Friday, February 3, 2012

20120203 1819 FCPO EOD Daily Chart Study.

FCPO closed : 3085, changed : +29 points, volume : lower.
Bollinger band reading : pullback correction downside biased.
MACD Histrogram : turned upward, seller lock in profit.
Support : 3070, 3050, 3020, 2970 level.
Resistance : 3100, 3150, 3200, 3250 level.
Comment :
FCPO closed higher with reduced volume transacted. Soy oil price currently trading higher after overnight closed slightly higher while crude oil price also recording gains.
Short position traded decided to lock in partial profit after recent falls and reduce exposure ahead of long holidays than resume trading only on Wednesday.
Chart study adjusted to suggesting a pullback correction downside 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 larger cut loss and profit target.

20120203 1721 FKLI EOD Daily Chart Study.

FKLI closed : 1538, changed : +14.5 points, volume : lower.
Bollinger band reading : little upside biased with possible pullback correction.
MACD Histrogram : recovering, buyer seller battling.
Support : 1530, 1515, 1505, 1500 level.
Resistance : 1540, 1550, 1565, 1570 level.
Comment :
FKLI closed recorded gains with declined volume changed hand doing 1 points discount compare to cash market that closed slightly higher. Overnight U.S. markets closed mixed and today Asia markets traded mixed swing between gain and losses while European markets trading little lower.
Global markets traded mixed on unsettle European debt issue and awaits U.S. employment data.
Technical reading revised to suggesting a little upside biased market development with possible pullback correction.
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.

20120203 1707 Regional Markets EOD Daily Chart Study.

 DJIA chart reading :  pullback correction upside biased.
 Hang Seng chart reading : upside biased.
KLCI chart reading : upside biased with possible pullback correction.

20120203 1608 Global Market & Commodities Related News.

Markets hold ranges before U.S. jobs data
TOKYO, Feb 3 (Reuters) - Asian shares and the euro fell as caution set in ahead of key U.S. jobs data, which will offer more clues over the state of the world's largest economy, while Greek debt restructuring talks dragged on and undermined sentiment.
"It does seem like there is a little bit of positioning ahead of tonight, it will be a big night for U.S. data and it will be a big influence on risk assets, the U.S dollar as well," said Stan Shamu, market strategist IG Markets.    

FOREX-Euro nudges lower after China data; U.S. jobs eyed
TOKYO, Feb 3 (Reuters) - The euro and the Australian dollar were slightly lower in Asia on Friday as a dip in Chinese non-manufacturing data weighed on sentiment ahead of a key jobs report in the United States.
China's non-manufacturing purchasing managers index fell to 52.9 in January from 56 the month before, prompting traders to lighten positions in risk currencies. That sent the euro to an intraday low of $1.3114 , while the Aussie nudged down 0.2 percent to $1.0675 .

U.S. grains sluggish in early trade
SYDNEY, Feb 3 (Reuters) - U.S. grains futures traded flat in Asia following a see-saw session overnight, where wheat retreated on prospects of improved weather in Europe.    The outlook for moderating weather in Europe this month, should provide some relief to the wheat crop after a blast of bitter cold weather this week.

Indonesia crude palm oil sales to Pakistan seen up
JAKARTA, Feb 3 (Reuters) - Indonesia's crude palm oil sales to Pakistan are expected to more than triple this year as a result of a cut in import duties imposed by Islamabad following a trade pact signed on Friday, the Pakistani ambassador said.
The preferential trade agreement (PTA), approved in September but formally signed on Friday, will result in Pakistan lowering its duty by 15 percent on crude palm oil from the world's top producer.

Balmy, snowless winter in Iowa feeding US Midwest crop worries
CHICAGO, Feb 2 (Reuters) - An unusually mild and mostly snowless winter across the upper U.S. Corn Belt - exactly the opposite of last year - is feeding concerns among farmers that soil moisture will fall short of what's needed for corn, wheat, soybeans and other crops this summer.
Experts say soil moisture reserves in some key growing areas of the upper Midwest are the driest they have been in three decades, with normal planting season times just 8 weeks away.

Argentine soy refreshed by ample rains-exchange
BUENOS AIRES, Feb 2 (Reuters) - Rainstorms have moistened drought-parched soy fields in key global food supplier Argentina and the showers are expected to continue over the days ahead, Buenos Aires Grains Exchange said on Thursday.
The South American country supplies nearly half the world's soymeal, used for animal feed, and soyoil, used for cooking and in the booming international biofuels sector. Argentina also supplies about 12 percent of global soybean exports, an important source of protein for an increasingly hungry planet.

Rains return to Brazil's parched southern soy belt
SAO PAULO, Feb 2 (Reuters) - After three months of drought in Brazil's southern soybean producing states, 10 days of widespread rain was expected to fall on the region that produces large amounts of soy, corn, wheat and rice, forecasters Somar said on Thursday.
Chicago soybean futures prices have been trading up since early December on concerns over how drought in Brazil, Argentina and Paraguay will effect production of more than half the world's output of the oilseed.

Russian grain exports seen at 1.4 mln T in Jan
MOSCOW, Feb 2 (Reuters) - Russia's grain exports probably amounted to about 1.4 million tonnes in January, slightly below previous expectations, a top Russian analyst said on Thursday.
"The January figure is likely to be around 1.4 million tonnes versus our expectation of 1.5 to 2 million," Andrei Sizov Sr, president and CEO of SovEcon agricultural analysts, said.

Vietnam's Jan coffee exports fell 39.5 pct y/y-govt
HANOI, Feb 2 (Reuters) - Vietnam exported an estimated 130,000 tonnes, or 2.17 million bags, of coffee in January, a drop of 39.5 percent from the same month last year, the government said on Thursday.
December coffee export volume was revised up to 156,000 tonnes from 150,000 tonnes estimated earlier, the government's General Statistic Office said in its monthly report.

Sugar demand so high Australia's QSL can't keep up
LONDON, Feb 2 (Reuters) - Australia's biggest exporter of raw sugar, Queensland Sugar Ltd (QSL), cannot keep pace with demand and sees potential to expand production, particularly in the north of the country, its acting chief executive officer, Greg Beashel, said.
"There is much more demand from customers for Australian sugar than we can currently supply," Beashel told Reuters in an emailed interview on Thursday.



Euro Coal-Rises with gas, power on cold
LONDON, Feb 2 (Reuters) - Freezing weather across much of Europe pushed up power, gas and coal prices on Wednesday, although no fresh trades were reported.
"It's been one of those days when all the energy markets are rising and coal has to follow," one European trader said.

New pricing may see India cut higher grade coal imports
NEW DELHI Feb 2 (Reuters) - India may need to import less high-quality coal as the government changes pricing to encourage Coal India , the world's biggest coal miner, to produce more of the grades needed to keep powering Asia's third largest economy.
India's state utilities are struggling to keep their turbines running as domestic coal supply has fallen short of targets and poor infrastructure hinders the transport of imported coal.


Brent steady above $112 on Iran tension, US jobs data eyed

SINGAPORE, Feb 3 (Reuters) - Brent crude held above $112 on supply concerns as reports of a growing possibility of Israel attacking Iran heightened already simmering tensions in the region, while caution set in ahead of key U.S. jobs data.
"The oil market is getting driven on a headline by headline basis coming out of the Middle East," Ben Le Brun, market analyst at OptionsXpress said in a report. "Investors are fearing the worst out of the Middle East."

China 2012 crude imports to grow slowest in 6 yrs -report
BEIJING, Feb 3 (Reuters) - China's net crude oil imports are expected to rise 5.9 percent this year, the slowest growth rate since 2006, on slowing consumption, local media quoted a report by top oil firm China National Petroleum Corp (CNPC) as saying on Friday.
Net crude imports in the world's second largest oil consumer are estimated at 266 million tonnes in 2012 versus 251.26 million tonnes last year, Beijing Times said quoting the CNPC report.


Iron Ore-Spot at 2-month high, slow buying activity
SINGAPORE, Feb 3 (Reuters) - Iron ore edged up to more than two-month highs and offer prices remained firm on Friday, reflecting efforts by some Chinese mills to gradually build stockpiles.
Chinese buyers slowly returned to the spot market this week after last week's Lunar New Year holiday, with many waiting for prices to stabilise before booking cargoes.


