Thursday, April 12, 2012

20120412 1811 FCPO EOD Daily Chart Study.

FCPO closed : 3559, changed : -54 points, volume : higher.
Bollinger band reading : correction range bound upside biased.
MACD Histogram : turned downward again, buyer taking profit.
Support : 3550, 3500, 3470, 3450 level.
Resistance : 3620, 3650, 3700, 3720 level.
Comment :
FCPO closed recorded loss with firmer volume transacted. Soy oil price currently trading little higher after overnight dropped nearly 1% while crude oil price currently trading higher.
Lower soy oil price pressure FCPO to trade lower while traders decided to lock in profit reducing exposure after recent price surged.
Daily chart study revised to calling a correction range bound upside biased market development.
When to buy : buy at support or weakness with quick cut loss and profit target.
When to sell : sell at resistant or strength with quick cut loss and profit target.

20120412 1738 FKLI EOD Daily Chart Study.

FKLI closed : 1593 changed : +2.5 points, volume : higher.
Bollinger band reading : correction range bound upside biased.
MACD Histogram : turned upward, buyer seller battling.
Support : 1590, 1580, 1570, 1565 level.
Resistance : 1595, 1600, 1610, 1620 level.
Comment :
FKLI closed firmer with increasing volume participation doing 8 points discount compare to cash market that closed higher above 1600 level. Overnight U.S. markets closed rebounded higher after Tuesday severe fall and today Asia markets closed higher while European markets trading little higher.
Global market rebounded today on hope of China easing monetary policy and after U.S. Federal Reserve economy continues growth outlook.
Technical chart analysis adjusted to suggesting a correction range bound upside biased market development.
When to buy : buy at support or weakness with quick cut loss and profit target.
When to sell : sell at resistance or strength with quick cut loss and profit target.

20120412 1713 Regional Markets EOD Daily Chart Study.

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

20120412 1602 Global Market & Commodities Related News.

Euro firms, shares dip as Europe debt worry lingers
TOKYO, April 12 (Reuters) - Asian shares eked out small gains and the euro steadied, reflecting investor caution over sovereign funding for troubled euro zone economies Spain and Italy, despite their declining yields that helped global equities rebound overnight.
"The Nikkei is up on a technical rebound after prices fell  to bargain levels, but until investors start focusing on earnings from last fiscal year, European debt worries will continue to weigh and dictate market direction," said Tetsuro Ii, the president of Commons Asset Management in Tokyo.

FOREX-Yen off highs after ECB calms markets; Aussie jumps
TOKYO, April 12 (Reuters) - The safe-haven yen pulled away from multi-week peaks against major currencies on Thursday after the European Central Bank official hinted at the possibility of more bond-buying, but an upcoming Italian debt sale posed more risks to jittery markets.
The Australian dollar shot up more than half a percent against the dollar and the yen after unexpectedly strong local employment figures eased worries the Australian economy could suffer from slower global growth.

US wheat rises for 2nd day on cold weather, corn firm
SYDNEY, April 12 (Reuters) - Chicago wheat rose for a second straight day, supported by cold weather which is threatening the newly sown spring wheat in the United States and some of the more mature winter crop.
"Given where we've come off from in wheat, you could blame people for taking a little bit of risk protection in case it (cold weather) does occur," said Brett Cooper, a senior manager of markets at FCStone Australia.

World 2011/2012 coffee output seen down 2.4 pct y/y-ICO
HANOI, April 12 (Reuters) - World coffee production in the current 2011/2012 crop year will fall 2.4 percent to nearly 131 million bags mainly due to lower production following adverse weather in key growing regions, the International Coffee Organization (ICO) said.
The estimate by the London-based organisation in its March report seen by Reuters on Thursday is slightly higher than its earlier forecast in February.
Foodmakers seek 1 mln-ton boost in US sugar quota
WASHINGTON, April 11 (Reuters) - The U.S. sugar import quota should be increased by 1 million tons, or nearly double the current quota, to relieve tight supplies that are being made worse by a poor crop in Mexico, a foodmakers group said on Wednesday.
The Sweetener Users Association, which represents food and beverage companies including candy makers, made its request in a letter to Agriculture Department officials, who were barred by law from changing the quota before April 1.
Brazil sugarcane gets needed rain, more looms
SAO PAULO, April 11 (Reuters) - Rain fell over nearly all of Brazil's main center-south sugar cane region over the past week, alleviating much of the crop stress stemming from dry weather in March, local meteorologists Somar said on Wednesday.
Brazil's 2012/13 cane crop that begins harvest in April is forecast to recover from last year when output declined for the first time in 11 years due to bad weather and a lack of replanting.

India, Pakistan rice supplies to ease agflation fears
SINGAPORE, April 11 (Reuters) - A rebound in rice supply from India and Pakistan this year will calm fears over food inflation faced by poor nations as cheaper grain from the South Asian neighbours corners a third of the global market.
South Asia's ample grain stocks will help it undercut key traditional suppliers, as a populist scheme in Thailand prices its grain out of competition and high export floor prices in Vietnam deter some buyers.

Brent steady at $120 ahead of Iran talks; Fed comments weigh
SINGAPORE, April 12 (Reuters) - Brent crude held steady at $120 as supply disruption worries eased with Iran saying it would present new proposals in the upcoming nuclear talks with world powers, reversing some of the previous session's gains.
"At the end of the day, Iran is also worried about its exports, about being able to do business with other countries. They need to maintain their budget, otherwise they cannot survive," said Tetsu Emori, a Tokyo-based commodities fund manager at Astmax Investments.

Shell, Asian partners in final talks on Canada LNG plant
BANGALORE/TOKYO, April 12 (Reuters) - Royal Dutch Shell Plc, Mitsubishi Corp, China National Petroleum Corp and Korea Gas Corp are in the final stages of talks to build a $12.35 billion liquefied natural gas (LNG) terminal on Canada's west coast, which would be the third such project aimed at meeting demand from Asia.
The plant near Kitimat, British Columbia, aims to benefit from rising supplies due a boom in shale gas production in Canada, Japan's Nikkei business daily reported on Thursday.

Novelis sees China aluminium demand growing 8 pct
CHANGZHOU, CHINA, April 11 (Reuters) - China's aluminium demand is expected to grow at an average annual clip of around 8 percent over the next five years, underpinned by a rapid expansion of its auto sector that will use more of the lightweight metal to boost fuel efficiency, Novelis Inc  said on Wednesday.
To get closer to its top customer, the aluminium products maker is building a $100 million aluminium rolling facility in China which will cater to the local auto industry, where the firm already has a list of clients including Audi, BMW and General Motors.

Copper bounces off $8,000 support, ECB comment boosts
SHANGHAI, April 12 (Reuters) - London copper rose above its technical support at $8,000 as prospects of the European Central Bank buying more bonds helped ease concerns about Europe's debt crisis.
&#8220The scale of market pressure on Spain is not justified given the reforms being undertaken by its government and the ECB still has its bond-buying programme as an option, ECB Executive Board member Benoit Coeure said on Wednesday.

China crude steel output rises 12 pct in March -CISA
BEIJING, April 11 (Reuters) - China's average daily crude steel output was 1.904 million tonnes in March, up 12 percent on the month, data from the China Iron and Steel Association showed on Wednesday, suggesting demand remained robust despite concern about a slowing economy.
Analysts said the sharp increase in daily runs over the month was mostly a result of CISA's severe underestimation of output in February.

Gold treads water; euro zone caution remains
SINGAPORE, April 12 (Reuters) - Gold hovered near $1,660 an ounce, supported by a steady euro on easing fears about the euro zone debt crisis, though investors remained cautious on the outlook for peripheral economies and were awaiting more clues on global growth.
"The comment has stabilised the stock market and euro, but the prospect in the euro zone still looks grim with yields in Spain and Italy trading at relatively high levels," said Peter Tse, director at ScotiaMocatta in Hong Kong.

Singapore's SMX to launch new gold, silver futures
SINGAPORE, April 12 (Reuters) - The Singapore Mercantile Exchange will roll out in May new gold and silver futures contracts and is also looking at rubber and sugar contracts, its chief executive said on Thursday, as the fledgling bourse moves further to boost liquidity.
SMX, owned by India's Financial Technologies , is hoping to capitalise on the brisk trading interest in gold and silver futures contracts traded in India, the world's biggest gold consumer, and give potential players the opportunity to hedge via the new contracts.
Rio, BHP iron ore output to dip as China demand cools
SYDNEY, April 12 (Reuters) - Rio Tinto   and BHP Billiton   are set to report lower-than-expected iron ore output for the March quarter after heavy rains and cyclones disrupted port and mining operations in Australia.
The losses could collectively reach as high as 4 million tonnes of ore - some 4 percent of overall estimated output for the quarter.

 METALS-Copper bounces off $8,000 support, ECB comment boosts
SHANGHAI, April 12 (Reuters) - London copper rose above its technical support at $8,000 on Thursday as prospects of the European Central Bank buying more bonds helped ease concerns about Europe's debt crisis.
But the market was cautious ahead of an Italian bond auction and due to uncertainty over the health of major economies, after recent U.S. data showed a sharp deceleration in jobs growth and Chinese trade figures indicated a slowdown in domestic demand.

PRECIOUS-Gold treads water; euro zone caution remains
SINGAPORE, April 12 (Reuters) - Gold hovered near $1,660 an ounce on Thursday, supported by a steady euro on easing fears about the euro zone debt crisis, though investors remained cautious on the outlook for peripheral economies and were awaiting more clues on global growth.
Traders saw gold in a consolidation phase after a recent rally lifted prices from a near three-month low just above $1,610, amid speculation of more easing from the U.S. central bank.

20120412 1133 Global Market & Commodities Related News.

GLOBAL MARKETS-Euro firms, shares dip as Europe debt worry lingers
TOKYO, April 12 (Reuters) - Asian shares eased on Thursday while the euro firmed, reflecting investor caution despite easing concerns about sovereign funding for troubled euro zone economies Spain and Italy that helped U.S. and European equities rebound overnight.    
"The reprieve may prove to be temporary," Barclays Capital analysts said in a research note. "(We) remain concerned about sustained appetite for peripheral European debt amid waning foreign demand in an increasingly fragmented market," they said.

COMMODITIES-Oil rebounds on fuel stocks data, gold slips
CHICAGO, April 11 (Reuters) - Oil markets rebounded from two days of losses o n W ednesday as U.S. government data showed a steeper-than-expected drop in domestic fuel stocks, while gold dipped after a four-session rally and copper steadied near a three-month low.
"The large refined product drawdowns and decline in crude oil imports combined to produce a bullish report," said John Kilduff, partner at Again Capital LLC in New York.

OIL-Oil up as drop in US fuel stocks sparks rebound
NEW YORK, April 11 (Reuters) - Oil prices rose on Wednesday, reversing two days of losses, after U.S. government data showed domestic fuel stocks fell much more than expected last week, which overshadowed an increase in crude inventories.
"The large refined product drawdowns and decline in crude oil imports combined to produce a bullish report," said John Kilduff, partner at Again Capital LLC in New York.

NATURAL GAS-US natgas plummets to 10-year low below $2/mmBtu
NEW YORK, April 11 (Reuters) - U.S. natural gas futures ended below $2 per million British thermal units on Wednesday for the first time in more than 10 years as extended mild weather forecasts plus worries about record-high supplies pressured prices.
"We had the warmest March on record, now we're struggling with (mild) shoulder-month weather. People are looking out at the injection (inventory building) season and are concerned there may not be enough space to store gas," said Tom Saal, senior vice president at INTL Hencorp Futures in Miami.

EURO COAL-Prices dip with weaker oil
LONDON, April 11 (Reuters) - European physical coal prices fell by around 50 cents on Wednesday in line with weaker oil, encouraging a few trades after days of minimal price movement, utilities and traders said.
"Prices have very gradually lost about $3 over the past five days or so. They have been weakening but slowly," one utility source said.

20120412 1130 Local & Global Economy Related News.

