Wednesday, March 16, 2011

20110316 0850 Global Market Related News.

Chart reading : Downside biased with possible pullback correction
Chart reading : Downside biased with possible pullback correction
Chart reading : Downside biased with possible pullback correction
Chart reading : Downside biased with possible pullback correction


Overnight European and U.S. market traded lower.
Meanwhile, Japan market are currently trading at recovery pace up 534pts.

U.S. corn drops to 2-month low on Japan fears
SINGAPORE, March 16 - U.S. corn extended losses on Wednesday, after sliding by its daily limit in the last session on fears of a Japanese nuclear catastrophe, but wheat and soy both rallied more than half a percent with Asia cautiously buying after the steep selloff.
"Grains have come down too far, too fast. The trade at the moment is to sell corn, buy wheat and soy. Weather concerns for corn had built in more of a premium," said Jonathan Barratt, managing director, Commodity Broking Services.

China farmers to grow more grains, cotton; less soy
BEIJING, March 16 (Reuters) - Chinese farmers plan to grow more grains and cotton this year while acreage for soy and sugar crops are likely to fall, the ministry of agriculture said.
Grain acreage is likely to grow 0.3 percent this year from last year, of which farmers intend to grow 2.1 percent more corn and 1.9 percent more rice in northeast provinces, the country's corn belt, the ministry said, citing a survey of farmers.

US farm supports, food stamps eyed for budget cuts
WASHINGTON, March 15 (Reuters) - From food stamps to crop subsidies, all U.S. agricultural programs are on the table for potential budget cuts as part of federal belt-tightening, said leaders of the House Agriculture Committee on Tuesday.
"Really, everything is on the table," said Chairman Frank Lucas after the committee approved a letter saying it wants to be part of the solution to a U.S. fiscal crisis.

Gold rebounds from 1-month low; equities recover
SINGAPORE, March 16 (Reuters) - Gold regained strength on Wednesday after falling to a 1-month low in the previous session, but declines in ETF holdings to their lowest in 10 months suggested that speculators could still sell bullion to raise liquidity if equities extend losses.
"I think sentiment is a bit mixed now. We don't know yet how the nuclear crisis will affect the world. Everything seems to stop in Japan, so the economy will deteriorate. We don't know   whether if will affect other areas," said Ronald Leung, director of Lee Cheong Gold Dealers in Hong Kong.

Japan stocks surge after rout, relief for Asia
SINGAPORE, March 16 (Reuters) - Asian financial markets rallied on Wednesday, with Tokyo stocks rebounding nearly 4.5 percent after a steep two-day sell-off on Japan's killer earthquake and unfolding nuclear crisis.
"The market doesn't care about any fundamentals today. All eyes are on the nuclear plant and the Nikkei will move according to the news about the plant," said Norihiro Fujito, a senior investment strategist at Mitsubishi UFJ Morgan Stanley Securities. 

Oil : Oil drops 4.5 pct on Japan, Mideast clashes eyed
NEW YORK, March 15 (Reuters) - Brent crude prices tumbled 4.5 percent on Tuesday, the biggest drop in 13 months, as Japan's escalating nuclear crisis sparked risk aversion across markets, outweighing concerns about turmoil in Bahrain and Libya.
"It looks like the Japanese economy may be affected for a longer period than was thought last week," said Gene McGillian, analyst at Tradition Energy in Stamford, Connecticut.

COMMODITIES: Japan fears prompt steepest dive in months
NEW YORK, March 15 (Reuters) - A key commodity index posted its second-biggest fall in two years on Tuesday as the nuclear crisis in Japan sent fear rippling through financial markets, driving investors toward safer assets.
"It's not really fundamental concerns that Japan, one of the largest oil consumers, will be missing over the next few months," Commerzbank analyst Eugen Weinberg said.

GLOBAL MARKETS: Japan stocks surge after two-day rout
SINGAPORE, March 16 (Reuters) - Asian financial markets rallied on Wednesday, led by a nearly 6 percent surge in Japanese stocks, after a horrendous two-day sell-off on last week's killer earthquake and an unfolding nuclear crisis.
Other Asian stock markets also opened higher, but analysts warned that news of another fire at the Fukushima Daiichi nuclear plant in the morning and a quake last night in the Shizuoka area near Tokyo would keep investors on edge.