LME copper steady; heads for first weekly loss in four
SINGAPORE, Feb 3 (Reuters) - London copper futures steadied in a slow Asian session as investors exercised caution ahead of key U.S. employment data.
"I don't see any upside potential for prices in the short term. The Chinese are still not happy to buy copper with prices at current levels," said Bonnie Liu, analyst at Macquarie in Shanghai.

Peru copper, gold output down slightly in 2011
LIMA, Feb 2 (Reuters) - Production of all main metals fell in Peru in 2011 from the previous year, the mining ministry said on Thursday, as depleted reserves and lower ore grades hit the major global producer.
Peru, the world's No. 2 copper producer, yielded 1.2 million tonnes of the red metal in 2011, 0.96 percent less than in 2010. Output rose 6.49 percent in December, however.

Goldman metals traders to join Mercuria-sources
LONDON, Feb 2 (Reuters) - Two base metals traders who quit U.S. investment bank Goldman Sachs  will join Mercuria, one of the world's top five energy traders, two industry sources said on Thursday.
Sources told Reuters on Tuesday that Ben Green and Liam Brown had left Goldman, but gave no reasons.

Gold headed for 5th winning week; US data eyed
SINGAPORE, Feb 3 (Reuters) - Gold prices held steady , on course for a fifth straight week of gains, as investors awaited a key U.S. labour market report after upbeat jobless claims data in the previous session helped send spot gold to a two-month high.
"The Fed's promise to keep low rates and expectations on the third round of quantitative easing have raised hopes on increasing liquidity, which will continue to push gold higher," said Hou Xinqiang, an analyst at Jinrui Futures in the southern Chinese city of Shenzhen.

METALS-LME copper steady; heads for first weekly loss in four
SINGAPORE, Feb 3 (Reuters) - London copper futures steadied in a slow Asian session on Friday as investors exercised caution ahead of key U.S. employment data.
The metal is heading for its first weekly loss after three straight weeks of gains as sluggish demand from top copper consumer China and worries about Greece's drawn-out debt deal took the steam out of last week's rally to a four-month high.  

PRECIOUS-Gold headed for 5th winning week; US data eyed
SINGAPORE, Feb 3 (Reuters) - Gold prices held steady on Friday, on course for a fifth straight week of gains, as investors awaited a key U.S. labour market report after upbeat jobless claims data in the previous session helped send spot gold to a two-month high.
Prices of bullion are up more than 12 percent so far this year, and the climb gathered pace last week after the U.S. Federal Reserve said it was likely to keep interest rates at ultra-low levels at least through 2014, putting pressure on the dollar.

China limits ship ban to Vale's mega vessels
HONG KONG/SINGAPORE, Feb 2 (Reuters) - China's ban on large ships is limited to Vale's  giant iron ore vessels, shipping sources said on Thursday, clearing up confusion in the maritime community as to whether new government regulations could cover other smaller ships. The China Shipowners Association provided more details on  the rules announced this week to bar dry bulk vessels and oil tankers that exceeded approved port capacities, a move by Beijing to protect the domestic shipping industry.


Asia Dry Bulk-Rates to hover near multi-yr lows on supply
SINGAPORE, Feb 2 (Reuters) - Rates for dry bulk carriers on key Asian freight routes are expected to hover near multi-year lows over the next week as an increase in trading activity fails to offset pressure from an ever expanding fleet, ship brokers said on Thursday.  The rate for panamax vessels travelling via the transpacific route tumbled to a three-year low of $4,974 on Wednesday from $5,915 last week as a supply glut continued to weigh on the market.

Baltic sea index slumps to 25-year low
LONDON, Feb 1 (Reuters) - The Baltic Exchange's main sea freight index, which tracks rates to ship dry commodities, fell to a more than 25-year low on Wednesday as a slump in cargo business and a mounting glut of vessels battered sentiment.  
The overall index fell 18 points or 2.65 percent to 662 points, falling below the 663 point low hit on Dec. 5, 2008 during the financial crisis and its lowest since 1986.

20120203 1205 Global Market & Commodities Related News.

GLOBAL MARKETS-Markets hold ranges before U.S. jobs data
TOKYO, Feb 3 (Reuters) - Asian shares and major currencies were stuck in ranges on Friday ahead of key U.S. jobs data, which will offer more clues over the state of the world's largest economy, while Greek debt restructuring talks dragged on.
"Basically market players will likely take a wait-and-see stance ahead of U.S. payroll data and as Greece has not reached a debt swap deal yet," said Masayuki Doshida, senior market analyst at Rakuten Securities, adding that HSBC's China services PMI data could offer some trading incentives.

COMMODITIES-Mostly down, awaiting US jobs report; gold up
NEW YORK, Feb 2 (Reuters) - Commodities dipped again  on Thursday, with crude oil closing lower for a fifth day and copper and some crops down also, as investors remained cautious ahead of a U.S. jobs report for January.
"We're marking time a little bit (waiting for) the unemployment number," said Sterling Smith, a senior commodity futures analyst at Country Hedging Inc in St. Paul, Minnesota.

Chevron Brazil output drops after ANP shut well
SAO PAULO, Feb 2 (Reuters) - Chevron's ranking among Brazil's top oil producers dropped in December from third to fourth, following Petrobras, Shell and Stateoil, after the National Petroleum Agency (ANP) ordered the U.S. oil major to shut a well.  
Despite the record oil output from Brazil last year and in December outlined in an ANP report released on Thursday, production from Chevron fell 14 percent to 34,797 barrels of oil equivalent per day in December from November.

Canada plan to sell oil to China faces big hurdles
OTTAWA, Feb 2 (Reuters) - Prime Minister Stephen Harper may still be smarting from Canada's failed bid to ramp up oil exports to the United States, but his plan B could prove to be even tougher.  
Harper heads across the Pacific next week in a bid to convince China to satisfy its growing energy appetite with Canada's vast oil reserves.

India team to seek boost in Iran imports for oil
NEW DELHI, Feb 2 (Reuters) - India will send a delegation to Iran this month to explore boosting exports to smooth use of the restricted rupee currency, which the two sides have agreed to use for 45 percent of New Delhi's $11 billion a year oil bill, sources told Reuters.
India is currently paying Iran for the oil through Turkey's Halkbank  after a previous mechanism was closed 13 months ago, but fears that route may also succumb to international pressure.

Brent up, US crude down, premium near 3-month high
NEWS YORK, Feb 2 (Reuters) - Brent prices rose for a third straight day on Thursday and U.S. crude dropped more than 1 percent in heavy trading that saw the price differential between the two contracts widen close to three-month highs.
"Demand in Asia is very strong right now -- refiners there can get more bang for their buck in buying Brent," said Phil Flynn, analyst at PFGBest Research in Chicago.

US natgas ends up 7 pct, shorts cover on stock draw
NEW YORK, Feb 2 (Reuters) - Front-month U.S. natural gas futures ended higher on Thursday after three straight losing sessions, backed by short covering after a government report showed a weekly inventory draw slightly above market expectations.
"The combination of a withdrawal from inventory coming in a tad better than the expectations and the fact that the market remains in an oversold state was enough to result in a modest short covering rally today," Energy Management Institute's Dominick Chirichella said in a report.

Euro Coal-Rises with gas, power on cold
LONDON, Feb 2 (Reuters) - Freezing weather across much of Europe pushed up power, gas and coal prices on Wednesday, although no fresh trades were reported.
"It's been one of those days when all the energy markets are rising and coal has to follow," one European trader said.

20120203 1035 Global Economic Related News.