Exports increased 14.5% yoy in Feb (0.4% in Jan) while imports rose 18% yoy (3.3% in Jan), resulting in a trade surplus of RM10.6bn (+RM8.7bn in Jan). Economists had projected exports and imports would increase by 12.1% and 16.7% respectively. On mom basis, exports rose 3.3% while imports fell 0.1% in Feb. In 2M12, exports went up 7.1% and imports increased 10.2%, leaving a trade surplus of RM19.3bn. (BT)

Industrial production index (IPI) went up 7.5% yoy in Feb (0.3% in Jan) due to the rise of manufacturing (9.4%), mining (1.9%) and electricity (11.3%). Economists had forecast for a 6.1% gain. On a mom basis, IPI dropped 0.5%. In 2M12, IPI increased 3.8%. (BT)

The manufacturing sales posted a 10.5% yoy growth to RM48.9bn in Feb (+4.1% to RM48.8bn in Jan). On mom basis, it rose 0.3% (-0.3% in Jan). In 2M12, it increased 7.2% to RM97.7bn. Total employees engaged in the manufacturing sector increased 0.6% yoy to 1.03m persons (+0.8% yoy to 1.02m persons in Jan). Salaries and wages paid went up 6.9% yoy to RM2.5bn (+4.4% to RM2.5bn in Jan). Average salaries and wages paid per employee rose 6.3% to RM2,393 (+3.6% to RM2,400 in Jan). Productivity recorded a 9.9% yoy (3.3% in Jan). (Department of Statistics)

The Employees Provident Fund (EPF) has introduced a Permanent Disability Evaluation Guideline to medical practitioners and the EPF Medical Board with regard to Disability Withdrawals. EPF deputy CEO (Operations) Datuk Ibrahim Taib said the guideline was part of a continuous process to improve EPF's services. (Bernama)

The Dewan Rakyat on Tuesday passed the Income Tax (Amendment) Bill 2012. Deputy Finance Minister Datuk Dr Awang Adek Hussin explained that the amendment was to allow taxpayers to claim for deductions for the cash donations for the operations of education institutions as well as for religious purposes. (Bernama)

South Korea: March adjusted jobless rate falls to 3.4%
South Korea's seasonally adjusted unemployment rate came down from February's 11-month high in March, falling for the first time in three months. The seasonally adjusted jobless rate was at 3.4% in March, compared with 3.7% in February. Unadjusted, the reading was at 3.7% last month, down from February's 4.2%. The number of employed Koreans in March rose by 419,000 from a year earlier, to 24.3m, compared with an increase of 447,000 in the preceding month. (MarketWatch)

India’s local car sales rose 19.7% yoy to 229,866 units in Mar, but climbed only 2.2% in the fiscal year that ended last month due to sluggish sales in the first half of the year. (Bloomberg, Reuters)

Indonesia’s government acknowledged that the policy on subsidy reduction cannot be well implemented and a balanced budget in 2014 is difficult to achieve. (IFT)

Thailand's public debt stood at THB4.36tr or 41.06% of GDP at the end of Jan from 43% due to a decree that approved the transfer of Financial Institutions Development Fund’s THB1.14tr debt obligation from the Finance Ministry to the Bank of Thailand. The post-flood borrowing schemes, endorsed in Mar, however, are expected to boost the ratio to nearly 60% in 2013. (The Nation)

Thai consumers demonstrated an improvement in confidence in 1Q12, making Thailand as one of five Asia Pacific countries covered in MasterCard Worldwide Index that recorded positive sentiment. (The Nation)

An ASEAN Business Advisory Council survey ranked Vietnam the second most attractive regional investment destination, second only to Indonesia. (Vietnam News)

Emerging Asian economies will experience flat growth this year before recovering in 2013, the Asian Development Bank said in its Asian Development Outlook report for 2012. (AFP)

The OECD composite leading indicators rose t0 100.5 in Feb (100.3 in Jan), the fourth straight monthly increase. The US and Japan economies have “regained momentum”, while the indicators for Germany and the UK point to “a possible change in momentum.” (OECD)

About 45m people qualify as unemployed in the 34 OECD countries, with the unemployment rate steady overall at 8.2% in Feb but highest in the eurozone at 10.8%, according to the OECD. (AFP)

Bangladesh: To get USD987m IMF loan after reserves fell
The IMF approved a USD987m loan to Bangladesh today after rising oil imports depleted the country’s currency reserves. Bangladesh will immediately receive USD141m under the three-year arrangement. Conditions for the loan include a “restrained” monetary policy, a reduction of trade barriers and “moderate” fiscal consolidation, according to the release. (Bloomberg)

Australia: Feb home loans down
Australian home-loan approvals fell for a second month on the fastest exodus of first-home buyers in a decade, increasing pressure on the central bank to cut interest rates as consumer confidence weakens. The number of loans granted to build or buy houses and apartments fell 2.5% in February from a month earlier, the biggest drop since March 2011. (Bloomberg)

Japan: BOJ members asked to meet lawmakers amid pressure to loosen
The ruling Democratic Party of Japan has asked four members of the Bank of Japan’s policy board to meet with DPJ lawmakers this month amid pressure for the central bank to increase monetary easing to end deflation. Kouhei Ohtsuka, a leader of the ruling party’s official policy group on countering deflation requested that they attend the next meeting. (Bloomberg)

The Bank of Japan kept the benchmark interest rate at 0-0.1% and maintained its ¥30tr asset-purchase fund and ¥35tr credit-lending program unchanged, all of which were expected by 12 of 13 economists. (Bloomberg)

Japan: Machinery orders show surprise rise but risks loom
Japan's core machinery orders rose unexpectedly in February, reinforcing expectations that rebuilding in the earthquake-battered northeast will bolster corporate spending and economic recovery although risks loom from a resurgent yen and wobbly overseas economies. Core machinery orders, considered a leading indicator for capital spending, rose 4.8% in February from the previous month, beating the median forecast for a 0.8% decline. (Bloomberg)

Japan will enter talks with other countries this week on how to respond to the IMF's call to boost its resources to tackle Europe's debt crisis, Finance Minister Jun Azumi said. He also said he is “watching (foreign-exchange rates) with great interest every day.” (WSJ, Reuters)

Japan’s core machinery orders rose 4.8% mom in Feb (3.4% in Jan), higher than market expectations of a 0.5% fall. (AFP)

In Mar, China’s exports rose 8.9% yoy (18.4% in Feb) to US$165.6bn, while imports grew 5.3% yoy (39.6% in Feb) to US$160.3bn. The trade balance stood at US$5.35bn in Mar (-US$31.48bn in Feb). The market had been expecting exports and imports to grow 7% and 9% respectively, and a trade deficit of US$3.15bn. (AFP, Bloomberg)

China’s business climate index slid to 127.3 in 1Q12 from 127.8 in 4Q11. The entrepreneur confidence index improved to 123 from 120.9 in 4Q11. (Bloomberg)

The People's Bank of China is reportedly weighing a quota-based system through which approved mainland businesses would be able to take out offshore yuan loans and remit the funds. (WSJ)

China is opening up the domestic capital market and will allow freer outbound investment for residents, said the State Administration of Foreign Exchange, indicating that it is shifting its focus from trading to capital markets in driving internationalization of the country's currency. (Shanghai Daily)

China's auto sales reached 4.79m units in the first three months this year, down 3.4% yoy. Cars sales in Mar reached 1.84m units, up 1.02% yoy and 17.33% mom. (Xinhua)

Greece paid a sharply lower rate of 4.55% (4.80% at the last equivalent sale that raised €1.14bn) to raise €1.3bn in a sale of 6-month treasury bills, the Greek debt management agency said. (AFP)

US: Fed says economy grew at ‘modest to moderate’ pace
The Federal Reserve said the economy grew in all 12 of its regions as manufacturing, hiring and retail sales showed signs of strength in the face of higher fuel prices. “The economy continued to expand at a modest to moderate pace from mid-February through late March,” the Fed said. “Hiring was steady or showed a modest increase across many districts.” (Bloomberg)

US: Import prices jump 1.3% in March
The prices paid for goods imported into the US jumped 1.3% in March, mainly because of higher oil costs. That compared to a revised 0.1% decrease in February. Import prices in February were originally reported up 0.4%. Fuel costs shot up 4.3% as the price of oil surged. Excluding fuel, import prices rose by a much smaller 0.3% last month. (MarketWatch)

US Federal Reserve Chairman Ben Bernanke called for new steps to curb “shadow banking” operating beyond standard oversight while saying the economy has far to go before fully recovering from the credit crisis. (Bloomberg)

The US Federal Reserve said the economy grew in all 12 of its regions as manufacturing, hiring and retail sales showed signs of strength in the face of higher fuel prices. (Bloomberg)

Taxes for America's highest earners have fallen sharply since 1995, according to a White House report that estimated the 400 highest income households in the country paid an average of 18.1% of their income in federal taxes in 2007, down from the 29.9% those households paid in 1995. (Reuters)

The US NFIB Small Business Optimism Index stood at 92.5 in Mar (94.3 in Feb), lower than consensus of 94.8. (Bloomberg)

The US ICSC-Goldman Store Sales index rose 0.5% wow in the week ended 7 Apr (3.8% in the prior week). (Bloomberg)

US inventories rose 0.9% mom in Feb (a revised 0.6% in Jan), higher than consensus of 0.6%. (Bloomberg)

The MBA Purchase Applications Index fell 0.5% wow in the week ended 6 Apr (+7.2% in the prior week). (Bloomberg)

US export prices rose 0.8% mom in Mar (a revised 0.4% in Feb), whilst import prices gained 1.3% mom (a revised -0.1% in Feb). Economists had expected gains of 0.3% and 1.0%, respectively. (Bloomberg)

20120412 1130 Malaysia Corporate Related News.

Tower atop LRT station
In what may be Syarikat Prasarana Negara’s most ambitious project yet to unlock value from its real estate, the national public transport operator is partnering with a developer to build a billion-ringgit tower atop its Dang Wangi light rail transit (LRT) station. The project, won by Crest Builder Holdings and its 49% joint-venture (JV) partner Detik Utuh SB two weeks ago, is for the construction of a single-block mixed development fronting Jalan Ampang with a gross development (GDV) of RM1.0bn. (StarBiz)

Syed Zainal still MD, says Proton
Proton Holdings has said Datuk Seri Syed Zainal Abidin Syed Mohamed Tahir is still holding the position of group managing director of the national carmaker, and that his services are still required in the company. It was responding to a Edge Financial Daily report on Tuesday citing sources that Syed Zainal had resigned from the company. Proton in a statement on Tuesday said it was not aware of the speculation. (Financial Daily)

Seacera to buy 138-acre land in Semenyih
Ceramic company Seacera Group has proposed to buy a 138-acre plot of land in Semenyih, Selangor, for RM78.1m from Duta Skyline SB. The deal is expected to be completed within five years, said the company in its exchange filing on Tuesday. The land will be used for future property development, said the company. The amount will be settled via RM13m in borrowings, and the remainder from internal sources. (Malaysian Reserve)

Hibiscus Petroleum to enter Norway’s O&G scene
Lime Petroleum plc, jointly controlled by Hibiscus Petroleum, has signed a Letter of Intent (LOI) with North Energy ASA and Rex Oil & Gas Ltd to acquire a portion of North Energy's interest in four concessions, offshore Norway. Under the LOI, Lime is expected to sign a framework sale and purchase agreement with North Energy, which will detail the terms of the acquisition by 30 April. A special sale and purchase agreement for the interest in each concession is also expected to be signed subsequently, the company added. (BT)

Hong Leong Bank signs deal to dispose of MIMB
Hong Leong Bank has sealed a sale and purchase agreement with Hong Leong Capital to sell its 100% stake in MIMB Investment Bank (MIMB) for RM157.9m. The proposed acquisition is part of an exercise to rationalise the investment banking businesses involving MIMB and Hong Leong Investment. The deal is expected to be completed in the second quarter of this year, Hong Leong Bank said in a statement to Bursa Malaysia on Tuesday. (BT).

