its tariff-rate quota (TRQ) this week, thereby exhausting the annual quota for 572,000 tonnes, official data showed. U.S. wheat has been very competitive against European origins in recent months with the price advantage currently pegged at around $30 a tonne.

Wheat ticks up after losses, market eyes crop-weather  (Source: CME)
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.

Indonesian roasters seek Vietnam coffee on supply worry
SINGAPORE, April 5 (Reuters) - International trading houses have started offering higher-grade Vietnamese robusta to Indonesian roasters who are struggling to get beans from the local market despite the current harvest, dealers said on Thursday.
Indonesian robusta was offered at a hefty premium of more than $200 above London futures for prompt delivery.

Brazil cocoa arrivals buoyant as season ebbs
SAO PAULO, April 4 (Reuters) - Higher-than-usual cocoa deliveries to warehouses in Brazil over the past few weeks from local farms and imports are pushing arrivals close to last year's levels as the season draws to a close in April.
Arrivals of all producing regions from Brazil totaled 28,456 tonnes in the last week, up almost 88 percent compared with the 15,123 tonnes in the same period of the last season.

Cotton futures posted sharp losses for the week to bring the market near its March lows. Violation of these March lows in the nearby contracts could trigger sell stops. Traders returned their focus to the plentiful global stocks situation this week, which weighed on prices. Adding to bearish attitudes was this morning's Weekly Export Sales Report, which showed net sales reductions of 143,700 running bales due to cancellations by China and Brazil.  (Source: CME)

Oil Rises for First Time in Three Days on Jobless Claims (Source: Bloomberg)
Oil gained for the first time in three days as claims for U.S. unemployment benefits dropped to a four-year low and equities pared losses, raising hopes that demand will grow in the world’s leading user of crude. Futures rose 1.8 percent, completing the first weekly gain since March 9, after the Labor Department said jobless claims fell 6,000 to 357,000 in the week ended March 31 and the Standard & Poor’s 500 Index rebounded from a 0.4 percent decline. Trading is closed tomorrow for Good Friday. “Crude is showing resilience and we have support from the jobs report,” said Tom Bentz, a director with BNP Paribas Prime Brokerage Inc. in New York. “Traders are not willing to be short over the long weekend.” Crude for May delivery gained $1.84 to settle at $103.31 a barrel on the New York Mercantile Exchange. Prices rose 29 cents this week. The price ranged from $101.37 to $103.40.
Brent oil for May settlement rose $1.09, or 0.9 percent, to $123.43 a barrel on the London-based ICE Futures Europe exchange. Brent’s premium to WTI narrowed 75 cents to $20.12 a barrel after widening for six days in a row.

Japan's Hokkaido Gas to get 1st LNG cargo delivery
TOKYO, April 5 (Reuters) - Japanese gas supplier Hokkaido Gas  expects to take delivery of a first liquefied natural gas tanker at its new Ishikari LNG terminal on Oct. 7, ahead of the December start of the facility's commercial operations, the company said.
The cargo of LNG from Russia's Sakhalin would be supplied by Tokyo Gas  under a term deal.

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.
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.

Japan refiners deepen Iran crude import cuts
SINGAPORE/TOKYO April 4 (Reuters) - Japanese refiners will cut Iranian crude imports yet again in April as they shy away from renewing annual contracts, showing continued commitment to U.S.-led sanctions over Tehran's nuclear programme.
Japan, the world's third largest oil consumer, has strongly backed calls to cut Iranian oil imports and earlier reductions were hailed by its top business and military ally, the United States, as an example to other countries.

OIL- Brent rises above $123 on supply disruption fears
SINGAPORE, April 5 (Reuters) - Brent crude rose above $123 a barrel, after sharp falls in the previous session, lifted by growing concerns over Iranian supplies being disrupted due to Western sanctions.
"Oil markets are supported by supply issues and some short covering, because demand fundamentals are not that strong,"  said Ken Hasegawa, a commodities derivatives manager at Newedge brokerage in Tokyo.

JPMorgan Hedges Silver for Clients, Masters Says on CNBC (Source: Bloomberg)
JPMorgan Chase & Co. (JPM) mostly hedges silver for clients, and large speculative bets aren’t “part of our business model,” Blythe Masters, the bank’s head of global commodities, told CNBC. Market participants “don’t see all our activity,” and bloggers have “a misunderstanding of the nature of our business,” Masters said today in an interview on CNBC. There is “an underlying client position” involved in hedge or forward trades, she said on CNBC. A multiyear investigation into the possibility of unlawful acts in the silver market is continuing after regulators analyzed more than 100,000 documents, the U.S. Commodity Futures Trading Commission said in November. Silver futures for May delivery rose 2.2 percent to close at $31.73 an ounce today. The price has dropped 36 percent from a 31-year high of $49.845 on April 25, 2011.
JPMorgan, based in New York, and HSBC Holdings Plc were sued in October 2010 by investors, including Peter Laskaris, who alleged that starting in March 2008, the banks manipulated silver in futures and options, partly by placing so-called spoof trading orders. The banks reduced their collusive trading and their holdings in futures market after a government investigation began in 2008, according to the complaint by Laskaris.