Economy: Malaysia records RM120bn investments between Jan-Nov 2011
Malaysia attracted RM120bn in investments between Jan  and Nov last year.  International  Trade and Industry Deputy Minister Datuk Mukhriz Tun Mahathir said total investments  surpassed the RM115bn target set by the government for last year. (Bernama)

Overseas investors bought Malaysian stocks for a fourth straight month in Jan, according to data on the Kuala Lumpur stock exchange‟s website. Foreign funds purchased a net RM200m (US$66m) of Malaysian shares in Jan 2012 (RM800m in Dec 2011, RM700m in Nov 2011 and RM1.5bn in Oct 2011). (BT)

Bank Negara Malaysia (BNM) and the  Bank of Thailand signed a memorandum of understanding (MOU) yesterday to enter into a cross-border collateral arrangement. The agreement is mainly to facilitate a reciprocal operational arrangement aimed at enhancing liquidity facilities to financial institutions in both countries. Under this arrangement, eligible financial institutions operating in Malaysia may obtain Malaysian Ringgit liquidity from Bank Negara by pledging Thai Baht or Thai government and central bank debt securities with it and vice versa. (BNM)

The Malaysia-Australia Free Trade Agreement (MAFTA), expected to be inked in three months, will smoothen and increase the movement of goods and services between both countries, said the  CEO of the Malaysia External Trade Development Corporation (Matrade) Dr Wong Lai Sum. She said Malaysia, which currently does not have a direct agreement with Australia, except through the ASEAN-ANZ (Australia and New Zealand) FTA, has so far benefited tremendously from the regional agreement. Total trade with Australia increased by 6.1% to reach RM34bn last year compared with the RM32bn in 2010. (Bernama)

The Chinese government is  considering funding options for the temporary European Financial Stability Facility  and its permanent successor, the  European Stability Mechanism, through the International Monetary Fund to help stabilise the monetary union, Premier Wen Jiabao said in affirmation of China‟s preparedness to assist in resolving the eurozone‟s debt crisis. (Bloomberg)


Japanese finance minister Jun Azumi stepped up his warnings over the yen's renewed strength, saying he "can't overlook" speculative moves in the market to push the currency higher—a trend that threatens to exacerbate the nation's trade shortfalls and economic slowdown. "I am calmly watching the market now, but I can't overlook any acceleration in moves by short-term speculators" in the currency market, he said. "As I have been saying, I will take decisive steps if deemed necessary." (WSJ)

South Korea’s foreign reserves rose to US$311.34bn in Jan (US$306.4bn in Dec). (Bloomberg)

Vietnam’s exports fell 11.1% yoy YTD in Jan (+33.3% in Dec), while imports declined 18.7%  yoy YTD (+24.7% in Dec). (Bloomberg)

Australia: Record 2011 trade surplus bolsters currency
Australia’s trade surplus soared to a record in 2011 on coal and iron ore shipments, sending the local currency to a five-month high. Exports outpaced imports by AUD19.3bn (USD20.7bn) in the 12 months through 31 Dec, a Bureau of Statistics report showed. The December surplus unexpectedly widened to AUD1.71bn from a revised AUD1.34bn in November. The data underscore the Reserve Bank of Australia’s expectation that Chinese demand for the nation’s commodities will help propel the domestic economy even as a global expansion slows. Growth in Australia, which has avoided a recession for two decades, is driven by iron ore and coal shipments to Asia as the developing economies of China and India boost construction and power generation. (Bloomberg)

Spain: Jobless sign on at fastest pace in three years
Spanish unemployment registrations jumped by the most in three years in January as the economy edged into its second recession since the end of 2009. The number of people signing on for jobless benefits increased by 177,470 to 4.6m, the Labor Ministry in Madrid said in a statement yesterday. That was the biggest increase since January 2009 and the total is the most since records began 16 years ago. Data last week showed overall unemployment in the fourth quarter reached a 15-year high. Spanish Prime Minister Mariano Rajoy is battling to trim the budget deficit while nurturing growth and creating jobs in an economy home to a third of the euro region’s unemployed and where almost half of young people are out of work. (Bloomberg)

US: Bernanke says he won’t trade inflation goal for more job growth
Federal Reserve Chairman Ben S. Bernanke said the central bank will seek to keep prices rising at a 2% rate and rejected suggestions that it would sacrifice its inflation goal to boost employment. “Over a period of time we want to move inflation always back toward 2%,” Bernanke said yesterday in response to a question from Republican Representative Paul Ryan of Wisconsin, chairman of the House Budget Committee. “We’re always trying to bring inflation back to the target.” Bernanke defended the central bank’s newly established inflation goal after Ryan suggested it might be willing to tolerate higher inflation to fulfill the second part of its mandate from Congress, which is to seek maximum employment. (Bloomberg)

US: Jobless claims fall, productivity gains cool
Claims for US jobless benefits fell last week and productivity cooled in the fourth quarter, signaling hiring may accelerate as companies reach the limits of how much efficiency they can wring from existing workforces. Applications for unemployment insurance payments dropped by 12,000 to 367,000 in the week ended 28 Jan, according to Labor Department figures issued yesterday. Worker output per hour increased at a 0.7% annual rate from October through December, down from a 1.9% gain in the prior three months, another report showed. After focusing on cutting costs during the recession, American businesses are taking on more staff as they gain confidence the recovery will be sustained. (Bloomberg)

US: Consumer comfort index rises as view of economy improves
Consumer confidence in the US climbed for a second week as Americans became less pessimistic about the prospects for the world’s largest economy. The Bloomberg Consumer Comfort Index rose to minus 44.8 in the period to 29 Jan from minus 46.4 the previous week. A measure of Americans’ view of the state of economy climbed to the highest since June. Gains in employment and post-holiday clearance sales at retailers also helped create a better buying climate for consumers, the report showed. At the same time, increasing gasoline costs threaten to hinder progress in household spending, which accounts for about 70% of the economy. (Bloomberg)

US employers said they planned to cut 53,486 positions in Jan, compared with 41,785 job cuts announced in Dec, representing a 39% yoy increase from Jan 2011‟s 38,519 cuts, the lowest first-month cuts on record, according to global outplacement firm Challenger, Gray & Christmas. This jump was led by retailers and financial firms which were cutting 12,426 and 7,611 jobs, respectively. (CNBC)

20120203 1035 Malaysia Corporate Related News.

Muhibbah to get Johor oil hub contract plus an equity stake
Muhibbah Engineering is set to become the lead contractor and shareholder in the Asian Petroleum Hub oil terminal in Johor that is being revived by a consortium led by creditor CIMB. Muhibbah was appointed contractor for the terminal and piling works for the proposed storage and bunkering facility promoted by cash strapped Asia Petroleum Hub SB (APHSB). A source said the project is about 65% completed. Muhibbah, which was awarded an RM820m contract by APHSB, has undertaken some RM600m worth of works. APHSB’s stake in the project is set to be diluted to a minority stake while CIMB would continue to provide the necessary funding for its completion. (Malaysian Reserve)

Singapore firm buys into IHT
Singapore-based Symphony International could end up with a minority stake in Khazanah’s Integrated Healthcare Holdings (IHH) when the latter goes for listing. Symphony would invest USD50m to buy a non-controlling stake in Integrated Healthcare Hastaneler Turkey SB (IHT) and has the option to convert its investment in IHT into a minority stake in IHH. Symphony previously sold its Parkway shares to Khazanah as part of Khazanah’s USD3.5bn takeover offer to privatize Parkway in 3Q10. (StarBiz)

OM Sarawak to invite bidders for RM1.5bn smelter works
OM Materials (Sarawak) SB (OM Sarawak) will invite bidders in the next two to three months for various packages in the construction of its RM1.5bn manganese and ferrosilicon alloy smelter in Samalaju Industrial Park, Bintulu. The civil works packages would be open to Malaysian contractors. The company aims to complete the project’s tender exercise by June. The smelting plant will require 24 sets of submerged fully and semi-enclosed ferro alloy furnaces and one set of ferro alloy refining furnace. Field work is expected to start in July. The plant will take 30 months to complete. (StarBiz)

Tengku Mahaleel to make shock return to Proton
Tengku Tan Sri Mahaleel Tengku Ariff is poised to make a shock return to Proton Holdings. The former Proton CEO will lead the national carmaker probably as chairman of the company in the coming months, replacing Datuk Seri Mohd Nadzmi Mohd Salleh, sources said. “More or less, it’s almost a done deal,” said a source close to DRB-HICOM, the new controlling owner of Proton under a RM1.29bn deal to buy Khazanah’s entire 42.7% stake announced last month. Tengku Mahaleel left Proton in September 2005 under controversial circumstances. (BT)

Cypark obtains approval for sanitary landfill project
Cypark has received approval in principle for the proposed development of a new sanitary landfill in Negri Sembilan. The government approval allows Cypark to implement the project on a build, operate and transfer (BOT) method via a public private partnership for a concession period of 25 years. The project will treat and dispose of municipal solid waste (MSW) and is expected to commence this year and be completed over two years. The estimated flow of MSW into the project is above 1,000 tonnes per day. (Financial Daily)