Renewed inflation seen as a risk for oil sands
EDMONTON, Alberta, March 15 (Reuters) - Hyperinflation remains a risk for Canadian oil sands producers as a return to high oil prices prompts a spate of new projects in the region, the head of Total SA's  Canadian unit said on Tuesday.
Jean-Michel Gires said oil sands producers need to tap new pools of labor or face a possible return to the skyrocketing inflation that plagued the oil sands industry in 2007 and 2008, when the costs of some projects rose by half in a year.

U.S. crude inventories rise less than expected-API
NEW YORK, March 15 (Reuters) - U.S. crude oil inventories rose less than expected last week as stocks at the Cushing storage hub fell, data from the American Petroleum Institute showed on Tuesday.
Crude inventories in the United States rose 91,000 barrels in the week to March 11 from the week before. Analysts polled by Reuters had, on average, expected a 1.8-million-barrel build.

Steady Fed sees firmer economy, watchful on oil
WASHINGTON, March 15 (Reuters) - The Federal Reserve said on Tuesday the U.S. recovery is gaining traction and inflation pressure from soaring energy costs should be short-lived, allowing it to maintain its heavy support for the economy.
The U.S. central bank decided unanimously to forge ahead with its $600 billion bond-buying plan despite a considerably more upbeat assessment of the economy and the job market

Spent reactor fuel opens new risks in Japan crisis
NEW YORK, March 15 (Reuters) - A fire and blast at the building protecting a massive pool holding spent atomic fuel has taken Japan's nuclear crisis to a more critical level.
After days of Tokyo Electric Power Co's (TEPCO)  struggle to regain control of overheating reactors, an explosion blasted holes at the outer building of the No. 4 reactor.

HSBC: Funds shift from Asian stocks to North American equities in 1Q (Malaysia Reserve)
The world's largest fund managers are shifting away from Asian stocks in the first-quarter (1Q)

Euro nations divided over how to boost aid (Malaysia Reserve)
European governments remained divided over how to boost the rescue fund for debt-strapped

US corn futures close limit down at a nearly 10-week low as Japan's nuclear crisis spooks traders into reducing risk. Investors pull cash out of risky assets in favor of more liquid holdings, analysts note. Commodity funds sold an estimated 22,000 contracts, a hefty amount. Corn led the downside in the grain markets as Japan is the world's top corn importer. Traders worry Japan may temporarily reduce its purchases following last week's disaster. CBOT May corn drops 30c limit to $6.36/bushel. (Source: CME)

US wheat futures finish sharply lower as concerns about the global economy spark widespread selling in commodity markets. The markets tumbled as corn and soybean futures dropped by their daily limits. Commodity funds were heavy sellers, unloading an estimated 12,000 wheat contracts at the CBOT. CBOT May wheat closes down 53c at $6.67 3/4 a bushel, while KCBT May wheat drops 48 1/2c to $7.77 and MGE May wheat loses 51 3/4c to $8.07 1/2. (Source: CME)

Canadian Wheat Board Anticipates Port Congestion In Japan (Source: CME)
Canada's western-based wheat farmers are bracing for potential delays in grain shipments reaching their Japanese customers, though none have materialized so far. "We really don't have a good specific sense" of the impact of Japan's tragedy on grain exports from Canada, Maureen Fitzhenry, a spokeswoman for the Canadian Wheat Board, said Monday. Controlled by western Canadian farmers, the Canadian Wheat Board is the largest wheat and barley marketer in the world. One of the biggest issues facing Japan-bound shipments is the accessibility of the country's ports to unload cargo. "There is certainly going to be some significant short-term congestion" as port closures in Japan force ships to wait to offload and take on cargo, particularly because Japan is a major importer of many commodities, Fitzhenry said.
Still, the Canadian Wheat board currently has ships in Vancouver loading for Japanese destinations and "at least one (ship) is on route, " Fitzhenry said. It takes an ocean vessel about two weeks to travel to Japan from Vancouver. The 10-year average for annual exports of wheat to Japan, including durum, by the Canadian Wheat Board is 1.2 million metric tons. Exports in 2009-10 including durum wheat were 1 million tons, plus 212,000 tons of bulk barley.