Copper Advances as Signs of U.S. Growth Point to Higher Demand (Source: Bloomberg)
Copper climbed for the first time in three days as reports showing an improving labor market and rising consumer confidence added to signs of recovery in the U.S., the world’s second-biggest consumer of the metal. Claims for unemployment benefits fell last week to the lowest in four years, Labor Department figures showed today. The Bloomberg Consumer Comfort Index increased last week to the highest in four years as brighter job prospects and an advancing stock market bolstered Americans’ view of the economy. “The outlook for copper is quite constructive,” William O’Neill, a partner at Logic Advisors in Upper Saddle River, New Jersey, said in a telephone interview. “The U.S. is doing well, and China’s economy may be better than people think.” Copper futures for May delivery rose 0.1 percent to settle at $3.7955 a pound at 1:20 p.m. on the Comex in New York. Yesterday, the metal slid the most since Dec. 14 after the Federal Reserve damped expectations for more economic stimulus.
A report tomorrow may show payrolls in the U.S. increased by more than 200,000 workers for a fourth month, based on the median estimate in a Bloomberg survey of economists.

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 today for a 20th 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.”

20120406 0944 Soy Oil & Palm Oil Related News.

Reuters Survey :
Malaysia MPOB Mar 2012 Crude Palm Oil
- Exports seen up 5.7% at 1.28 million tonnes from Feb 2012
- Stocks seen down 3.5% at 1.99 million tonnes from Feb 2012
- Output seen up 2% at 1.21 million tonnes from Feb 2012

Soybeans Rise on Signs of Tighter Supplies; Corn Prices Advance (Source: Bloomberg)
Soybeans advanced, rising for the second week, on speculation that smaller South American harvests will spur demand for U.S. inventories. Corn gained. Brazil’s soybean crop may fall to 66 million metric tons, below the U.S. Department of Agriculture’s official forecast of 68.5 million and 75.5 million harvested last year, the USDA’s Foreign Agricultural Service said in a report yesterday. In the week ending March 29, U.S. exporters sold 1.11 million tons of soybeans, up 88 percent from a week earlier, USDA data show. “The market is still adjusting to shrinking crops in Brazil,” Jim Gerlach, the president of A/C Trading Co. in Fowler, Indiana, said in a telephone interview. “Export sales show a global shift to buying more U.S. soybeans.”
Soybean futures for May delivery rose 1 percent to close at $14.34 a bushel at 1:15 p.m. on the Chicago Board of Trade. The oilseed advanced 2.2 percent this week. Earlier, the price matched the April 3 peak at $14.3425, the highest for a most- active contract since Sept. 7. The commodity has gained 19 percent this year after hot, dry weather cut yields in Brazil and Argentina, the world’s biggest growers after the U.S.

Soybeans Poised for Second Weekly Gain on Brazilian Crop (Source: Bloomberg)
Soybeans rose in Chicago, heading for a second weekly gain, on speculation global harvests may be lower than estimated as crop losses caused by drought worsen in South America, spurring demand for U.S. supplies. Brazil’s soybean crop will probably reach 66 million metric tons, below the U.S. Department of Agriculture’s official 68.5 million-ton forecast, agricultural attaché Jeff Zimmerman said in a report posted yesterday on the agency’s Foreign Agricultural Service website. The South American country is the second-largest producer after the U.S. “There’s still some potential to the upside” for futures, Tetsu Emori, a commodity fund manager at Astmax Co., said by phone from Tokyo today. “We’re still seeing some downgrade in production in South America.” Soybeans for May delivery climbed 0.2 percent to $14.2275 a bushel on the Chicago Board of Trade by 1:14 p.m. London time. The oilseed is up 1.4 percent for the week. The exchange will be closed tomorrow for Good Friday.
The USDA is scheduled to update production forecasts for soybeans and other crops on April 10.