MBSB 2011 net profit surges on strong retail loan growth
Malaysia Building Society Bhd's (MBSB) net profit more than doubled last year on the back of strong loan growth in the retail segment. The non-bank lender, which is controlled by the Employees Provident Fund (EPF), reported a net profit of RM325.4 million compared with RM146 million in the previous year. Revenue grew by 64.8 per cent to RM1.26 billion. "Our group's improved performance is the result of the company's persistent efforts to grow its retail business in the face of stiff market competition," its chief executive officer Datuk Ahmad Zaini Othman said in a press statement. (Source: The Star)

KPRJ not selling out
Kumpulan Prasarana Rakyat Johor Sdn Bhd (KPRJ) is not selling out and will be an indirect shareholder of Tebrau Teguh following the former's disposal of a 33.15% stake to  Iskandar Waterfront Holdings Sdn Bhd (IWH) for 76 sen per share. On Tuesday, Tebrau Teguh announced that its major shareholder KPRJ was selling a 33.15% stake in the former to IWH. The offer is for 222 million ordinary shares of 50 sen each in Tebrau Teguh, which works out to a price tag of RM168.72mil. “KPRJ is not selling out of Tebrau Teguh as the former also owns shares in IWH. “The pie would be bigger now as more valuable assets would be in IWH following the takeover,” sources said. (Source: The Star)

20120203 1024 Global Market Related News.

Most Asia Stocks Drop as Greece Struggles on Debt Deal, Japan Profits Fall (Source: Bloomberg)
Most Asian stocks fell, retreating from a three-month high, as Greece and its creditors struggled to reach an agreement on a debt swap and companies from Mazda Corp. to Nippon Sheet (5202) Glass Co. forecast losses. Nippon Sheet, a Japanese glassmaker, slumped 11 percent in Tokyo after forecasting a 2 billion yen ($26 million) loss for the year ending March 31 on slumping demand in Europe, its biggest market. Mazda Motor Corp., the most unprofitable company among Japan’s carmakers, slipped 1.5 percent after it forecast its biggest annual loss in 11 years. Hynix Semiconductor Inc., the world’s second-largest maker of computer-memory chips, dropped 2.4 percent after posting wider-than-expected losses.
“There’s still a lot of headwinds out there in terms of global growth, particularly in Europe,” said Belinda Allen, a senior investment analyst at Colonial First State Global Asset Management in Sydney, which oversees about $145 billion. “The biggest headwind is the implementation risk surrounding the fiscal compact in Europe and negotiations on a Greek debt deal.”

Japan’s Topix Index Swings Between Gains, Losses Ahead of U.S. Jobs Report (Source: Bloomberg)
Japan’s Topix Index (TPX) swung between gains and losses as investors waited on monthly U.S. employment data to gauge the strength of the recovery in the world’s largest economy. Mazda Motor Corp. (7261), which relies on the U.S. for about 20 percent of its sales, lost 2.4 percent after the carmaker said its losses would widen. Trading house Mitsui & Co. added 1.2 percent after profit jumped. Canon Inc. (7751), the world’s biggest camera maker, gained 2.7 percent after announcing a share buyback. Nippon Sheet Glass Co. tumbled 11 percent after saying it would post a loss on slumping demand in Europe. “Investors are unlikely to buy or sell today ahead of the U.S. job report,” said Juichi Wako, a senior strategist at Tokyo-based Nomura Holdings Inc. “Market expectations for the employment report are high.”

Most U.S. Stocks Advance as Investors Await Tomorrow’s Employment Report (Source: Bloomberg)
Most U.S. stocks advanced, sending the Standard & Poor’s 500 Index higher for a second straight day, as investors awaited tomorrow’s employment report to gauge the strength of the recovery in the world’s largest economy. Gap Inc. (GPS), the largest U.S. specialty apparel chain, surged 11 percent after forecasting earnings that beat analysts’ estimates. MasterCard Inc. (MA), the world’s second-biggest payments network, jumped 6.7 percent as profit climbed 24 percent. Citigroup Inc. (C) and Bank of America Corp. (BAC) added at least 1.2 percent. Internet and social media companies rose after Facebook Inc. filed to raise $5 billion in an initial public offering. Zynga Inc. and Groupon Inc. (GRPN) rallied more than 7.3 percent. About three stocks gained for every two that declined on U.S. exchanges as of 4 p.m. New York time. The S&P 500 advanced 0.1 percent to 1,325.54 today. The Dow Jones Industrial Average dropped 11.05 points, or 0.1 percent, to 12,705.41.

European Stocks Rise as U.S. Jobless Claims Fall; Xstrata Rallies on Talks (Source: Bloomberg)
European (SXXP) stocks climbed for a third day as a report showed that U.S. jobless claims dropped more than economists had estimated and Glencore International Plc held talks to buy Xstrata Plc (XTA), boosting mining companies. Xstrata jumped 9.9 percent after confirming that Glencore made an approach about an offer for the coal, copper and nickel miner. Unilever dropped 4.4 percent as the world’s second- largest consumer-goods maker posted revenue growth that missed analysts’ estimates. AstraZeneca Plc (AZN) sank 3.4 percent after saying 2012 will be challenging for the industry. The Stoxx Europe 600 Index rose 0.2 percent to 260.11 at the close for the gauge’s highest level since Aug. 1. The benchmark measure swung between gains and losses at least 20 times earlier today.

Jobless Claims in U.S. Fell Last Week (Source: Bloomberg)
Claims for U.S. jobless benefits fell last week and productivity cooled in the fourth quarter, signaling hiring may accelerate as companies reach the limits of how much efficiency they can wring from existing workforces. Applications (INJCJC) for unemployment insurance payments dropped by 12,000 to 367,000 in the week ended Jan. 28, according to Labor Department figures issued today in Washington. Worker output per hour increased at a 0.7 percent annual rate from October through December, down from a 1.9 percent gain in the prior three months, another report showed. After focusing on cutting costs during the recession, American businesses are taking on more staff as they gain confidence the recovery will be sustained. In prepared remarks to Congress today, Federal Reserve Chairman Ben S. Bernanke today highlighted improvements in the job market and production, while cautioning the outlook remains “uncertain.”

Productivity in U.S. Increased at a Slower Annual Pace in Fourth Quarter (Source: Bloomberg)
The productivity of U.S. workers rose in the fourth quarter at a slower pace than in the prior three months, showing companies are reaching the limits of how much efficiency they can squeeze from existing workforces. The measure of worker output per hour increased at a 0.7 percent annual rate following a 1.9 percent gain in the prior three months, figures from the Labor Department showed today in Washington. Expenses per employee climbed at a 1.2 percent rate after dropping 2.1 percent in the third quarter. Businesses in the U.S. that are growing more confident about the economy may be hiring more workers after the recession and its aftermath led them to search for ways to lift efficiency without creating new jobs. Payrolls grew by 145,000 in January, a Labor Department report is forecast to show tomorrow.

Bernanke Won’t Trade Inflation Goal for Jobs (Source: Bloomberg)
Federal Reserve Chairman Ben S. Bernanke said the central bank will seek to keep prices rising at a 2 percent rate and rejected suggestions that it would sacrifice its inflation goal to boost employment. “Over a period of time we want to move inflation always back toward 2 percent,” Bernanke said today in Washington in response to a question from Republican Representative Paul Ryan of Wisconsin, chairman of the House Budget Committee. “We’re always trying to bring inflation back to the target.” Bernanke defended the central bank’s newly established inflation goal after Ryan suggested it might be willing to tolerate higher inflation to fulfill the second part of its mandate from Congress, which is to seek maximum employment.

Consumer Confidence in U.S. Increases for a Second Week in Bloomberg Index (Source: Bloomberg)
Consumer confidence in the U.S. climbed for a second week as Americans became less pessimistic about the prospects for the world’s largest economy. The Bloomberg Consumer Comfort Index (COMFCOMF) rose to minus 44.8 in the period to Jan. 29 from minus 46.4 the previous week. A measure of Americans’ view of the state of economy climbed to the highest since June. Gains in employment and post-holiday clearance sales at retailers also helped create a better buying climate for consumers, the report showed. At the same time, increasing gasoline costs threaten to hinder progress in household spending, which accounts for about 70 percent of the economy.