Malaysia Target RHB Promising Islamic Banking Profits: Real M&A (Source: Bloomberg)
Potential buyers of Malaysia’s RHB Capital Bhd. (RHBC) can grab an increasing share of the biggest market for Islamic bonds at a 24 percent discount to the bank’s rivals. RHB, whose Islamic banking profits rose ten times faster than total earnings last year, will become Malaysia’s largest stock broker after its acquisition of OSK Investment Bank Bhd., according to data compiled by Malaysia’s stock exchange. As heightened competition from foreign lenders spurs mergers among Malaysia’s banks, the OSK purchase will further boost RHB’s allure, with the Islamic banking franchise also attractive for overseas bidders, Alliance Research Sdn. said. After a 19 percent drop since RHB’s merger talks with Malaysia’s two largest lenders ended in June, the bank is trading at 1.49 times book value, cheaper than all except one of its domestic peers, according to data compiled by Bloomberg.
RHB’s biggest investor, Malaysia’s Employees Provident Fund, would be willing to sell, Aberdeen Asset Management Plc said, while another s hareholder, Aabar Investments PJSC (AABAR), has gauged Sumitomo Mitsui Financial Group Inc. (8316)’s interest in its 25 percent stake, according to two people familiar with the matter. “It’s a takeover target and the OSK acquisition could make it easier to sell,” said Gerald Ambrose, who oversees 5.4 billion ringgit ($1.8 billion) in assets as managing director of Aberdeen in Kuala Lumpur. “It would have national coverage and good exposure to retail as well as investment banking. There are foreigners who want exposure here, and if you’re a foreign Islamic bank, you’d be better buying a local brand.”

The governments of Malaysia and Bangladesh signed an MOU for the construction of Padma Multipurpose Bridge spanning 6.15km across the Padma River in Bangladesh. Estimated cost is RM9bn, and will be fully undertaken by Malaysian contractors. "We have a few contractors in mind, (the names) will be submitted to a special Public Works Department committee. As soon as the contractors are chosen, we will take them to Bangladesh where we will have direct negotiations with the government of Bangladesh," Former Works Minister Datuk Seri Samy Vellu, who is also Malaysia's special ministerial envoy to India and South Asia, said. Five contractors will be joined together to form a consortium. "I have spoken to UEM, MRCB, PAG Consult, Eversendai, and particularly, the contractors currently building the second Penang bridge may come on board on this project," he said. The selection process will be completed in two or three weeks. The project is entirely privately funded by the contractors. The contractors will be able to collect toll from the bridge on a concession basis for 35 to 40 years. The bridge will be road and rail-ready. It will be the largest bridge in Bangladesh and the first fixed river crossing for road traffic, and is expected to be completed in 54 months. (Starbiz)

Maybank's wholly-owned subsidiary, Maybank Investment Bank (Maybank IB), intends to acquire a 17.2% in Saudi Arabia-based Anfaal Capital for 10.52m Saudi riyals (RM8.6m). It will purchase the stake from Saudi Arabian company, Al Numu Real Estate Company, which is a real estate investment and management company. In a filing to Bursa Malaysia, Maybank said it has entered into a conditional sale and purchase agreement with Al Numu and Anfaal for the purchase of the equity as well as for the proposed assignment of the subordinated loan of 2.07m Saudi riyals (RM1.6m) from Al Numu to Maybank IB. Maybank IB, which already has an 18% share in Anfaal, will hold 35.2% interest in the company upon completion of the share acquisition. It said the proposed acquisition would enable Maybank IB to increase its presence in Saudi Arabia, representing a good opportunity for the investment bank in the area of syndication, sukuk structuring and project financing in the country. (BT, BMSB)

Malayan Banking Bhd (Maybank) said it is keeping its options open in bidding for Al Amanah Islamic Investment Bank of the Philippines, the country's only Islam-oriented commercial bank, a Philippine-based newspaper reported. Al Amanah Islamic Bank is looking for a strategic partner through the sale of a 49% stake or the entire bank to a foreign entity with expertise in Islamic banks. Maybank told the Philippine-based newspaper that it wanted to expand further in Asean region while strengthening its hold in the Asia-Pacific region. (StarBiz)

Malaysia has seen an unprecedented boom in the issuance of private debt securities (PDS) in the 1Q12 on the back of several record-breaking bond offerings. As at end-March, the total value of gross PDS issuance came up to RM39bn, according to RAM Rating. This more than tripled that of the corresponding quarter in 2011 and also surpassed the RM31.2bn recorded in the 1H11. The achievement was underpinned by PLUS's RM23.4bn bond issue, which represented the world's biggest sukuk at the time of its issuance in Jan. Other noteworthy issues included Tanjung Bin Energy Issuer Bhd's RM4.5bn sukuk murabahah, Abu Dhabi National Energy Company PJSC's RM3.5bn sukuk and Maxis's RM2.5bn sukuk musharakah. Trading interest in the secondary market was mainly confined to the utilities sector, with PLUS having the most actively traded bonds. (BT)

RHB Capital hopes to conclude its takeover of OSK Investment Bank in the third quarter this year, its chief said. It is also aiming to complete its planned purchase of Indonesian lender PT Bank Mestika Dharma in the same quarter, but may re-think its options in that country if regulatory approval for the deal does not come by June. In a separate meeting with the media after the group's AGM, OSK Investment Bank chief executive officer U Chen Hock said that there is no reason the planned merger should not get the nod from the authorities. Meanwhile, Kam dismissed market talk that non-bank lender Malaysia Building Society Bhd may be merged into the RHB group. "No, there's nothing on the table," he said. Kam's target is for the OSK merger to be earnings accretive to RHBCap in "18 to 24 months" after it is completed. (BT)

Takaful Ikhlas expects its operations in Sabah and Sarawak to contribute up to RM50m this year, its president and CEO, Datuk Syed Moheeb Syed Kamarulzaman says. The company, a subsidiary of MNRB Holdings , foresees a lot of potential from the states, due to the low penetration rate in the individual family business there. Among initiatives planned by the company to increase its presence in the states include appointing more agents and a dedicated person or department. "For the financial year ending March 31 2013, Takaful Ikhlas targets Sabah and Sarawak to contribute about RM20m to RM25m each," Syed Moheeb said. Last year, the company raked in RM37.7m in contributions from the markets. Contributions from the family business in-force from Sabah and Sarawak as at December 2011 reached RM28.9m, while that of general business stood at RM8.8m. Takaful Ikhlas has 462 agents in Sabah and 420 in Sarawak, but most of its business comes from financial institutions. (BT)

Former finance minister Tengku Razaleigh Hamzah has warned that listing FELDA Global Ventures Holdings (FGVH) on the bourse would only expose it to market risks such as share manipulation. According to Harakah Daily today, the senior Umno leader said FELDA settlers could be left penniless if they were to be influenced by syndicates manipulating Felda's share prices. "We fear that these settlers would be influenced by the games of these syndicates. When the share prices are low, surely many settlers interested would make big purchases and even take bank loans for it. "They would do this with the assumption that they would reap huge profits once the share prices soar. But we must remember that the prices would not stay high forever," Razaleigh was quoted as saying today in the PAS organ. When the prices drop, those who had invested heavily would be left in a lurch. "I am concerned and do not know how the government plans on keeping these share market manipulations in check, and in the end, these settlers would be the ones to lose out," he said, according to Harakah. (The Malaysian Insider)

Umno Youth has proposed that the National Higher Education Fund Corporation (PTPTN) do away with the 1% interest rate for loans. Its chief Khairy Jamaluddin said the 1% interest rate meant for PTPTN's administration fee was a lot more than the actual operating expenditure of the corporation. “We were told that it only costs PTPTN RM65m a year to operate and to pay its overheads, so the 1% interest rate from the billions given out every year is far more than needed. “We hope that the PTPTN borrowers will not be saddled with extra debt and only pay their principal loans,” he said. PTPTN COO Wan Ahmad Wan Yusof said loan default amounted to RM24.7bn at present. (Star)

Wilmar is developing a palm oil-based aviation biofuel in the company’s biofuel plant in Gresik, East Java with an investment of about US$80m, company executive said. The company, through its subsidiary PT Wilmar Nabati Indonesia, is collaborating with Elevance Renewable Sciences Inc, a US-based company to produce the aviation biofuel. (The Jakarta Post)

DRB-Hicom has sent in a five man-strong post-acquisition team to evaluate and study the inner dealings in Proton Holdings, said an industry source. It is learnt that the team is headed by Datuk Lukman Ibrahim, DRB-HICOM’s group chief operating officer. Business Times was told that the team which reported for duty to Proton managing director Datuk Syed Zainal Abidin Syed Mohamed Tahir on Monday, does not have a management role. Rather, they are there to understand how the Proton management operates. “It is not a financial due diligence, but they are going through all the impending deals on the table for Proton. They are particularly interested in how Lotus is being managed, and also Proton’s potential tie-ups in China and with General Motors Company (GM),” said another source from Proton. “They are not saying yes or no to the deals, but they want to know the rationale behind Proton management’s train of thought,” added the source. (BT)

Naza Kia Malaysia is targeting an annual sales growth of 40% to 18,000 units this year as the company expects an improvement in its inventory. “The main catalyst will be the overall improvement in the stock or supply situation as compared with last year,” CEO Datuk Hafiz Syed Abu Bakar said. He pointed out that Kia’s global sales last year grew 51% compared with 2009. On the local front, Hafiz said Naza Kia was seriously studying the possibility of introducing vehicles in the “A” and “B” segments, where the company was still unrepresented. (Star Biz)

Thai AirAsia plans to launch an IPO in the Thai market in May, its financial adviser said. “It should be an active year for investment banking and we have Asia Aviation, a major shareholder of Thai AirAsia, which will go public in May,” Suvabha Charoenying, Thanachart Securities MD said. Thai AirAsia CEO Tassapon Bijleveld said he expects to raise US$150m-200m from the share offer. Asia Aviation Pcl, a holding company which owns 51% of Thai AirAsia, will offer 750m new shares or 15.46% in the IPO. After the share offer, holding of AirAsia Investment, a wholly-owned unit of AirAsia, will be reduced to 45% from 49% because AAI had decided not to subscribe new shares of Thai AirAsia. (Reuters)

MMC Corp Bhd is currently doing its due diligence exercise on Keretapi Tanah Melayu Bhd (KTMB) for the purpose of taking over and turning around the ailing rail operator, according to a source. "It is expected that the changes [in top management at KTMB] will happen after MMC is satisfied with its study which will take a few more months to complete. MMC then needs to present its case on how to turn around the company to the Government and get its green light to the take over," said the source. However, the privatisation idea was greeted by negative response from the Railwaymen Union of Malaya, which argued that it was not right for KTMB to let the national railway to be operated by a private party. (StarBiz)

British American Tobacco (M) Bhd (BAT) is optimistic of regaining its market share at 69.7% which was achieved about 12 years ago. The tobacco giant’s market share dwindled below to 60% between 2000 and 2009, but it had gain steam and seen an increase in market share in the past two years. BAT market share went up by 0.4% in 2010 and by 1.3% in 2011. Its current market share is 61.1%. “We have a robust strategy put in place two years ago and it had worked well for us. “Last year we were the only tobacco company to have increased our market share in Malaysia and we promise we will increase market share again this year barring any unforeseen circumstances,” managing director William Toh said. The group is confident of sustaining its market share growth momentum although it noted that the industry anticipated further challenges as it battled contraband cigarettes and higher operating costs. (Starbiz)

Several Indian companies are courting Scomi Group for a possible joint venture to set up a monorail-related manufacturing plant in India, amid growing demand for the infrastructure service here. "We are already talking to several potential partners for a joint venture to set up a manufacturing facility in India..." Grp CEO Shah Hakim Zain said. There is volume for such facility in India as the market size for monorail business in India is estimated at a whopping US$15bn (RM46.1bn) over five years, he said. Listing its India unit on the Bombay Stock Exchange was another option for Scomi as it expanded its footprint in the region, he said. Back home, he said the government's decision to revive the Putrajaya monorail project depended very much on the traffic growth in the administrative capital. (BT)

MNRB Holdings is drafting a five-year plan to drive the reinsurance group to the next level of profitability. President and CEO Mohd Din Merican said the plan to be unveiled "soon" would include creating synergy among the group's subsidiaries. This, he noted, would ultimately lead to better cost savings and better returns for the group, whose largest shareholder is Permodalan Nasional Bhd (PNB). (BT)

The Belawan port in North Sumatra province and the Dumai port in Riau are operating normally after an 8.6 magnitude quake struck near the northern part of Sumatra island today, Taufik Fadillah, a spokesman at the ports’ operator Pelabuhan Indonesia I, said by telephone. (Bloomberg)

20120412 1112 Global Market Related News.