Old-crop soybean futures led gains today and finished near weekly highs. New-crop futures posted lesser gains today and finished off weekly highs, although solidly higher for the week. While fundamentals are strong and attitudes are bullish, soybean futures could face profit-taking pressure Monday as traders gear up for Tuesday's Supply & Demand Report from USDA.  (Source: CME)

Soybean Complex Market Recap  (Source: CME)
May Soybeans finished up 14 1/2 at 1434, 1/4 off the high and 19 1/4 up from the low. July Soybeans closed up 14 at 1437 3/4. This was 18 3/4 up from the low and equal to the high. May Soymeal closed up 3.7 at 391.9. This was 4.3 up from the low and 1.2 off the high. May Soybean Oil finished up 0.62 at 56.64, 0.04 off the high and 0.82 up from the low. May soybeans opened higher today and almost managed a fresh upside breakout on the charts. Some bears might suggest that the market has forged a quasi triple top but in the short term the technical condition of the market might take a back seat to the fundamentals. Not surprisingly the soy complex continues to recover nicely from yesterday's sell off, as the classic fundamental outlook is strong in the wake of last week's bullish acreage and grain stocks reports. The market clearly got a boost from better than expected export sales in beans and meal this morning and with weekly export sales for soybeans today coming in at 406,900 metric tonnes for the current marketing year and at 706,000 for the next marketing year the sales today were a big assist to the bull camp. In fact, a total export sale of 1,112,900 is a really strong number that was well above trader expectations and that could make next Tuesday's report even more important. Cumulative soybean sales stand at 91.4% of the USDA forecast for 2011/2012 (current) marketing year versus a 5 year average of 91.8%. Sales of 134,000 metric tonnes are needed each week to reach the USDA forecast. Meal sales came in at 174,000 metric tonnes for the current marketing year and 700 for the next marketing year for a total of 174,700, also above expectations. Cumulative meal sales stand at 71.0% of the USDA forecast for current marketing year versus a 5 year average of 69.4%. Sales of 88,000 metric tonnes are needed each week to reach the USDA forecast. Oil sales showed net cancellations of 3,500 metric tonnes, all for the current marketing year, which was disappointing against expectations. Cumulative soybean oil sales stand at 61.4% of the USDA forecast for current marketing year versus a 5 year average of 63.1%.

VEGOILS-Palm oil inches up, Europe debt worry weighs
SINGAPORE, April 5 (Reuters) - Malaysian palm oil futures edged up as a tighter soybean supply may shift more demand for the tropical oil, although gains were limited as a weak Spanish bond sale raised new fears about the Europe debt crisis.
"The market is trading in a very tight range after a strong rally. On the local front, market players are looking out for April export numbers next week," said a trader with a foreign commodities brokerage in Malaysia.

Brazil 11/12 soybean output down on drought
April 4 (Reuters) - Following are selected highlights from a report issued by a U.S. Department of Agriculture attache in Brazil:
"Post estimates drought-reduced soybean production in 2011/12 at 66 million tonnes on 25 million hectares and exports at 29 million tonnes. The La Nina weather phenomenon brought a significant drought to southern Brazil resulting in an 11 percent reduction in 2011/12 crop from earlier estimates of 75 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. The firm cut its Argentine soy crop forecast to 45 million tonnes, from 47.5 million previously.

India's April-March oilmeal exports rise 8 pct
MUMBAI, April 4 (Reuters) - India's oilmeal exports in fiscal 2011/12 rose 8 percent on year to 5.48 million tonnes on strong demand from traditional buyers like Japan, Vietnam and South Korea, a leading trade body said on Wednesday.
Exports in March stood at 575,972 tonnes against 579,907 tonnes a year ago, the Solvent Extractors' Association of India (SEA) said in a statement.

Malaysia has three main policy options to counter the lower Indonesian palm oil export tax structure introduced in September last year, according to UK-based LMC International Ltd chairman Dr James Fry. He said the first option would be for Malaysia to continue its current policy while increasing its crude palm oil (CPO) export quotas slowly. However, it was too late for diplomatic pressure to persuade the Indonesian government to dismantle its array of export incentives for the downstream industry. Another option is to match in full the incentives provided by the Indonesian export tax system by adapting Malaysia current CPO export tax rules to offset the advantages enjoyed by Indonesia exporters via its export tax system. "This reform, however, will not be politically popular since among is implication would be an extra tax of 20% on smallholders revenue in relation to their current selling prices," Fry said. The final option would be to focus on the biggest loser both in tonnage and volume - the local palm oil refiners - from the new Indonesian export tax. "The Government can focus on the policy that will support the margins of local refiners whereby it could apply a graduated export tax on CPO, increasing it to 9% to match Indonesia's gap." Fry thinks that export tax of 4% to 5% will be enough to support the margins of local refiners. (StarBiz)