Japan Nuclear Explosion Unlikely To Taint Food Chain -Experts (Source: CME)
Radioactive material leaked from Japan's nuclear plants is unlikely to enter the food chain and the widespread contamination seen after the Chernobyl explosion is virtually impossible, experts said. Europe's Energy Commissioner Guenther Oettinger dubbed Japan's nuclear disaster an "apocalypse" after a massive earthquake and tsunami Friday triggered radiation leaks in the country's Fukushima Daiichi nuclear plant. Tokyo advised all people between 20 and 30 kilometers of the plant to stay inside and keep windows closed after one of the four reactors showing problems exploded. A 20 kilometer exclusion zone remains in place. The World Health Organization said Tuesday the only produce at risk is that grown in the immediate vicinity of the plants. "Our understanding is that there are no problems at the moment (from what) they've collected from the area, because it's totally inundated," said Maria Neira, the UN health agency's director of public health and environment.
A spokeswoman for the U.K.'s Food Standards Agency said the likelihood that any nuclear material has contaminated crops beyond the high-risk zone or spread overseas is minimal. "Local foods near the nuclear site could have been exposed if the wind was going inland at the time of any release," she said. "The vast majority of Japan's food chain will not be contaminated." High levels of radiation in food can potentially cause various kinds of cancers and abnormalities if they are digested, with children and babies particularly vulnerable to the effects. If radioactive particles get into the food chain by being absorbed into the water table it can cause problems across the entire sector; after the 1986 disaster in Chernobyl, Ukraine, 125,000 square miles were affected and 50,000 dairy cows were still producing contaminated milk four years later. Yet international agencies have been quick to reassure that Japan's crisis is nowhere near as severe as Ukraine's.
"It is wholly wrong to compare the situation to Chernobyl, which emitted a radioactive cloud 30,000 feet into the air for a long period of time," said the U.K.'s Foreign Office. Nuclear expert at Cambridge University Ian Farnan agreed, saying an explosion on that scale is extremely unlikely due to the different design of the Japanese reactors, meaning radiation is unlikely to contaminate food supplies. "There's not going to be an explosion like that even if we go into a situation where there's a meltdown," he said, adding that the type of radiation measured by the Japanese officials is unlikely to affect agriculture. "In terms of the articulate matter, the amounts are going to be very small," he said.

Farmland Fund Expects Prices To Keep Soaring (Source: CME)
Cheap farmland is hard to find. Values in Iowa and other key agricultural states jumped 12% in 2010, the second-biggest increase in the past 30 years, according to the Federal Reserve Bank of Chicago. Nationwide, prices have doubled during the past decade and climbed about 58% when adjusted for inflation, U.S. Department of Agriculture statistics show. Still, Greyson Colvin is hunting for deals as managing partner of two farmland funds for his agriculture-focused investment firm Colvin & Co., which aims to acquire undervalued properties. "The farmland market is certainly tighter than it's been over the last 12 months," Colvin acknowledged. Colvin manages about 1,500 acres of farmland in South Dakota and Wisconsin, worth $7 million, in the Sather Agriculture LP fund, along with about 350 acres held in individual accounts. The fund, which was launched in 2009, had a return of 29.6% in 2010, up from 7.8% in 2009, according to the company, compared with 15.1% and 26.5%, respectively, for the S&P 500.
There are signs investors will continue to reap gains from the sector, Colvin said. He touted farmland as "the one element that you can't replace across the agricultural equation" and said rising global demand for meat will keep pressure on growers to increase production of grain, which is used to feed livestock. The company targets land that produces corn and soybeans, the dominant crops in the fertile Midwest. Colvin and his brother-in-law, an associate in the company, inspect properties personally before making purchases to check their quality. He scoffed at observers who warn soaring land values may form a bubble. Agricultural fundamentals are the best in decades, he argued, saying rising farm income and cash rental rates justify the appreciation in farmland. "We really believe that farmland is actually underpricing commodities at this point in time,"
Colvin said. Indeed, farmers have the potential to cash in big on coming harvests, as corn, soybean and wheat futures recently surged above 2 1/2-year highs on concerns about tight supplies. Domestic corn inventories are expected to plunge to a 15-year low by the end of the crop's marketing year on Aug. 31 due to strong demand and a disappointing harvest last fall. If cash prices for corn, which is trading around $6.20 a bushel, remain above $5 at the end of the year, Colvin said farmland values should be up an additional 10% to 15%. The outlook for corn prices is uncertain because farmers are projected to harvest a record crop this fall to replenish supplies.