Asian Stocks Swings Between Gain, Losses as Metals Rise (Source: Bloomberg)
Asian stocks swung between gains and losses, with the regional benchmark index trading near its lowest level in more than two months, as materials producers rose on higher metal prices, countering declines among South Korean shares. Alumina Ltd. (AWC), partner in the world’s biggest producer of the material used to make alumina, added 2.5 percent in Sydney after Alcoa Inc., the largest U.S. aluminum producer, reported an unexpected first-quarter profit. Fanuc Corp., a maker of production automation systems, after Citigroup Inc. upgraded global industrial stocks to overweight and maintained a buy rating on the Japanese company. South Korean shares dropped as North Korea prepared to test a long-range rocket and Samsung Electronics Co. (005930), which supplies touch screens to Nokia OYJ, fell after the Finnish company reported a software fault with its latest model.
“Overall, clearly the U.S. economy is improving. The question is whether we are reading too much into a better-than- expected Alcoa result,” said Tim Schroeders, who helps manage $1 billion in equities at Pengana Capital Ltd. in Melbourne. The MSCI Asia Pacific Index climbed 0.1 percent to 123.16 as of 10:41 a.m. in Tokyo after falling as much as 0.2 percent. The measure slid 0.7 percent yesterday, falling for a sixth straight day.

U.S. Stocks Halt Five-Day Decline After Alcoa’s Results (Source: Bloomberg)
U.S. stocks advanced, halting a five-day decline for the Standard & Poor’s 500 Index, after Alcoa (AA) Inc. reported an unexpected first-quarter profit. Alcoa, the first company in the Dow Jones Industrial Average to announce quarterly results, climbed 6.2 percent. Bank of America Corp. (BAC) and JPMorgan Chase & Co. (JPM) added at least 2.4 percent to pace gains in financial shares. A measure of 11 homebuilders in S&P indexes jumped 4.8 percent as Wells Fargo & Co. said a survey of sales managers showed 63 percent of the respondents reported better-than-expected orders. The S&P 500 increased 0.7 percent to 1,368.71 at 4 p.m. New York time, after dropping 4.3 percent over the past five days. The Dow advanced 89.46 points, or 0.7 percent, to 12,805.39 today. The Russell 2000 Index (RTY) of small companies climbed 1.6 percent to 796.59. About 6.4 billion shares changed hands on U.S. exchanges today, 6.5 percent less than the three-month average and 23 percent below yesterday’s volume.
“Alcoa helped dampen the dark mood in the market,” said Frederic Dickson, who helps oversee $28 billion as chief market strategist at D.A. Davidson & Co. in Lake Oswego, Oregon. “It’s always nice to see the first company out of the box with an earnings surprise. It’s time to see how this progresses and reassess when to put some money back in.”

European Stocks Rebound; Banks and Carmakers Lead Gains (Source: Bloomberg)
European stocks gained, rebounding from a two-month low, as banks and automakers advanced and Spain’s prime minister said the country wouldn’t need a bailout. Deutsche Bank AG was among stocks leading banks higher. Volkswagen AG (VOW) rose 3 percent. Aluminum producer Norsk Hydro ASA (NHY) rose 2.2 percent. Nokia Oyj (NOK1V) tumbled 14 percent after it lowered the first-quarter outlook for its handset division. The Stoxx Europe 600 Index gained 0.7 percent to 254.43 at the close in London. European stocks tumbled 2.5 percent yesterday to their lowest level since Jan. 30, amid mounting concern about the region’s debt crisis and as a U.S. report showed employers in the world’s largest economy added fewer jobs in March than forecast.
“Fundamentally, the equity market offers extreme value and I am very happy to be buying on the dips,” said George Godber, who helps oversee $22 billion as a fund manager at Charles Stanley’s Matterley division in London. His Matterley Undervalued Assets Fund rose 12 percent in 2012. “Equities are the only place to be.”

Japan Stocks Snap Longest Loss Streak Since ‘09 (Source: Bloomberg)
April 12 (Bloomberg) -- Japanese stocks rose, with the Nikkei 225 Stock Average (NKY) snapping its longest losing streak since 2009, as optimism about U.S. corporate earnings and a drop in Spanish bond yields boosted demand for riskier assets. Automaker Mazda Motor Corp., which gets 27 percent of its revenue in North America, gained 1.5 percent after falling four consecutive days. Hitachi Construction Machinery Corp. paced gains among machinery makers after a newspaper reported the firm may have an 80 billion yen operating profit for the year ending in March. Inpex Corp. (1662), Japan’s No. 1 energy explorer, advanced 0.2 percent after oil rose. The Nikkei 225 Stock Average gained 0.2 percent to 9,475.27 as of 9:22 a.m. in Tokyo, advancing for the first time in eight days, the longest run of losses since July 2009. The broader Topix Index gained 0.1 percent to 806.75 with about two shares advancing for each that slid.
“Today we will see a little bit of rebound after five or so days of negative market activity, but there are significant headwinds on the horizon,” said Tim Schroeders, who helps manage $1 billion in equities at Pengana Capital Ltd. in Melbourne. “Overall, clearly the U.S. economy is improving. The question is whether we are reading too much into a better-than- expected Alcoa result.”

China’s Stock Futures Rise on Prospect of Monetary Policy Easing (Source: Bloomberg)
China’s stock-index futures rose on speculation the government will loosen monetary policy to boost growth as a report tomorrow may show the economy grew the least in three years. Futures on the CSI 300 Index (SHSZ300) expiring in April, the most active contract, gained 0.4 percent to 2,525 as of 9:15 a.m. local time. SAIC Motor Corp. (600104) may lead gains for automakers after an industry report showed the nation’s car sales exceeded analysts’ estimates. China Vanke Co. (000002) and Poly Real Estate Group Co., China’s biggest developers, may drop on a newspaper report the southern province of Guangdong may impose property taxes. “The market is waiting for tomorrow’s data, which may definitely show the economy is slowing down,” said Wang Weijun, a strategist at Zheshang Securities Co. in Shanghai. “However, that may justify the government taking measures such as a cut in interest rates to boost growth.”
The Shanghai Composite Index (SHCOMP) climbed 3.06 points, or 0.1 percent, to 2,308.93 yesterday. The CSI 300 Index rose less than 0.1 percent to 2,520.04. The Bloomberg China-US 55 Index (CH55BN), the measure of the most-traded U.S.-listed Chinese companies, added 1.8 percent in New York.

Dollar Remains Lower; Yellen Endorses Accomodative Policy (Source: Bloomberg)
The dollar remained lower against most of its 16 major counterparts after Federal Reserve Vice Chairman Janet Yellen endorsed the central bank’s “highly accommodative” policy. The euro was 0.1 percent from a three-month low against the U.K. pound before Italy sells bonds today. Australia’s dollar advanced before the country releases employment data. “The market may start pricing in additional Fed easing,” weighing on the dollar, said Shinji Kureda, New York-based vice president of the trading department at Sumitomo Mitsui Banking Corp. “The Fed doves are likely to become dominant again as it gets clearer that the U.S. economy is losing momentum.” The dollar was little changed at $1.3115 per euro as of 9:53 a.m. in Tokyo from the close in New York yesterday, when it lost 0.2 percent. The greenback fetched 81.02 yen from 80.86. The 17-nation euro fell 0.1 percent to 82.37 U.K. pence after touching 82.30 on April 9, the lowest since Jan. 9.

FOREX-Yen buoyed near multi-week high as risk aversion climbs
SYDNEY/TOKYO, April 11 (Reuters) - The yen hovered at multi-week highs against many currencies in Asia on Wednesday, while the Australian dollar floundered as worries about global growth took another bite at risk sentiment.  
A jump in Spanish bond yields exacerbated concerns about the fragility of peripheral euro zone economies, while disappointing imports from China kept alive worries about a hard economic landing in the world's second-biggest economy.

Treasuries Snap Decline as Italy to Test Euro Debt Demand (Source: Bloomberg)
Treasuries snapped a decline from yesterday as investors sought the relative safety of U.S. debt before Italy sells as much as 5 billion euros ($6.6 billion) of bonds today. Spanish 10-year yields surged as high as 6 percent yesterday, approaching the levels that pushed Greece, Ireland and Portugal into bailouts, and the extra yield over German bunds held above 400 basis points. Italy’s auctions today will be a test of appetite for bonds from the euro region’s most indebted nations. The U.S. is scheduled to auction $13 billion of 30-year bonds today. “Treasuries are being driven by the flight to quality from Europe,” said Tomohisa Fujiki, a rate strategist at BNP Paribas Securities Japan Ltd. in Tokyo. The company’s U.S. arm is one of the 21 primary dealers that are required to bid at the government debt auctions.
U.S. 10-year yields fell two basis points, or 0.02 percentage point, to 2.02 percent as of 10:05 a.m. in Tokyo, according to Bloomberg Bond Trader prices. The 2 percent security maturing in February 2022 rose 1/8, or $1.25 per $1,000 face amount, to 99 26/32. The rate increased five basis points, or 0.05 percentage points, yesterday.

Asia Inflation Risk May Check Easing (Source: Bloomberg)
Asian nations from South Korea to Singapore may refrain from monetary easing this week as rising oil prices add to inflation risks, even as pressure mounts on Japan to add stimulus and China grapples with slowing expansion. Indonesia (IDBIRATE) will keep interest rates unchanged for a second month tomorrow, and South Korea and Pakistan will follow a day later, according to Bloomberg News surveys. Singapore, which uses its exchange rate to manage inflation, is forecast by economists to maintain its policy stance on April 13, when the government is predicted to report a rebound in growth. Crude oil has risen 18 percent in the past six months, forcing Asian governments to raise fuel prices and limiting policy options for central banks in the world’s fastest growing region. Developing Asia can refrain from further monetary and fiscal stimulus because expansion will remain robust, while spikes in energy costs can revive the threat of inflation, the Asian Development Bank said in a report today.
“Economic momentum is steadily improving, so there is no scope for further monetary accommodation,” said Wai Ho Leong, a senior regional economist at Barclays Capital in Singapore. “The focus of policy is to anchor inflation expectations.”

IMF Said Ready to Cut China Current-Account Surplus Forecast (Source: Bloomberg)
The International Monetary Fund is set to lower its forecasts for China’s medium-term current- account surplus, according to two officials who have seen the draft report. The Washington-based IMF in September estimated surpluses of more than 7 percent of gross domestic product for 2015 and 2016. The new forecasts for the broadest measure of trade will be published April 17 in the IMF’s World Economic Outlook, according to the officials, who spoke on condition they wouldn’t be named because the figures haven’t been made public. China, the world’s second-largest economy, amassed $3.18 trillion of foreign reserves at the end of last year, provoking accusations from U.S. lawmakers that it was keeping its currency weak to promote exports. The lowered forecasts for China’s current account may reduce pressure on the nation to allow its currency to appreciate, said Eswar Prasad, a former head of the China division at the IMF.
The new IMF outlook “definitely implies that the estimates of under-evaluation are going to be reduced,” said Prasad, a senior fellow at the Brookings Institution in Washington. “The big question is whether” it will be “enough to eliminate the sense of substantial undervaluation,” he said.