Fed’s Evans Seeks Clearer Interest-Rate Pledge or ‘Ambitious’ Asset Buys (Source: Bloomberg)
Federal Reserve Bank of Chicago President Charles Evans said the central bank needs a clear low- rate commitment or a third round of purchases of Treasuries and mortgage bonds to further stimulate a still struggling economy. People outside the Fed have “mentioned that maybe you needed to do well over a trillion dollars in asset purchases in order to begin to move things,” the regional chief told reporters today during a meeting at the bank. “I don’t have a particular number in mind, but it would be more ambitious than most numbers being bandied about.” Evans reiterated his view that the central bank should keep the benchmark U.S. interest rate near zero until unemployment falls below 7 percent or medium-term inflation rises above 3 percent, and underscored his position as the Fed’s most vocal proponent for easing. Chairman Ben S. Bernanke said last week the Fed was considering easing policy further to sustain the recovery after the Fed extended its pledge to keep borrowing costs low until at least late 2014.

Treasuries Head for Second-Straight Weekly Gain as Fed Pledge Drives Yield (Source: Bloomberg)
Treasuries headed for a second weekly gain as the Federal Reserve’s pledge to keep interest rates low fueled demand for debt even as economists said a report today will show employers added jobs in January. U.S. government securities have returned 0.3 percent this year, on top of a 9.8 percent rally in 2011, according to Bank of America Merrill Lynch indexes. Improvement in the economy has yet to increase inflation expectations. The difference between yields on 10-year notes and Treasury Inflation Protected Securities, a gauge of trader expectations for consumer prices over the life of the debt, was 2.15 percentage points, in line with the 10-year average. “The rally in Treasuries can keep going for the coming months,” said Hiromasa Nakamura, a senior investor at Mizuho Asset Management Co. in Tokyo, which oversees the equivalent of $43.2 billion and is a unit of Japan’s second-largest publicly traded bank by assets. “Inflation will be kept at bay for several years.”

China Economy Heading for ‘Hard Landing’ as Exports Falter, Shilling Says (Source: Bloomberg)
China’s economy is headed for a “hard landing” this year as weaker demand overseas chokes off exports, said Gary Shilling, who correctly forecast the U.S. recession that began in December 2007. A Chinese government report yesterday showed that export orders fell last month even as manufacturing expanded. The Shanghai Composite Index (SHCOMP) dropped 1.1 percent yesterday as stronger manufacturing boosted concern that the world’s second- largest economy will decelerate further as the government refrains from loosening monetary policy to tame inflation and curb property prices. “They slammed on the brakes,” Shilling, president of A. Gary Shilling & Co., a Springfield, New Jersey-based consultancy firm, said at the Bloomberg Link China Conference in New York yesterday. “Transition is not easy because they are geared up to exports.”

China’s Wen Raises Euro Funding Prospect (Source: Bloomberg)
Chinese Premier Wen Jiabao raised the prospect of contributing to the euro-area’s bailout programs, telling Chancellor Angela Merkel that China may be prepared to assist in resolving its debt crisis. The Chinese government is considering funding options for the temporary European Financial Stability Facility and its permanent successor, the European Stability Mechanism, through the International Monetary Fund to help stabilize the monetary union, Wen said yesterday after meeting Merkel in Beijing. China has previously said that it needs more detail on any plan to contribute funds to the euro area. China is “investigating and evaluating ways, through the IMF, to be more deeply involved using the ESM and EFSF channels in solving the European debt issue,” Wen said at a briefing alongside Merkel, who arrived in China early yesterday on her fifth visit to the world’s most populous country as chancellor.

Korean Won Set for Fourth Weekly Gain on Inflows Into Stocks; Bonds Rise (Source: Bloomberg)
South Korea’s won headed for a fourth weekly gain as signs the global economy is recovering spurred inflows into the nation’s stocks. The Kospi (KOSPI) Index of shares rose 0.5 percent this week as overseas investors bought $1.3 billion more shares than they sold through yesterday, exchange data show. A U.S. report today may show employers boosted payrolls in January by 140,000 workers and the jobless rate held at an almost three-year low of 8.5 percent, according to median estimates in a Bloomberg survey. Bonds advanced before the central bank meets to review borrowing costs next week. “The won is under consistent appreciation pressure with global economy data improving a lot and foreign investors boosting Korean stock purchases,” said Hwang Sun Min, a Seoul- based currency trader at Kookmin Bank. “Investors may refrain from betting on a weaker dollar today as they stay cautious ahead of the U.S. payrolls figure.”

Indonesia Economy Growth Probably Exceeded 6% (Source: Bloomberg)
Indonesia’s growth probably exceeded 6 percent for a fifth quarter as domestic demand helped Southeast Asia’s largest economy withstand the European debt turmoil that has hurt exports across Asia. Gross domestic product increased 6.45 percent in the fourth quarter from a year earlier, compared with a 6.5 percent pace in the previous three months, according to the median of 17 estimates in a Bloomberg News survey ahead of a government report due Feb. 6. Bank Indonesia will keep its benchmark rate at a record-low 6 percent, according to 11 of 15 estimates before a Feb. 9 decision.
Indonesia is outperforming its neighbors including Thailand and the Philippines (PHGDPYOY), as two rate cuts in the last quarter aided President Susilo Bambang Yudhoyono’s efforts to increase gross domestic product by an average 6.6 percent a year. The country regained investment-grade rating from Moody’s Investors Service and Fitch Ratings for the first time since the Asian financial crisis in recent weeks, boosting investment prospects as it plans transport and utility projects.

Europe’s Leaders Shouldn’t Sacrifice Union to Save Euro: View (Source: Bloomberg)
The euro-area crisis is forcing many of the European Union’s long-running political disputes to the surface at the same time. As they wrestle to save the currency, Europe’s leaders -- above all Britain’s David Cameron, France’s Nicolas Sarkozy and Germany’s Angela Merkel -- need to make sure they don’t dismantle the union in the process. Political tensions peaked in December, as Europe’s leaders were rushing to put together a fiscal compact that would convince markets that euro-area countries can get their sovereign debts under control. Cameron tried to leverage the need for a treaty to protect the U.K.’s lucrative financial sector from new EU regulations, in particular a transactions tax that is being proposed by France. When he failed, he vetoed the treaty, forcing the others to work outside the EU.
As after any domestic fight, it’s taking awhile for EU leaders to figure out whether their marriage of 27 can be the same again. In one positive sign, despite political opposition within his party, Cameron agreed this week to make an important concession: The U.K. won’t stand in the way of letting other EU members use the union’s buildings and bureaucracy to carry out their new, non-EU, fiscal compact.

Spanish Unemployment Grows Most in Three Years as Recession Looms: Economy (Source: Bloomberg)
Spanish unemployment registrations jumped by the most in three years in January as the economy edged into its second recession since the end of 2009. The number of people signing on for jobless benefits increased by 177,470 to 4.6 million, the Labor Ministry in Madrid said in an e-mailed statement today. That was the biggest increase since January 2009 and the total is the most since records began 16 years ago. Data last week showed overall unemployment in the fourth quarter reached a 15-year high. Spanish Prime Minister Mariano Rajoy is battling to trim the budget deficit while nurturing growth and creating jobs in an economy home to a third of the euro region’s unemployed and where almost half of young people are out of work. Today’s data underscores the divergence of Europe’s economy as indebted countries struggle with the threat of persisting recessions while Germany enjoys unemployment at a two-decade low.

Greece Aiming to Close Swap in Second Bailout Faces Fight to Stay in Euro (Source: Bloomberg)
Greece’s fight to win its second international bailout may only open a new chapter in its struggle to remain in the euro area.  The rescue plan, which European officials and Greek creditors say may be wrapped up in coming days, includes a loss of more than 70 percent for bondholders in a voluntary exchange and loans likely to exceed the 130 billion euros ($171 billion) now on the table. That won’t stanch the bleeding, say economists including Holger Schmieding of Berenberg Bank in London. Greece will be saddled with too much debt, too little growth and too large a budget hole to do without even more money that euro nations led by Germany are increasingly reluctant to offer, they say.