NALYSIS-Global growth to take glancing blow from Japan
LONDON, March 14 (Reuters) - The economic damage wrought on Japan by its devastating earthquake and tsunami is likely only to shave a sliver off global growth, but it could mean increased inflationary pressures for a longer period.
As the world's third largest economy, any fall in Japanese GDP will have a knock-on effect globally, just by dint of gearing down one of its largest drivers.

Rebuilding Japan will need metal, but months later
LONDON, March 14 (Reuters) - Rebuilding infrastructure and shoring up defences against natural disasters will boost Japan's demand for industrial metals -- eventually.
But first, stagnant industrial activity and power blackouts that have disrupted industrial production and halted production at copper and aluminium smelters and refineries are likely to erode demand.

ECB aims for gradual rate hikes - Bini Smaghi
FLORENCE, Italy, March 14 (Reuters) - The European Central Bank aims to "re-normalise" interest rates gradually to head off any increase in inflation expectations, ECB board member Lorenzo Bini Smaghi said on Monday.
"The ECB needs to be ready to react immediately to prevent any increase in inflation expectations," Bini Smaghi said at a conference in Florence. "We indicated to markets that they should prepare for a re-normalisation of interest rates."

PRECIOUS-Gold slides as Japan crisis batters commods
LONDON, March 15 (Reuters) - Gold slid by 2 percent to two-week lows on Tuesday, caught in a broad-based sell-off by commodity investors who grew increasingly unnerved by Japan's growing nuclear crisis.
"Gold has gone down less than other commodities, perhaps sometimes it just maybe is the proportional response which is the important thing," said Mitsubishi analyst Matthew Turner.

FOREX-Yen rises as risk appetite hammered by Japan crisis
LONDON, March 15 (Reuters) - The yen rose against higher yielding currencies on Tuesday as investors slashed positions in riskier assets on growing fears of a radiation catastrophe in Japan following last week's devastating earthquake.
"This will probably be a short, sharp correction, assuming things do not take a turn for the worse as regards the nuclear fallout in Japan," said ING currency strategist Chris Turner.

Grains slide after Japan nuclear plant crisis deepens
SINGAPORE, March 15 (Reuters) - Grains futures fell more than 1 percent part of a cross-asset flight from risk on the escalating crisis at a Japanese nuclear power complex following Friday's devastating earthquake and tsunami.  "It's external macro and geo-political factors that are driving grains markets. There has been nothing fundamental in grains that could have driven prices down -- it's just more risk off," said Victor Thianpiriya, agricultural commodity analyst at ANZ in Melbourne.

Britain adds voice to criticism of EU GM crop plans
BRUSSELS, March 14 (Reuters) - Britain became the latest European Union country on Thursday to raise serious doubts over proposals to let EU governments decide individually whether to grow or ban genetically modified (GM) crops.
Several large EU countries including France, Germany and Spain have already criticised draft legislation tabled by the EU executive in July, which would allow governments to restrict or ban GM cultivation in all or part of their territories.

Farmers who can't hedge could fail- Lumix
LONDON, March 15 (Reuters) - Volatile agricultural commodity prices will drive farmers out of business if they don't understand how to use financial markets to hedge risk, the managing partner of fund manager Lumix Capital said.
"Price volatility will drive out a lot of farmers that purely have farming knowledge and not financial knowledge," Switzerland-based Gonzalo Fernandez-Castro said.

Record food prices to spur
SINGAPORE, March 15 (Reuters) - Farmers will sow more acres and pour more funds into agriculture this year to boost yields across the top producer nations as record high food prices jolt markets and send buyers scurrying for supplies.
While crops in top grain exporter the United States will battle for acres in the upcoming spring planting season, the developing world is expected to deploy resources to expand agriculture and improve stagnating productivity.

World faces risk of another food crisis-FAO chief
ABU DHABI, March 14 (Reuters) - Surging global prices of basic foodstuffs is raising the risk of another food crisis like the one that hit developing countries in 2007-2008, the head of the UN's Food and Agriculture Organization said on Monday.
A surge in oil prices and the fast recent drawdown in global stocks of cereals raise the specter of a return to a supply crisis, FAO Director General Jacques Diouf told Reuters in an interview during a visit to the United Arab Emirates.

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