Fed Says Economy Grew at ‘Modest to Moderate’ Pace (Source: Bloomberg)
The Federal Reserve said the economy grew in all 12 of its regions as manufacturing, hiring and retail sales showed signs of strength in the face of higher fuel prices. “The economy continued to expand at a modest to moderate pace from mid-February through late March,” the Fed said today in its Beige Book business survey, published two weeks before the Federal Open Market Committee meets to set monetary policy. “Hiring was steady or showed a modest increase across many districts.” The Beige Book offers anecdotal evidence helping policy makers assess an economy that added 120,000 jobs in March, the fewest since October. Fed Chairman Ben S. Bernanke last month said that further “significant” improvements in the unemployment rate would probably require a more-rapid expansion. A “recent decline” in unemployment may reflect “a reversal of the unusually large layoffs that occurred during late 2008 and over 2009,” Bernanke said on March 26.

Unemployment Falls Fast in U.S. If Men Get College Degree (Source: Bloomberg)
After serving time in a Virginia prison following convictions on gun and drug-possession charges, Sean Collins-Harris decided he would fight the odds against his ever returning to white-collar work with the only tool he had: education. “I refused to believe that I was going to be confined to a blue-collar world,” Collins-Harris, 28, says. “If they didn’t open the door for me, I would open my own. If I had a proper education, and learned how to be an organizational leader, I could start my own company; I could do my own thing.” Today, Collins-Harris has a master’s degree and works for a property-management company in Virginia Beach. It took a personal crash that landed him inside St. Brides Correctional Center in Chesapeake, Virginia, where he says he buffed floors for 27 cents an hour, for Collins-Harris to understand what so many young American men don’t.
The U.S. workplace is polarizing between the education haves and have-nots, says David Autor, professor of economics at Massachusetts Institute of Technology in Cambridge. So-called middle-skill jobs, typically well-paying work that doesn’t require extensive higher education, are vanishing, dividing the labor force into high- and low-skill positions. While women are moving up the knowledge ladder, male educational attainment is growing at a slower rate.

Mid-Incomers Suffer in Polarized U.S. Job Market: Economy (Source: Bloomberg)
Americans at the top and bottom of the income scale are benefiting most from the jobs recovery while those in the middle are getting left behind. Employees making above-average wages, like doctors and energy-industry workers, and those at the other extreme, including home-health aides and restaurant staff, have seen outsized gains in hiring since the jobs recovery began in February 2010, say economists at Wells Fargo & Co. and JPMorgan Chase & Co. Professions in the middle, such as financial services and specialty construction, aren’t faring as well. Such a shortfall helps explain why income gains have yet to return to levels seen before the recession began and why consumer spending over the past two years has grown at the slowest pace of any expansion in the post-World War II era. It also points to a pool of unemployed Americans that will prevent wage increases from flaring out of control and fueling inflation as the economy grows.
“If we’re only creating jobs for the highly skilled and for folks with basic skills, then you’re leaving an awful lot of people behind,” said Mark Vitner, a senior economist at Wells Fargo in Charlotte, North Carolina. “Until we have broad-based growth, it’s hard to imagine how we can have a self-sustaining economic recovery.”

U.S. Import Prices Jumped 1.3% in March on Fuel, Materials (Source: Bloomberg)
Prices of goods imported into the U.S. rose more than forecast in March, reflecting higher costs for fuel and industrial materials such as metals. The 1.3 percent gain in the import-price index was the biggest since April 2011 and followed a revised 0.1 percent drop in February that was previously reported as an increase, Labor Department figures showed today in Washington. Economists projected the March gauge would increase 0.8 percent, according to the median forecast in a Bloomberg News survey. Prices excluding fuel climbed 0.5 percent, also the most in 11 months. Even with the jump from a month earlier, import prices over the last year posted the smallest gain since November 2009, indicating slower global growth may help temper inflation pressures. Federal Reserve policy makers said last month that higher fuel prices will prove temporary, allowing them to stick to plans to keep interest rates low at least until late 2014.
“Given what’s been driving import prices, which is the oil component, you’re likely to see a slight moderation or even greater moderation going forward,” said Jacob Oubina, a senior U.S. economist at RBC Capital Markets LLC in New York, who correctly forecast the March figure. “Import prices were certainly a problem for businesses in the last three months, but we’ve seen those pressures ease.”

Yellen Says Jobs Outlook Warrants Accommodative Policy (Source: Bloomberg)
Federal Reserve Vice Chairman Janet Yellen endorsed the Fed’s “highly accommodative” policy, saying central bankers probably won’t achieve their goal of full employment for years while inflation remains in check. “Over the next several years, I anticipate that we will fall far short in achieving our maximum employment objective, and I expect inflation to remain at or below” the Fed’s 2 percent target, Yellen said today in a speech in New York. She said housing and the European debt crisis are among “significant headwinds” that may restrain growth. The policy-setting Federal Open Market Committee last month maintained its view that interest rates are likely to stay low through at least late 2014. Central bankers called for more easing only “if the economy lost momentum” or if inflation stays below their 2 percent inflation target, according to the minutes of their March 13 meeting.
“Considerable uncertainty surrounds the outlook, and I remain prepared to adjust my policy views in response to incoming information,” she said. Further easing “could be warranted if the recovery proceeds at a slower-than-expected pace, while a significant acceleration in the pace of recovery could call for an earlier beginning to the process of policy firming than the FOMC currently anticipates.”

Bo Xilai Ouster May Calm China Passage to Slower Economic Growth (Source: Bloomberg)
Bo Xilai’s downfall and the arrest of his wife on suspicion of murdering a U.K. citizen may have a stabilizing influence on China’s economy by unifying the ruling Communist Party before a once-in-a-decade leadership transition. The party on April 10 suspended Bo from the ruling Politburo, saying he was suspected of committing “serious discipline violations,” China’s official Xinhua News Agency reported. His wife, Gu Kailai, and an aide were put in custody for suspicion of murdering British businessman Neil Heywood, Xinhua reported separately. Bo’s removal may foster more stability in the world’s second-biggest economy ahead of the 18th Communist Party Congress, said Ronald Wan, a Hong Kong-based managing director at China Merchants Securities Co. The congress later this year will pick a new party head and Politburo. Bo, 62, threatened to upset China’s consensus-dependent leadership if he remained in the inner circle, said Jonathan Fenby, China director of the U.K. investment-research service Trusted Sources.
“It paves the way for the new leadership ahead with more stability,” Wan said in a phone interview in Hong Kong yesterday. China Merchants Securities oversees about $1.5 billion in assets.

Solars Drive Biggest Jump in a Month on Easing: China Overnight (Source: Bloomberg)
Chinese stocks traded in the U.S. rallied the most in a month, led by solar companies, on speculation evidence showing the economy continues to slow will prompt more monetary easing. The Bloomberg China-US Equity Index (CH55BN) of the most-traded Chinese stocks in the U.S. added 1.8 percent to 101.22 yesterday in New York, the biggest advance since March 13. Solar company Suntech Power Holdings Co. (STP) was the biggest gainer on the gauge as Satcon Technology Corp., a maker inverters that connect renewable energy to electricity grids, said bookings surged 130 percent in the first quarter from the last three months of 2011. Casino operator Melco Crown Entertainment Ltd. (6883) erased its biggest discount to its Hong Kong stock in a month as Goldman Sachs Group Inc. upgraded the shares to buy.
Official data due tomorrow will show China’s economy expanded 8.4 percent in the first quarter, the slowest pace since 2009, according to the median of 41 economists’ estimates compiled by Bloomberg. Policy makers have cut the amount banks must keep in reserves twice since November to free up cash for lending, in a bid to insulate the world’s second-largest economy from the effects of a global slowdown. Interest rates have been kept at the highest level since 2008 since July.

China’s Growth May Have Slowed Ahead of Wen Revival (Source: Bloomberg)
China’s economy probably expanded at the slowest pace in almost three years in the first quarter, setting the stage for monetary loosening and aid to exporters to drive a rebound and fuel global growth. Gross domestic product rose 8.4 percent from a year earlier following an 8.9 percent increase in the fourth quarter, according to the median estimate of 41 economists surveyed by Bloomberg News ahead of a report tomorrow. The data may also show that industrial production and retail sales accelerated in March while spending on fixed assets slowed. Australia & New Zealand Banking Group Ltd. and HSBC Holdings Plc predict the world’s second-largest economy will pick up this quarter as Premier Wen Jiabao cuts banks’ required reserves and directs funds to infrastructure projects and smaller companies. That would help a global expansion clouded by U.S. job gains that trailed forecasts in March and renewed concern over Europe’s sovereign-debt crisis.
“China’s slowdown is at the end of the tunnel as growth is going to start picking up pace,” said Liu Li-Gang, chief Greater China economist at ANZ in Hong Kong, who previously worked at the World Bank. “A rebound in growth starting this quarter will be a stabilizer for the world recovery as Wen’s measures boost loan growth, offsetting weaker property sales and related consumption.”

Japanese Investors Shun Spain as Crisis Resurfaces (Source: Bloomberg)
Japan’s biggest investors, with $368 billion under management, say it’s too early to buy bonds from Europe’s most indebted nations as rising Spanish yields spark concern the region’s fiscal crisis has further to run. Kokusai Asset Management Co., which runs Asia’s largest mutual fund, Mitsubishi UFJ Asset Management Co., a unit of Japan’s biggest publicly traded bank, and Diam Co., part of the nation’s second-biggest life insurer, are all shunning Spanish debt. Japanese investors sold a net $43.8 billion of euro- denominated bonds in the 12 months ended Feb. 29, according to figures from the Ministry of Finance in Tokyo. “I’m not planning to add Spanish or Italian bonds anytime soon,” said Masataka Horii, who runs the $21.2 billion Kokusai Global Sovereign Open Fund (1131197C) in Tokyo. “The European crisis is moving toward a resolution, but that doesn’t mean the issue is fully solved. It’s not time yet to increase euros.”
The rate on 10-year Spanish bonds rose almost 1 percentage point in the past month, reaching 5.92 percent at 8:26 a.m. London time today. Yields on similar-maturity Italian debt advanced 69 basis points to 5.61 percent in the period.

Japan Machinery Orders Unexpectedly Rise (Source: Bloomberg)
Japan’s machinery orders exceeded all economists’ estimates in February, signaling gains in capital spending that may help to sustain a recovery in the world’s third-biggest economy. Bookings (JNMOCHNG) increased 4.8 percent, the most since November, after rising 3.4 percent the previous month, a Cabinet Office report showed in Tokyo today. The median estimate of 28 economists surveyed by Bloomberg News was for a 0.8 percent decline. Earthquake reconstruction may help the economy maintain momentum after a contraction in three of the past four years and as manufacturers forecast a strengthening yen that will limit exporters’ profits. The Bank of Japan yesterday held off from adding stimulus even as some lawmakers urge more aggressive easing to end deflation and spur growth.
“Today’s report points to a gradual recovery in capital spending,” said Junko Nishioka, chief economist at RBS Securities Japan Ltd. in Tokyo. “Japan’s economy should have returned to growth in the first quarter and the expansion may continue this quarter.”

S. Korea Ruling Party Wins Majority Ahead of North Launch (Source: Bloomberg)
South Korea’s ruling party retained control of parliament in a boost to President Lee Myung Bak ahead of a North Korean rocket launch that may take place as early as today. Lee’s New Frontier Party won 152 of the 300 seats in the National Assembly while the main opposition Democratic United Party secured 127 and the smaller United Progress Party took 13, the election commission said on its website. The remaining eight seats are held by a minor party and independents. The victory may give NFP chief Park Geun Hye, daughter of former President Park Chung Hee, momentum heading into the December presidential contest. Lee’s popularity has fallen by half since his single five-year term began in 2008 amid public discontent with rising inflation and slowing growth.
“The NFP’s continued parliamentary majority will protect Lee Myung Bak from an opposition eager to accelerate his lame duck phase and hasten the end of his rule,” said Park Won Ho, a professor of political science at Seoul National University. “Park Geun Hye has successfully distanced the party from the Lee administration’s failures, which will clearly boost her as a person fit to be a future president.”