Egypt Leaves Benchmark Rate Unchanged at 9.25% After Requesting IMF Loan (Source: Bloomberg)
Egypt’s central bank left its key interest rate unchanged after the government requested a $3.2 billion loan from the International Monetary Fund and parliamentary elections eased concerns over political stability. The Monetary Policy Committee left the overnight deposit rate at 9.25 percent and the overnight lending rate at 10.25 percent, the central bank said today on its website. Three of five economists surveyed by Bloomberg anticipated the move, while two forecast an increase. “Interbank rates and government borrowing costs continue to rise, but the decline in the currency looks gradual and measured, and pressures may ease somewhat following the completion of the elections and in the event that external financing starts to materialize,” Liz Martins, Dubai-based senior economist at HSBC Middle East, said in response to e- mailed questions before the announcement.

Australia’s Service Industry Grew Last Month, Snapping Three-Month Decline (Source: Bloomberg)
Australia’s services industry expanded in January, snapping three straight months of declines, as back-to-back interest-rate reductions boosted businesses including accommodation, cafes, finance and recreation. The performance of services index advanced 2.9 points to 51.9 in January, the highest reading since August, Commonwealth Bank of Australia and the Australian Industry Group said in Sydney today. Fifty is the dividing line between expansion and contraction. Reserve Bank of Australia Governor Glenn Stevens lowered the overnight cash rate target to 4.25 percent from 4.5 percent on Dec. 6, citing turbulence in financial markets and an increased chance of a “further material slowing in global growth” as Europe’s sovereign debt crisis intensified. The local dollar touched a five-month high yesterday after government data showed a record trade surplus last year.

20120203 1023 Soy Oil & Palm Oil Related News.

Plantation: Assistance for downstream players affected by  Indonesia export palm oil duty
Sources said Malaysia is drawing up an action plan, which will likely include reforms in its  crude palm oil (CPO) export duty policy and a new fund estimated at over RM1bn, to assist  local downstream players badly affected by Indonesia's palm oil export duty structure. While  the local CPO export duty has remained unchanged at 23% since the 1970s, Indonesia's CPO  refined products export duties have been drastically slashed by more than half since October  last year, and currently range from  3% to 20%. Under the new duty structure, Indonesian  palm oil refiners are expected to reap 5% to 8% higher profit margins compared with the  traditional operating profit margins among Malaysian at 3% to 6%. The Government is in the  final stage of putting together appropriate measures for a rescue plan to help the RM6bn  local palm oil downstream industry. (Starbiz)

Indonesia plans US$5.6bil company to compete with Sime Darby, Wilmar
Indonesia's government plans to create one of the world's largest palm oil and rubber firms in March by combining state planters with total assets of US$5.6bil, a government minister told Reuters. A planned listing of the firm will tap investor interest in a country with a recently acquired “investment grade” rating and create a rival to top regional planters such as Malaysia's  Sime Darby and Singapore's Wilmar. The government will consolidate the assets of 15 state firms, whose revenues last year stood at around 40 trillion rupiah (US$4.45bil), under parent company PT Perkebunan Nusantara III. (Source: The Star)


Soybeans (Source: CME)
US soybean futures ended modestly higher, trading in tandem with movement in the US dollar. Prices traded in both negative and positive territory, with USD fluctuations in focus as uncertainty about South American output offset fundamental pressure from sluggish export demand, analysts say. Without a fundamental event to direct prices, traders eyed outside markets, playing more of a waiting game in the absence of directives to break futures out of their recent trading range, analysts add. CBOT March soybeans ended up 1 3/4c to $12.17/bushel.

Soybean Meal/Oil (Source: CME)
Soy product futures edge higher, mimicking the up and down price movements of soybeans. The markets lacked fresh fundamental directives to push prices, leaving traders focused on outside markets for guidance, analysts say. Two-sided price action in the US dollar index produced mixed action in soymeal and soyoil. CBOT March soymeal ended up $1.10 to $323.40/short ton; March soyoil finished up 0.01c to 51.19c/pound.

Argentine Farmers Celebrate Soy-Saving Series Of Showers (Source: CME)
A steady series of showers over the past week came just in the nick of time for Argentina's thirsty soybeans, setting them on course for a relatively healthy crop. The rain "was a significant relief, that will allow for very good growth of the late soy planted in January," the Buenos Aires Cereals Exchange said in its weekly crop report. "In general, the rain helped boost soil moisture levels ... helping the late soy the most," said brokerage Panagricola vice president Ricardo Baccarin. In the central farm belt, "most of the early-planted soy was also favored by solid rainfall, guaranteeing the water needed for the advanced reproductive phases those crops are currently going through," the exchange said. However, analysts warned that the crop has already suffered damage and that more rain will be needed through February. About 10% of the soybean crop's potential output has been lost already, said Francisco Mariani, analyst with farm-services company Lartirigoyen.
Analysts forecast 2011-12 soybean production between 45 million and 49.5 million metric tons -- well short of the record 54.5 million tons harvested in the 2009-10 season. Argentina is the world's second-largest corn exporter, leads soyoil and soymeal exports and ranks third in global soybean exports. Global grain traders have been closely watching weather conditions in both Argentina and Brazil for signs of a snap in the drought which would stem crop losses. The corn crop has already suffered major losses with potential production down by over a third. Early in the season, many had expected production to top 30 million tons. Now, the Buenos Aires exchange predicts corn output of just 22 million tons. After the severe drought in December, recent showers brought relief to the late-planted corn, but were too late for the fields planted early, the Buenos Aires Exchange said. Recent showers are a boon, but below-average rainfall is expected to continue in the coming months due to the La Nina weather phenomenon.
La Nina involves the periodic cooling of the equatorial Pacific Ocean that usually brings dry weather to the farm belts of Argentina, Uruguay, Paraguay and the south of Brazil. La Nina is expected to fade in March or April, but its effects will linger through the southern hemisphere winter with dryness continuing until October or November, according to Eduardo Sierra, chief climatologist for the Buenos Aires Cereals Exchange.

VEGOILS-Palm oil dips on ringgit; upbeat global data caps losses
SINGAPORE, Feb 2 (Reuters) - Malaysian crude palm oil inched down as the ringgit currency strengthened against the U.S. dollar, making it expensive for refiners to buy feedstock to process at a time when demand has slowed.
"Market volume is on the low side as we are heading towards another long weekend, so these two days the market will not be too active," said a trader with a foreign commodities brokerage in Kuala Lumpur.  

Brazil 11/12 soybean crop seen 71.9 mln T-Abiove
SAO PAULO, Feb 1 (Reuters) - Brazil's 2011/12 soybean crop that is now being harvested is seen at 71.9 million tonnes, down from a previous view earlier in the month of 74.6 million tonnes, the grain crushing industry association Abiove said on Wednesday.
Abiove said exports would also fall over the February-January commercial to 33 million tonnes from 34 million tonnes previously forecast.

High demand whittled record canola crop-trade
WINNIPEG, Manitoba, Feb 1 (Reuters) - Strong export demand for canola chewed through much of Canada's record-large harvest of
the oilseed last autumn, leaving year-end stocks slightly smaller than they were a year earlier, according to traders and
analysts.
In a Reuters poll, eight traders and analysts estimate, on average, there were 9.1 million tonnes of canola in farm bins and
grain elevators on Dec. 31 - down 3.5 percent from a year earlier.

20120203 1023 Global Commodities Related News.

Bets on Raw Materials Rising Most Since ‘06 as Factories Grow: Commodities (Source: Bloomberg)
Investments in commodities are expanding at the quickest pace in six years on signs of rising economic growth, even as JPMorgan Chase & Co. and Goldman Sachs Group Inc. warn that some prices have rallied too fast. The number of futures contracts on 24 commodities from oil to copper rose 9.3 percent last month, the most since January 2006, according to data compiled by Bloomberg. Speculators are the most bullish since November, Commodity Futures Trading Commission data show. Gold and silver had the best start to a year since 1983, orange juice posted its biggest rally in more than three decades, the LMEX gauge of six industrial metals rose the most since 2006, and cattle futures advanced to a record.
Raw materials are rebounding from the first annual drop in three years on growing signs the world will skirt another recession and reports that manufacturing is expanding from China to India to the U.S. Investors are betting record-low U.S. interest rates and China’s efforts to shore up growth will bolster demand. The optimism is being tempered by Europe’s widening debt crisis, with the International Monetary Fund warning it could derail the global economy.