Coeure Triggers Bets ECB Will Restart Bond Purchases for Spain (Source: Bloomberg)
European Central Bank Executive Board member Benoit Coeure triggered speculation that the bank will revive its bond-purchase program to lower Spain’s borrowing costs as the region’s debt crisis threatens to boil over again. Spanish “market conditions are not justified,” Coeure, who heads the ECB’s market operations division, said at an event in Paris today. “Will the ECB intervene? We have an instrument, the securities markets program, which hasn’t been used recently but it still exists.” The euro rose and Spanish bond yields declined as Coeure’s comments reassured investors that the ECB will act again if needed to stem the crisis. With Spain’s three-month-old government struggling to reduce the budget deficit and crack down on overspending by regional administrations, borrowing costs have surged, nearing the levels that precipitated bailouts for Greece, Portugal and Ireland.
“We expect a very significant intensification of the euro- area debt crisis to materialize this quarter as the market refocuses on the fundamentals and the fiscal challenges of each country,” said Silvio Peruzzo, an economist at Royal Bank of Scotland Group Plc in London. “The ECB should be preparing itself” for “the return of significant financial market tensions.”

Rajoy Says Spain Future at Stake as Debt Crisis Persists (Source: Bloomberg)
Prime Minister Mariano Rajoy said Spain’s future is on the line in its battle to tame surging bond yields, as the head of the nation’s second-largest region proposed handing back powers to the government to cut costs. With Spanish bonds trading closer to levels that prompted Greece, Ireland and Portugal to seek European bailouts, Rajoy will address lawmakers of his People’s Party today to explain the deepest budget cuts in three decades. The prime minister will speak at 1 p.m. in Madrid. “Without a doubt, a good part of Spain’s future is at stake,” Rajoy told senators yesterday, as he urged regional governments to contribute to spending cuts. “The problem is that the markets can lend or decide not to lend.”
Rajoy has stepped up his rhetoric in the past week as he seeks to persuade Spaniards to accept spending reductions and tax increases as a less painful alternative to a bailout. His three-month-old government is struggling to convince investors it can reduce the deficit by a third this year and crack down on overspending by regional administrations.

Germany Grows Robust from Sick Man With Demand at Home (Source: Bloomberg)
Germany’s economic expansion is increasingly home-grown. Unemployment at a two-decade low, wages accelerating out of years of restraint and falling borrowing costs are spurring consumers in Europe’s linchpin economy to spend more. Showcased by rising property prices, that’s at odds with the rest of the euro area, where austerity and the bursting of debt-fueled asset bubbles are forcing households to cut back. Economists from HSBC Holdings Plc to BNP Paribas SA are responding by raising forecasts for German growth and declaring that domestic demand is emerging as a rival to exports as the economy’s driver. The rejuvenation may help strengthen and rebalance the rest of the euro area, even as it makes it tougher for the European Central Bank to set a one-size-fits-all monetary policy.
“Ten years ago, Germany was the ‘sick man of Europe,’” said Holger Schmieding, London-based chief economist at Berenberg Bank, Germany’s oldest bank. Now, “Germany will enjoy a golden decade of more growth and employment with a healthy fiscal balance.”

Investment surge expected for "gold mine" Myanmar - ADB
BANGKOK, April 10 (Reuters) - Myanmar's hermit economy could boom on an anticipated influx of foreign investment in a "gold mine" of opportunities once sanctions are lifted, the Asian Development Bank's country manager for Myanmar said on Tuesday.
Growth is expected to be 6 percent this fiscal year and 6.3 percent for 2013-2014, but that is likely to be surpassed if Western sanctions are undone and investment pours in to one of Asia's last remaining frontier markets, much through public private partnerships (PPP), said Craig Steffensen, the ADB's country manager for Myanmar and Thailand.

Baltic sea index flat on slack trade, capesizes up
April 10 (Reuters) - The Baltic Exchange's main sea freight index, which tracks rates for ships carrying dry commodities, was little changed on Tuesday as sluggish activity for smaller vessels offset an uptick in capesize rates.
The overall index, which gauges the cost of shipping commodities such as iron ore, cement, grain, coal and fertilizer, was steady at 928 points. The index has fallen more than 46 percent this year.

20120412 1110 Global Commodities Related News.

Farmland Rally May Ease as Crop Prices Drop, Economists Say (Source: Bloomberg)
The pace of gains in U.S. farmland values may ease as crop prices decline and fertilizer and fuel costs rise, according to economists including Ken Keegan at Farm Credit Services of America. Declining profit indicates that farmers, who dominate rural land purchases, probably won’t bid prices higher, Ken Keegan, the chief risk officer at Farm Credit Services in Omaha, Nebraska, said today at a forum in Washington. Low interest rates and agricultural debt make a plunge from a record rally in farmland unlikely, he said. “You have many buyers who feel we have reached a price point that is difficult for them to justify,” said Keegan, whose bank owns and manages $21.8 billion in assets in Iowa, South Dakota, Nebraska and Wyoming. “We’ve reached levels where you have to be very bullish” on farm profitability to justify higher land prices, he said.
The average value of an acre of U.S. farmland climbed to a record $2,350 in 2011, according to the U.S. Department of Agriculture. Last year, Midwest prices measured by the Federal Reserve Bank of Chicago rose 22 percent, the most since 1976, while the Federal Reserve Bank of Kansas City said cropland in its region jumped 25 percent and ranch land gained 14 percent, according to reports in February.

China's March commodities imports ease; stock levels a worry
SHANGHAI, April 10 (Reuters) - China's imports of major commodities fell in March from a month ago, but defied expectations of large corrections to hover near recent highs, as companies built stocks in hopes the world's second-largest economy would pick up in the second quarter.
Economic data released so far offers further proof that China, a major driver of global commodities prices, is at no risk of a hard landing and its appetite for raw materials will continue to grow, although at a slower pace.

GRAINS-U.S. grains down on USDA data, soybean futures ease
SYDNEY, April 11 (Reuters) - Chicago corn and wheat futures fell on the back of weak U.S. Department of Agriculture data.
"Analysts were looking for a reduction in U.S. stocks, and the USDA didn't do anything to the balance sheet, and that is leading the weakness in corn especially," said Victor Thianpiriya, agriculture analysts at ANZ.

Australia delays Viterra grain export auction plan
SYDNEY, April 11 (Reuters) - Australia's competition regulator has halted a proposal by grain handler Viterra  to auction port capacity after similar auctions in other parts of the country have exposed problems allocating capacity despite a bumper harvest.      
Viterra, Canada's largest grain handler, has been working on plans to introduce an auction system to allocate port terminal capacity in South Australia from May this year.

Philippines' NFA to seek bids for 120,000 T rice deal
MANILA, April 11 (Reuters) - The Philippines' state grains procurement agency said on Wednesday it would seek bids from rice exporters Vietnam, Thailand and Cambodia for a 120,000-tonne supply deal as it seeks to boost buffer stocks before the lean harvest season.
"We will issue invitations to them this week or next week to submit sealed offers," National Food Authority (NFA) Administrator Angelito Banayo told Reuters.

France sees 2012 spring barley area up 69 pct yr-yr
PARIS, April 10 (Reuters) - France's farm ministry on Tuesday put the 2012 spring barley estimate at a record 825,000 hectares, up 69 percent on 2011, as farmers planted more spring barley to offset cold-related damage.
"Frost damage in February, mainly in the North and East regions lead to soil inverting and replacement with spring crops," the ministry said in a note.

Spain rain helps relieve drought, more needed
LONDON, April 10 (Reuters) - Long-awaited heavy rains fell on Spanish winter grains crops last week, official data showed on Tuesday, although farmers and traders say more is needed to soften the impact of a drought and avoid raising hefty import requirements.
Rainfall recorded by the Ministry for Agriculture and the Environment in the week to April 10  was 21 percent above the historical (1930-96) average.

U.S. grains down on USDA data, soybean futures ease (Source: CME)
By Thomson Reuters - Wed 11 Apr 2012 09:29:08 CT
Chicago corn and wheat futures fell on the back of weak U.S. Department of Agriculture data. "Analysts were looking for a reduction in U.S. stocks, and the USDA didn't do anything to the balance sheet, and that is leading the weakness in corn especially," said Victor Thianpiriya, agriculture analysts at ANZ.

Drought punishes Brazil soy crop; corn crop surges (Source: CME)
By Thomson Reuters - Wed 11 Apr 2012 10:09:40 CT
Drought blighting Brazil's soybean crop sliced more than 3 million tonnes off the government's 2011/12 estimate on Tuesday and will buoy futures prices for the key source of protein and livestock feed by trimming exports. Soy output from the No. 2 producer after the United States will fall to 65.6 million tonnes this season, which is weeks away from finishing harvest, despite the 3.4 percent expansion in area to a record 25 million hectares (62 million acres).

Corn futures firmed late to end 1 1/4 cents higher in the May and July contracts, while the September through July 2013 contracts ended 3 to 3 3/4 cents higher. Far-deferred contracts ended around a penny higher. Price action was light and choppy in the corn market today as traders further digested USDA's Supply & Demand Report, while also keeping a watch on outside markets. (Source: CME)

Corn Market Recap for 4/11/2012 (Source: CME)
Wed 11 Apr 2012 14:30:01 CT
May Corn finished up 1 1/4 at 636, 3 3/4 off the high and 5 1/4 up from the low. July Corn closed up 1 1/4 at 627. This was 4 1/4 up from the low and 3 1/4 off the high. The market managed to close slightly higher on the session for old crop and the gains were a few cents better for new crop December corn. Talk that the cold weather this week plus wet weather for the weekend and early next week helped to support the market and buyers saw the market as cheap after the break of the past several trading sessions. The market saw some early buying support from ideas that the break yesterday was a bit overdone and from supportive outside market forces. The weaker US dollar and a strong recovery in the US stock market helped to support the market early. In addition, a jump in ethanol production and a drop in stocks for the same week added to the positive tone. Weakness in soybeans limited the advance. Ethanol production for the week ending April 6th averaged 896,000 barrels per day. This is up 2.6% vs. last week and down 0.22% vs. last year. Total Ethanol production for the week was 6.272 million barrels. Corn used in last week's production is estimated at 95.4 million bushels. Corn use needs to average 94.1 million bushels per week to meet the USDA estimate for the season. Stocks were 21.772 million barrels, down 3.5% vs. last week and up 6.13% vs. last year. Traders see weekly export sales for release tomorrow morning near 600,000 tonnes as compared with 1.122 million tonnes last week. May Rice finished up 0.07 at 14.935, equal to the high and 0.095 up from the low.

Wheat futures settled off their highs, with Chicago wheat around 2 to 3 cents higher; Kansas City roughly 3 cents higher; and Minneapolis wheat fractionally to 5 1/4 cents higher. Chicago and Kansas City wheat benefitted from some corrective short-covering today amid ideas the downside was overdone yesterday. A weaker dollar added incentive to do so. (Source: CME)

Wheat Rises as Cold U.S. Weather May Slow Crop Development (Source: Bloomberg)
Wheat rose on speculation that cold weather in U.S. growing areas may slow development of plants that have begun to emerge from the ground. Plant germination for some spring wheat sown early in the northern Great Plains may be delayed by temperatures that have dropped below freezing, Telvent DTN Meteorologist Joel Burgio said in a report today. Frigid weather in Illinois and Indiana, where wheat is emerging after lying dormant during the winter, may hurt crops, Chicago-based QT Weather said. “It probably got cold enough that there’s going to be some talk about damage in the Dakotas,” Mike Zuzolo, the president of Global Commodity Analytics in Lafayette, Indiana, said in a telephone interview. The temperature fell to 21 degrees Fahrenheit (minus 6 degrees Celsius) yesterday in Montana, and “that’s where the heart and soul of these bullish fundamentals lie,” he said.
Wheat futures for July delivery climbed 0.2 percent to close at $6.335 a bushel at 1:15 p.m. on the Chicago Board of Trade. The price has dropped 2.9 percent this year on speculation that production in the U.S., the world’s biggest exporter, will increase because of favorable weather.