Corn (Source: CME)
CBOT corn ends slightly higher amid a lack of fresh news, as worries about South American supplies and strong cash prices underpin. Analysts say the market tracked changes in the U.S. dollar. Traders expect crop shortfalls in South America will drive stronger U.S. export sales, and weekly sales released reaffirmed that sales are improving. Still, questions persist about whether demand will fall again as prices climb. CBOT March corn ends up 1c to $6.43 a bushel.

Wheat (Source: CME)
U.S. wheat futures back tracktrack, ending lower amid profit-taking and ideas the market was overbought on Wednesday's rally. Traders say that recent gains on severe cold in Russia and Ukraine may have reflected a "buy the rumor" scenario, and that traders were now selling the fact. Uncertainty about Russian exports limits losses, but traders say even if the country enacts restrictions, world supplies are ample. CBOT March wheat falls 11 1/2c to $6.62 3/4 a bushel, a day after hitting a fresh 4-month high. KCBT Wheat ends down 4 3/4c to $7.17 3/4 and MGEX March wheat closes down 3/4c to $8.36.

Rice (Source: CME)
US rice futures end lower, extending their recent steep drop amid poor demand. Weak demand, both domestically and for export, has weighed on the market for months, and spot futures have hit fresh 8-month lows this week. CBOT March rice ends down 10c to $13.64 per hundredweight.

GRAINS-U.S. grains retreat; traders eye Russia's export decision
NEW DELHI, Feb 2 (Reuters) - U.S. wheat slid around half a percent as investors booked profit, snapping a two-day winning streak fuelled by the possibility that Russia may clamp down on exports after bitter cold ravaged the Black Sea region.
"The fall is a natural corollary after a sharp rise in the past two days, due to concerns over production in the Black Sea and fears that Russia could restrict exports," said Jonathan Barratt, chief executive of BarrattBulletin, a Sydney-based commodity research firm.

China plays down rising corn import concern-senior official
BEIJING, Feb 2 (Reuters) - China has not changed its grain import policy and will continue to allow an "appropriate volume" of imports, playing down global concern over rising corn imports by the world's second-largest consumer, a top government agriculture official said on Thursday.
"There is no change regarding the country's grain import and export policy," Chen Xiwen, director of the Office of Central Rural Work Leading Group, the top body which guides the country's agricultural policy, told a news conference.

Cargill, CHS to expand U.S. PNW grain export venture
CHICAGO, Feb 1 -    U.S. agribusiness firms Cargill Inc and CHS Inc  said on Wednesday they are expanding their joint grain export venture in the Pacific Northwest.
Temco, a 50-50 Cargill-CHS venture which operates a facility in Tacoma, Washington, will expand to include facilities in Kalama, Washington, that is leased by CHS, and the Cargill Irving Elevator at Portland, Oregon, the two firms said in a joint statement.

S.Africa corn output forecast revised down-attache
Feb. 1 - Following are selected highlights from a report issued by a U.S. Department of Agriculture attache in South Africa:
"Commercial farmers in South Africa planted 2.63 million hectares of corn for the 2011/12 MY (2012/13 MY for South Africa), almost 11 percent more than the previous season's 2.37 million hectares on the back of higher domestic corn prices.

U.S. seeks to idle fragile land amid crop boom
WASHINGTON, Feb 1 (Reuters) - The U.S. government will idle "as many acres as we possibly can" of fragile farmland but record-high grain prices are pulling land into crop production, a senior Agriculture Department official said on Wednesday.
Some 6.5 million acres could return to tillage when Conservation Reserve contracts expire this fall. That's one-fifth of the land in the government's program and may be the largest turnover ever for the reserve, created in 1985 during an agricultural recession.

China to invest in agriculture innovation to boost food security
BEIJING, Feb 1 (Reuters) - China said on Wednesday it would boost agriculture innovation in an effort to increase food output, signaling that the world's most populous country is trying to tackle outdated farm and food infrastructure to feed its people.
China accounts for a fifth of the world's population with less than 9 percent of its arable land, and the cabinet suggested in a document that China's leaders were aiming to get serious about technology to ensure long-term food supplies.

Ukraine exports 1.9 mln T grain in Jan - lobby
KIEV, Feb 1 (Reuters) - Ukraine's grain exports fell by 27 percent to 1.9 million tonnes in January 2012 compared with December 2011, Ukrainian Agrarian Confederation (UAC) grain lobby said on Wednesday.
UAC quoted its director Serhiy Stoyanov as saying the volume included 1.3 million tonnes of maize and 540,000 tonnes of wheat.

India 2011-12 Wheat Output Estimated At 88.31 Mln Tons - Officials (Source: CME)
India's wheat output this crop year is estimated to rise to a record 88.31 million tons due to higher acreage and favorable weather, senior farm ministry officials said. The country's wheat output in the year ended June 30, 2011, was 85.93 million tons. This will be the second straight year of a record crop, boosting the government's plan for introducing a food security program this year that promises cheap foodgrains to the poor and malnourished. Wheat is sown in the winter month of November and its harvesting starts from end-March to early April. Prolonged cold weather across the breadbasket states as well as good soil moisture after the monsoon has improved the crop outlook.

South Africa's 2011-12 Corn Output Seen At 11.5M Tons On Dry Weather  (Source: CME)
South Africa's 2011-12 commercial corn production estimate has been revised downwards to 11.5 million metric tons, the U.S. Department of Agriculture's Pretoria attache said in a report released, as dry weather during planting season meant it occurred two to four weeks later than was optimal. Nevertheless, the USDA expects South Africa to be able to export an extra two million tons of corn in 2011-12 due to increased production, with total corn plantings standing almost 9% more than the previous year at 3.13 million hectares. Corn plantings have increased in 2011-12 due to concerns that Argentina's drought would limit global supplies, the USDA said, and because of record high domestic prices caused by exports depleting domestic stock levels. Indeed, the USDA said corn exports will likely slow down over the next few months to reach 2.4 million tons by the end of the 2010-11 marketing year, as current stock levels could be depleted before the start of the new marketing season.
South Africa has already exported almost 2.15 million tons of corn, the USDA said, including 1.47 million tons of white corn and 684,000 tons of yellow corn.

Corn Imports Don't Mean Shortfall In Domestic Market (Source: CME)
China doesn't suffer from a shortage of corn in the domestic market, despite its importing corn, a senior government official said. "We export a considerable amount of corn-based products such as starch and alcohol, and animal products that consume corn," Chen Xiwen, general director of the Office of the Central Rural Work Leading Group, told a news conference. "If we take this into consideration, we export more corn than import," he said, according to a transcript of his remarks published on a central government website. Chen also said some corn imports are aimed at balancing regional demand, and the price of imported corn in south China, a major consuming area, might be lower than domestic corn. China bought about 3 million-4 million metric tons of corn from the U.S. last year to replenish state reserves, traders said.