Wheat Seen Extending Decline as Inventory Rises to Record (Source: Bloomberg)
Wheat prices are falling for a second year as a glut of supply expands global stockpiles to an all-time high and farmers prepare to reap the third-biggest harvest on record. Inventories will gain 7.1 percent to 210 million metric tons this year and output in the next year of 681 million tons will have been exceeded only twice in history, the London-based International Grains Council predicts. Prices will average $6.38 a bushel in the fourth quarter, about 5.2 percent below the December futures contract traded in Chicago, the median of 10 analyst estimates compiled by Bloomberg shows. The crop erased this year’s gains on April 4 on easing concern that drought in the U.S. and Europe will ruin crops. Prices have tumbled from as much as $13.495 four years ago as farmers responded by growing more grain. The decline is helping contain global food costs, which remain within about 9 percent of the all-time high reached 14 months ago, according to a gauge of 55 commodities compiled by the United Nations.
“Wheat is fundamentally oversupplied,” said Nick Higgins, a London-based analyst at Rabobank International who expects a fourth-quarter average of $5.95, which would be the lowest for the period since 2009. “The concerns over damage to the European crop are overdone, when you compare them to the supply glut in the rest of the world.”

Wheat Market Recap Report (Source: CME)
Wed 11 Apr 2012 14:30:01 CT
May Wheat finished up 2 1/4 at 628, 5 3/4 off the high and 8 1/4 up from the low. July Wheat closed up 1 1/2 at 633 1/2. This was 6 3/4 up from the low and 6 1/2 off the high. The market managed to close slightly higher on the day after choppy and two-sided trade. Ideas that areas of the southeast could be vulnerable to some crop losses with more cold weather tonight may have helped to provide some support. The market traded as much as 8 cents higher overnight as cold weather may have caused some light crop damage across parts of the southern Corn Belt. However, most traders see some leave burn back and a quick recovery in crop conditions as permanent damage was not expected for most areas. A weak US dollar and a jump in the stock market after the sharp break yesterday were also seen as factors which contributed to the early buying. However, there was not much in the way of follow-through buying and the market pulled off of the early highs with weakness in soybeans contributing to the lack of new buying interest. Traders see weekly export sales for release tomorrow morning near 500,000 tonnes as compared with 511,700 tonnes last week. May Oats closed down 3 3/4 at 329 1/4. This was 2 3/4 up from the low and 6 1/2 off the high.

U.S. grains down on USDA data, soybean futures ease
SYDNEY, April 11 (Reuters) - Chicago corn and wheat futures fell on the back of weak U.S. Department of Agriculture data.
"Analysts were looking for a reduction in U.S. stocks, and the USDA didn't do anything to the balance sheet, and that is leading the weakness in corn especially," said Victor Thianpiriya, agriculture analysts at ANZ.

Global cotton stocks to hit record as China builds-USDA
April 10 (Reuters) - Global cotton stocks are expected to hit a record high in the 2011/12 season on the back of rampant restocking by Beijing's strategic reserve and due to a drop in demand, according to the U.S. Department of Agriculture's monthly supply/demand report.
World ending stocks are expected to rise to 66.07 million bales (480-lb) for the marketing season to July 31, the USDA said on Tuesday, raising its forecast by 4 million bales since March.

Brazil '12/'13 sugar output seen up from prior season
BRASILIA, April 10 (Reuters) - Brazil's sugar output will rise about 5 percent in the 2012/13 season that is now starting, the government forecast on Tuesday, as better weather and replacement of old cane plants have the crop on a recovery path after output dipped last season.
Sugar production should rise to 38.9 million tonnes, government crop supply agency Conab said in its first forecast of the season, up from 36.9 million tonnes in the prior season and also ahead of the 38.2 million tonnes produced in the season before that.
France sees 2012 spring barley area up 69 pct yr-yr
PARIS, April 10 (Reuters) - France's farm ministry on Tuesday put the 2012 spring barley estimate at a record 825,000 hectares, up 69 percent on 2011, as farmers planted more spring barley to offset cold-related damage.
"Frost damage in February, mainly in the North and East regions lead to soil inverting and replacement with spring crops," the ministry said in a note.
US cuts Latam soy estimate due drought, prices rise
WASHINGTON, April 10 (Reuters) - funA drought in major soybean producers Brazil and Argentina cut their production more deeply than expected, the U.S. government said Tuesday in a report that drove prices to near their highest since 2008.
While a more than 20 percent rally in soybean prices this year has reignited concerns over food prices, the outlook for corn supplies appeared upbeat after the Agriculture Department said end-season stockpiles would be higher than traders estimated as ranchers use more wheat in livestock rations.

SOFTS-Sugar consolidates, cocoa at 3-month low
LONDON, April 11 (Reuters) - Raw sugar futures on ICE were little changed in early trading on Wednesday, consolidating after the prior session's selloff triggered by a larger-than-expected Brazilian crop forecast.
Raw sugar futures were consolidating after selling pressure on Tuesday due to news that Brazil's government crop supply agency Conab said Brazil's sugar production should rise 5.3 percent to 38.9 million tonnes in 2012/13.

EU 12/13 cotton area, output seen stable
April 10 (Reuters) - Following are selected highlights from a report issued by a U.S. Department of Agriculture attache in the European Union
"Only two European Union member states-Greece (80 percent) and Spain (20 percent)-grow significant amounts of cotton commercially. EU-27 cotton production, which has declined about 50 percent since the 2006 reforms, represents less than 1 percent of world production, consumption, and trade.

Forecasts for Brazil's 2012/13 CS cane crop
April 10, (Reuters) - Brazil's center-south 2012/13 sugarcane harvest is expected to expand this year after disappointing output in the 2011/12 season blamed on a mixture of bad weather and overdue renewal of ageing cane plants. Harvesting is expected to start in April.
Below is a table with forecasts from key Brazilian and foreign forecasters with clickable links to the related stories. The first official government forecast is due on April 10.

Brazil '12/'13 sugar output seen up from prior season
BRASILIA, April 10 (Reuters) - Brazil's sugar output will rise about 5 percent in the 2012/13 season that is now starting, the government forecast on Tuesday, as better weather and replacement of old cane plants have the crop on a recovery path after output dipped last season.
Sugar production should rise to 38.9 million tonnes, government crop supply agency Conab said in its first forecast of the season, up from 36.9 million tonnes in the prior season and also ahead of the 38.2 million tonnes produced in the season before that.

Brazil '12/'13 sugar output seen up from prior season (Source: CME)
By Thomson Reuters - Wed 11 Apr 2012 10:08:17 CT
Brazil's sugar output will rise about 5 percent in the 2012/13 season that is now starting, the government forecast on Tuesday, as better weather and replacement of old cane plants have the crop on a recovery path after output dipped last season. Sugar production should rise to 38.9 million tonnes, government crop supply agency Conab said in its first forecast of the season, up from 36.9 million tonnes in the prior season and also ahead of the 38.2 million tonnes produced in the season before that.

Cotton futures spent most of the day in positive territory, but lost steam heading into the close and finished 165 and 4 points higher in May and July futures, respectively, while deferred months posted slight losses. This equated to a mid- to low-range close. Cotton traders had a mix of supply and demand data to digest today, with much of the news coming from India.  (Source: CME)

Gasoline May Have Peaked on Sliding Demand, Slow Job Growth (Source: Bloomberg)
U.S. gasoline pump prices may have peaked for the year as demand slides, job growth slows and crude prices moderate. Regular gasoline, averaged nationwide, has fallen five straight days to $3.915 a gallon, the longest streak since December, after surging 20 percent and peaking at $3.936 on April 4, according to data from AAA, the biggest U.S. motoring club. Americans have purchased 5.3 percent less gasoline so far this year than in 2011, data from credit-card receipts analyzed by MasterCard Inc.’s SpendingPulse showed yesterday. Deliveries (DOEDMGAS) to wholesalers last week fell 5.4 percent from a year earlier, the Energy Department reported today. The department forecast consumption to decline to 8.65 million barrels a day in 2012, the lowest level in 11 years. The U.S. added the fewest jobs in five months in March, the Labor Department said April 6, limiting prospects for higher demand.

Euro Coal-Prices stable, China buys Colombian cargoes
LONDON, April 10 (Reuters) - European physical coal prices were little changed on Tuesday as the market remained subdued after the Easter holiday weekend and no fresh trades were reported.
The market is unlikely to rebalance and be able to absorb the current oversupply until the autumn when demand is expected to increase, traders said.

Asia takes most of S.Africa's March coal-exporters
LONDON, April 10 (Reuters) - Asia again absorbed most of South Africa's 6.3 million tonnes of  coal exports in March, led by India, China and Taiwan, exporters said.
India took 1.9 million tonnes of coal in the month, unchanged from February, while China increased its imports to 1.3 million tonnes from 965,000 tonnes in February.

U.S. crude avoids rout, other reportables support
--John Kemp is a Reuters market analyst. The views expressed are his own--  
LONDON, April 10 (Reuters) - In contrast to May 2011, hedge funds and other money managers have so far managed to liquidate a large chunk of their long positions in U.S. crude  without triggering a violent sell off.
Money managers cut their net long position in WTI-linked futures and options more than 30 million barrels in the seven days ending April 3. It was the largest drawdown so far in the current cycle, which began on February 28, and takes the total liquidation to around 64 million barrels.

Russia's May crude export fee seen falling
MOSCOW, April 11 (Reuters) - Russia's duty on crude oil exports for May will likely decline to between $448.3 and $451.6 per tonne from $460.7 in April after oil prices weakened, calculations by the finance ministry and Reuters showed on Wednesday.
The government officially announces the export duty at the end of each month. The duty rate for May will be based on the monitoring of Reuters seaborne Urals  crude oil prices between March 15 and April 13 inclusive.

Oil falls below $120, inventories weigh
LONDON, April 11 (Reuters) - Oil fell below $120 a barrel on Wednesday to the lowest in almost two months, pressured by rising U.S. inventories and concern about the strength of global demand.
"The broader markets, including oil, are on a risk-off mode at this point because of the series of negative numbers we have seen recently," said Natalie Robertson, an analyst at ANZ. "Oil markets would be flat to lower over the next few days, with support coming in if there are worries on the supply side."

Oil Trades Near One-Week High on Declining U.S. Fuel Stockpiles (Source: Bloomberg)
Oil traded near the highest price in almost a week after fuel stockpiles declined in the U.S., the world’s biggest crude consumer. Futures were little changed after rising for the first day in three yesterday. Gasoline supplies fell 4.3 million barrels last week, data from the Energy Department showed. They were projected to drop 1.38 million barrels, according to a Bloomberg News survey. Oil also gained after a European Central Bank official signaled the lender may revive its bond-purchase program to stem the spread of the region’s debt crisis. Crude for May delivery was at $102.62 a barrel, down 8 cents, in electronic trading on the New York Mercantile Exchange at 9:16 a.m. Sydney time. The contract yesterday climbed $1.68, or 1.7 percent, to $102.70, the highest close since April 5. Prices are up 3.8 percent this year.
Brent oil for May settlement rose 30 cents, or 0.3 percent, to $120.18 a barrel on the London-based ICE Futures Europe exchange yesterday. The European benchmark contract’s premium to New York-traded West Texas Intermediate closed at $17.48. U.S. distillate inventories, a category that includes diesel and heating oil, declined 4 million barrels last week, the Energy Department report showed. They were forecast to slip 250,000 barrels, according to the median estimate of 10 analysts in the Bloomberg survey. Crude stockpiles rose 2.8 million barrels compared with a projected increase of 2 million.

Oil Extends Gain as Distillate, Gasoline Inventories Drop (Source: Bloomberg)
Oil rose after the U.S. Energy Department said that fuel stockpiles declined and as a European Central Bank official signaled the lender may act to stem the spread of the region’s debt crisis. Futures climbed 1.7 percent after the department reported that gasoline inventories fell 4.28 million barrels last week. Supplies of distillate fuel, a category that includes heating oil and diesel, dropped 4 million barrels. Oil also gained after Benoit Coeure, a member of the ECB executive board, suggested the bank may restart bond purchases for Spain. “The drawdown in gasoline and distillate was the big surprise today,” said Chris Dillman, an analyst and broker at Tradition Energy in Stamford, Connecticut. “The product supply numbers are sending the entire market higher.” Crude oil for May delivery rose $1.68 to settle at $102.70 a barrel on the New York Mercantile Exchange. Prices are up 3.9 percent this year.

China Coal shares suspended due to flooding accident
HONG KONG, April 11 (Reuters) - Trading in shares of China Coal Energy Co Ltd  was suspended in Hong Kong and Shanghai on Wednesday, pending an announcement about a deadly accident at a coal mine run by subsidiary Shanghai Datun Energy Resources Co Ltd , company officials said.
The Hong Kong stock exchange said China's second-largest coal miner was suspended from trading pending "price-sensitive information". It gave no further details.

Trading houses deepen Japan's Iran oil import cuts-sources
SINGAPORE/TOKYO, April 10 (Reuters) - Japanese trading houses are reducing Iranian crude imports from April, industry sources said on Tuesday, joining the country's refiners in deepening cuts even after the United States said Japan had done enough to support sanctions against Iran.
The U.S. and European Union have tightened measures aimed at reducing Iran's oil trade, stemming the flow of petrodollars to Tehran and forcing the Islamic Republic to halt a nuclear program the West suspects is intended to produce weapons.

Brent steady at $120; demand growth worries weigh
SINGAPORE, April 11 (Reuters) - Brent crude held at $120, after posting steep losses in the previous session, as a cut in global oil consumption forecast by the EIA and an unexpected surge in U.S. crude stocks reinforced fears demand growth may slow.
"The broader markets, including oil, are on risk-off mode at this point because of the series of negative numbers we have seen recently," said Natalie Robertson, an analyst at ANZ. "Oil markets would be flat to lower over the next few days, with support coming in if there are worries on the supply side."

Top Analysts See Copper Rising Even as China Slows: Commodities (Source: Bloomberg)
The third consecutive annual copper shortage and accelerating U.S. growth will drive prices to the highest in a year in the next quarter, according to the most accurate forecasters. Global supply will fall 323,000 metric tons short of demand in 2012, more than Europe consumes in a month, Barclays Capital estimates. Hedge funds, which were betting on lower prices as recently as January, and are now the most bullish in eight months, Commodity Futures Trading Commission data show. The metal will average $9,000 a ton in the third quarter, 11 percent more than now, according to the median estimate of the top five analysts in Bloomberg Rankings over the past eight quarters.
Copper is rebounding from a 21 percent slump in 2011 as data showed a strengthening U.S. economy and as European leaders moved to contain the region’s debt crisis. North America and Europe account for 29 percent of demand, Barclays estimates. While China cut its growth target to the lowest in eight years last month, the world’s biggest copper buyer will still be expanding at more than twice the global pace predicted by the International Monetary Fund. “The U.S. economy is pretty good,” said James Paulsen, the chief investment strategist at Minneapolis-based Wells Capital Management, which oversees about $333 billion of assets. “Emerging markets should start to pick up. Some time by the end of the year we may look back at commodity prices in general and copper in particular and say this was a good time to buy.”

Copper Extends Slide to Lowest Since January as Demand May Slow (Source: Bloomberg)
Copper fell in New York to the lowest price since mid-January as signs of a worsening debt crisis in Europe and slowing growth in China fueled concern that demand for the metal will stall. Rising bond yields and missed deficit targets in Spain signaled that the region’s fiscal crisis may escalate. Today’s drop for copper is the third straight and follows a report yesterday showing imports of the metal fell from a month earlier in China, the world’s biggest user. “Concerns about the health of the global economy are weighing on copper,” Frank Cholly, a senior commodity broker at RJO Futures in Chicago, said in a telephone interview. “The Euro-zone crisis may reignite. It looks like China is slowing.” Copper futures for May delivery fell 0.3 percent to settle at $3.6395 a pound at 1:14 p.m. on the Comex in New York, after reaching $3.6305, the lowest since Jan. 17. The metal has dropped 4.1 percent this week, the biggest three-session slump in a month.

Alcoa Posts Surprise Profit After Aluminum Orders Climb (Source: Bloomberg)
Alcoa Inc. (AA), the largest U.S. aluminum producer, reported an unexpected first-quarter profit after orders rose and it closed higher-cost smelting capacity. The shares advanced in German trading. Net income fell to $94 million, or 9 cents a share, from $308 million, or 27 cents, a year earlier, New York-based Alcoa said yesterday in a statement. Profit excluding restructuring costs and other items was 10 cents a share, compared with the average estimate for a 4-cent loss from 19 analysts surveyed by Bloomberg. Sales rose 0.8 percent to $6.01 billion, beating the $5.77 billion average of 12 estimates. The shares rose the most in three months in New York. The earnings were “driven by higher-than-expected profitability from every operating segment,” Brian Yu, an analyst at Citigroup Inc. in San Francisco who estimated a 6- cent loss, said in a note. “Good cost control likely played a major role.”
Alcoa, traditionally the first company in the Dow Jones Industrial Average (INDU) to report quarterly earnings, announced it would shut older plants in North America and Europe in January. Chief Executive Officer Klaus Kleinfeld is proceeding with an $11 billion joint venture in Saudi Arabia, which Alcoa says will be the world’s most efficient integrated aluminum plant.

LME copper edges up after sell-off, Shanghai down
SINGAPORE, April 11 (Reuters) - London copper rose, regaining some ground after sliding nearly 4 percent in the previous session in a broad-based sell-off some analysts thought may have been overdone with top consumer China's copper imports staying high in March.
"Our view is that underlying Chinese demand is still solid and we think it should pick up heading into the second quarter," said Natalie Robertson, analyst at Australia and New Zealand Bank.

Alcoa trims its aluminum demand outlook for China
NEW YORK, April 10 (Reuters) - Alcoa Inc.  said on Tuesday it lowered by 1 percentage point its outlook for China's aluminum consumption growth in 2012, but kept its forecast for global demand growth at 7 percent.
In 2011, global primary aluminum use grew by 10 percent.
Novelis sees China aluminium demand up 7-8 pct/yr
SHANGHAI, April 11 (Reuters) - Aluminium demand is expected to grow at an annual rate of 7-8 percent in China and 4-5 percent globally, for an indefinite number of years, the chief executive of Novelis Inc  said on Wednesday.
Phil Martens, CEO of the world's top maker of aluminium rolled products and aluminium can recycling, was speaking in an interview before a news conference to announce the company's construction of its first aluminium rolled facility in China.
Alcoa continues to look for more capacity cuts-CEO
NEW YORK, April 10 (Reuters) - Alcoa Inc.  continues to look for high-cost smelting and refining capacity for potential capacity cuts, a goal that chief executive Klaus Kleinfeld called a "strong commitment."
Speaking to analysts on Tuesday's conference call after the aluminum giant released its first-quarter results, Chairman and Chief Executive Klaus Kleinfeld said: "We continue to look at our portfolio and we continue to monitor the outside world. And by the way, the 530,000 tonnes that we've taken offline may not be the end."

Iron Ore-Buyers trickle in, but caution stays
SINGAPORE, April 11 (Reuters) - Spot iron ore prices in top importer China rose on Wednesday as buyers slowly returned to the market to refill stockpiles, exercising caution with steel production still outpacing a slow recovery in demand.
Prices of imported ore, including Australian and Indian cargoes, increased by a dollar per tonne in China, said industry consultancy Umetal.

China March iron ore imports remain high on strong steel output
BEIJING, April 10 (Reuters) - China's iron ore imports slipped in March but still remained high as healthy Chinese steel output kept the appetite for the raw material strong in the world's second-largest economy.
Robust demand for iron ore from the world's top buyer has driven up prices by around 7 percent this year, with the Steel Index's 62 percent benchmark climbing $4.7 from February to touch a five-month high of $147.7 a tonne in March.

China iron ore demand to remain strong - Vale CEO
RIO DE JANEIRO, April 10 (Reuters) - Chinese demand for iron ore will remain strong, defying expectations of a slowdown in the world's second-largest economy, the chief executive of Vale SA , the top producer of the mineral, said on Tuesday.
"Those who have been betting against Chinese growth since the 1990s will be wrong again," CEO Murilo Ferreira told reporters in Rio de Janeiro. "China is just getting going."

Gold edges lower after 4-day rally as investors turn cautious
SINGAPORE, April 11 (Reuters) - Gold edged lower, pausing after four sessions of consecutive gains driven by safe-haven flows on a cloudy global economic outlook, but sentiment has turned cautious as investors  seek further clues to growth.
"Gold is vulnerable to the next leg of risk sell-off, as it doesn't like being the only metal to be trading higher in a sea of red," said a Singapore-based trader, since investors tend to liquidate gold positions to cover losses elsewhere.

Hong Kong Feb gold flow to China up 20 pct on month
SINGAPORE, April 11 (Reuters) - China's gold imports from Hong Kong rose 20 percent in February from the previous month as an uncertain economic environment continued to boost gold appetite in China.
China is expected to overtake India as the world's top gold consumer this year after demand for gold exploded last year as the Chinese sought a hedge against rampant inflation and a safe-haven during global economic turmoil.

India to challenge U.S. duty on steel pipes-source
NEW DELHI, April 10 (Reuters) - India is preparing to challenge a U.S. import duty on steel pipes by requesting "consultations" at the World Trade Organisation, a senior trade ministry official said, in the latest in a series of recent disputes between the two allies.
The United States Commerce Department in March set a preliminary import duty of nearly 286 percent on a certain type of steel pipe from India to offset government subsidies. A final decision on duty rates is expected by August.

Egypt's Ezz Steel 2011 net profit falls 20 pct
CAIRO, April 10 (Reuters) - Egypt's largest steel producer, Ezz Steel , posted a 20 percent drop in 2011 net profit on Tuesday as soaring costs and higher taxes offset a rise in sales during a year of economic and political turmoil.  
An uprising ousted President Hosni Mubarak in February last year and the turmoil rocked Ezz Steel, which gets much of its business from infrastructure and real estate sectors that were plunged into crisis.

Indonesia's March refined tin exports down 4.9 pct y/y- govt
JAKARTA, April 10 (Reuters) - Refined tin shipments from Indonesia, the world's top exporter, fell 4.9 percent in March compared to a year ago, mostly due to heavy rainfall, a trade ministry official said on Tuesday.
Indonesian refined tin exports for March were 8,607.71 tonnes from 9,051.46 tonnes a year earlier, said the official, who asked not to be named.

METALS-LME copper edges up after sell-off, Shanghai down
SINGAPORE, April 11 (Reuters) - London copper rose on Wednesday, regaining some ground after sliding nearly 4 percent in the previous session in a broad-based sell-off some analysts thought may have been overdone with top consumer China's copper imports staying high in March.
Copper futures in Shanghai lost almost 3 percent to hit three-month troughs, tracking the steep decline in London on Tuesday, but have managed to come off early lows.

PRECIOUS-Gold edges lower after 4-day rally as investors turn cautious
SINGAPORE, April 11 (Reuters) - Gold edged lower on Wednesday, pausing after four sessions of consecutive gains driven by safe-haven flows on a cloudy global economic outlook, but sentiment has turned cautious as investors  seek further clues to growth.
Euphoria over a U.S. economic recovery was cut short by a disappointing employment report that showed far slower jobs expansion than expected, and led investors to question the outlook for the world's largest economy.