Farmers, Traders Pack Meeting To Discuss Rice Contract Changes (Source: CME)
Rice farmers, traders and grain elevator managers packed a CME Group Inc. meeting on possible changes to the exchange's futures contract that would tie prices more closely to the cash market. The wide gap between CME futures prices and the price of actual grain in the southern U.S., where most of the crop is grown and processed, has become a sore point for farmers, who have difficulty hedging under such circumstances. The exchange aims for convergence, when the cash-market price and futures price come together as expiration approaches. But the gap has widened in recent years, with futures at times approaching a $2 premium to the cash market. The reason for the widening gap is debated, with some farmers blaming an influx of speculative fund money into futures markets in recent years. Others, including several traders and a procurement agent with Anheuser-Busch Inc., said the weak basis was more a function of poor supply and demand fundamentals, which tend to be reflected in basis.
Traders warned moves to force convergence could reduce liquidity in what is already a thinly traded market. Fred Seamon, a CME economist leading the exchange's look at the issue, said basis started to deteriorate in the last decade as U.S. supplies grew even as world supplies tightened. While CME futures are tied to U.S. supplies, there are few other options for traders around the world who want to trade rice futures. Wednesday's meeting drew roughly 100 people, many who came from the heart of the rice industry in Arkansas and Louisiana, and others who participated by phone. Farmers said the lack of convergence is causing so much uncertainty for rice growers that many are increasingly deciding to plant corn or soybeans instead. "We are losing rice acres to other crops, and the lack of ability to comfortably hedge is a major reason," said John Owen, a Louisiana producer who has chaired a committee with the U.S.A. Rice Federation, a trade group, to examine the issue.
Owen and other proponents of change say the wheat market, which faced similar problems before the CME changed the contract a couple years ago, serves as a "road map" for rice. The changes CME put in place in wheat market allow prices charged by grain-elevator operators to fluctuate, and the rate steadily increased after the new system took effect. Rising storage costs encourage market participants to deliver grain when a futures contract expires, and price convergence depends in part on physical grain being delivered. CME said the wheat market has consistently converged since the changes were enacted in 2010. Critics of the changes to the wheat contract say the variable storage rates have caused their own distortions, with rising rates giving elevators an incentive to keep grains in storage rather and causing artificially high prices for end-users. They also say it has distorted deferred futures contract prices, and chased some speculators out of the market.
Traders also said that thanks to dramatic moves over the past couple of days, cash market prices for rice had essentially converged with futures. Rice futures have tumbled sharply the past couple days, hitting an eight-month low Wednesday. Owen said the exchange could unveil changes as soon Feb. 14, at an industry conference in Washington. Seamon wouldn't confirm that, saying that while he discussed speaking at the conference on changes to the contract, he hadn't yet been formally invited. The Commodity Futures Trading Commission, which pushed for the changes in the wheat contract, "continues to monitor the situation and to encourage the CME and the USA Rice Federation to work together to arrive at a mutually acceptable solution," a spokesman said Wednesday. Changes to encourage convergence do carry risks, and could potentially hurt volume, said Jack Scoville, a broker and vice president of Price Futures Group, and one of a relatively small number of analysts who tracks rice.
"Basically when you force convergence, you're forcing futures down to cash most of the time," Scoville said.

Iran's ships stopped from shipping Ukrainian grain
KIEV, Feb 1 (Reuters) - Traders are no longer booking cargoes on Iranian ships to transport grain exports from Ukraine
because of difficulties with payments following European Union sanctions on Iran, traders said on Wednesday.
"The issue has nothing to do with the government of Ukraine," one Ukrainian trader said. "Traders cannot book Iranian vessels
because banks refuse to transfer money to Iranian companies due to the embargo."

Macquarie sees rise in C/S Brazil cane output
LONDON, Feb 1 (Reuters) - Macquarie Bank sees 2012/13 cane output in the centre-south of Brazil at around 520 million tonnes,
about 5.5 percent up from 493 million in 2011/12, a director said on Wednesday.
"We estimate a range between 515-530 million tonnes in 2012/13 with 520 million tonnes as our best guess at this stage of the
crop," Carlos Murilo Barros de Mello, managing director of the physical and derivatives sugar trading business at Macquarie
in Brazil, said in an emailed interview.

Indonesia's Jan Sumatra coffee bean exports fall 64 pct y/y
JAKARTA, Feb 2 (Reuters) - Robusta coffee bean exports for January from Indonesia's main growing area in Sumatra slumped 64 percent to 6,306.41 tonnes from a year earlier, government trade data showed on Thursday.
Indonesia shipped 17,589.10 tonnes of robusta in the same month a year ago, Muchtar Lutfie, research head of the Indonesia Coffee Exporters Association's (AEKI) Lampung branch, told Reuters.

Brazil CS sugar output slows as harvest ends
BRASILIA, Feb 1 (Reuters) - Sugar production in Brazil's center-south region slowed to a trickle during the first half of January, data from cane industry association Unica showed on Wednesday, as a disappointing harvest draws to a close.
The cane crush from the outset of the season on April 1 until Jan. 16 stood at 492.7 million tonnes, up from 492.2 million tonnes by Jan. 1, Unica said. Sugar production was barely changed from early January at 31.2 million tonnes.

German final season sugar test content up on year
HAMBURG, Feb 1 (Reuters) - The final test on sugar beet delivered to refineries in Germany in the current 2011/12 season showed sugar content of 18.05 percent, the association of German sugar producers WVZ said on Wednesday.
This was up on the average 17.27 percent sugar content for the previous full 2010/11 season.

Exporters absent again from I.Coast cocoa auctions
ABIDJAN, Feb 1 (Reuters) - Ivory Coast conducted a second day of auctions to forward-sell cocoa on Wednesday, but a number of leading export companies continued their boycott in protest over a lack of clarity in the top grower's overhaul of its sector.
The auctions are part of a return to a regulated system aimed at guaranteeing Ivory Coast's farmers a price floor for their produce. It is a precondition for IMF-backed debt relief needed to rebuild the country after last year's civil conflict.

Brent rises above $112 on Iran, promising economic data
SINGAPORE, Feb 2 (Reuters) - Brent crude rose above $112 a barrel, extending gains for a third day on persistent worries over supply from Iran, while upbeat global manufacturing data also boosted appetite for riskier assets.
"We've got a bullish bias and the Chinese PMI data was supportive of that," said Jonathan Barratt, chief executive of Barratt's Bulletin.

Shell eyes big growth, but at big cost
LONDON, Feb 2 (Reuters) - Royal Dutch Shell  said it was targeting aggressive growth in the coming years, with the start-up of big new projects and higher investments set to drive a 50 percent rise in cashflow and a 25 percent rise in oil and gas production.
However, weaker-than-expected results for the fourth quarter, partly due to dismal industry-wide refining margins, and an anaemic dividend hike, raised the question of whether Shell was simply running faster to stand still, with investments offering ever-dwindling returns.

Kazakhstan to ban light fuel exports for entire 2012
ASTANA, Feb 2 (Reuters) - Kazakhstan will extend a ban on exports of light refined fuels to the end of this year in a bid to stem re-exports of these oil products from its northern neighbour Russia, the oil and gas minister said on Thursday.
The government regularly suspends exports of oil products at the end of each year to accumulate enough fuel for spring sowing and for harvesting in the summer and autumn. The current temporary ban on oil product exports would have ended on July 1.

Oil in equilibrium at $100 - Mercuria
DAVOS, Feb 1 (Reuters) - Oil prices are comfortable around $100 a barrel and are unlikely to spike much higher for long even if Iranian oil supply is disrupted, the head of energy trading house Mercuria says.
Marco Dunand, chairman of Mercuria Energy Group, told Reuters the oil market had steadied despite turbulence in the Middle East and North Africa over the last year and tension between Iran and the West over Tehran's nuclear programme.

Oil Gains in New York, Trims Weekly Decline Before U.S. Jobs Data Release (Source: Bloomberg)
Oil rose in New York, trimming the biggest weekly decline in more than a month, before a report that may show U.S. employment increased in January. Futures gained as much as 0.4 percent, snapping the longest losing streak since August. Employment climbed by 140,000 last month after rising 200,000 in December and the jobless rate held at an almost three-year low of 8.5 percent, according to a Bloomberg News survey of economists before the Labor Department report. London-traded Brent’s premium to West Texas Intermediate widened to the biggest in 12 weeks yesterday. Crude for March delivery advanced as much as 42 cents to $96.78 a barrel in electronic trading on the New York Mercantile Exchange. It was at $96.71 at 10:08 a.m. Sydney time. The contract fell 1.3 percent to $96.36 a barrel yesterday, the lowest since Dec. 19. Prices are down 2.9 percent this week, the biggest drop since the week ended Dec. 16.

Gold Rises to Two-Month High as Fed’s Bernanke Says U.S. Economy Improving (Source: Bloomberg)
Gold rose to a two-month high after Federal Reserve Chairman Ben S. Bernanke said he sees signs the U.S. economy is improving, boosting prospects for commodity demand. “Indicators of spending, production, and job-market activity have shown some signs of improvement,” Bernanke said today in prepared testimony to the House Budget Committee in Washington. Improving growth prospects will help buoy gold as “deflationary concerns subside,” said Scott Gardner, the chief investment officer at Verdmont Capital SA in Panama. “When economic news comes in better than expected, it boosts commodities, including gold,” Gardner said in an e-mail. Gold futures for April delivery gained 0.6 percent to settle at $1,759.30 an ounce at 1:35 p.m. on the Comex in New York, after reaching $1,763.80, the highest since Dec. 2. The metal climbed 11 percent last month, the biggest January rally since 1983.