Wednesday, February 8, 2012

20120208 1811 FCPO EOD Daily Chart Study.

FCPO closed : 3155, changed : +70 points, volume : higher.
Bollinger band reading : pullback correction downside biased.
MACD Histrogram : recovering, seller lock in profit.
Support : 3150, 3100, 3070, 3050 level.
Resistance : 3200, 3250, 3270, 3300 level.
Comment :
FCPO closed recorded substantial gains with higher volume participation. Soy oil price currently trading higher after overnight closed 1 tick higher while crude oil price also rallying higher.
Market continue to have technical rebound with some short covering activities after recent falls and news on Malaysia government has issued 2012 tax free crude palm oil export quotas of 3 million tonnes after weeks of delay plus lower inventory and production estimates. Meanwhile, market also awaits USDA report on soy bean crop forecast.
Technical reading remained suggesting a pullback correction downside biased market development testing resistance near middle Bollinger band level.
When to buy : buy at support or weakness with quick cut loss and profit target.
When to sell : sell at resistant or strength with quick cut loss and profit target.

20120208 1729 FKLI EOD Daily Chart Study.

FKLI closed : 1548.5, changed : +10.5 points, volume : higher.
Bollinger band reading : upside biased with possible pullback correction.
MACD Histrogram : rising, buyer in advantage.
Support : 1540, 1530, 1515, 1505 level.
Resistance : 1550, 1565, 1570, 1580 level.
Comment :
FKLI closed recorded gains again for 4 trading days in a row with better volume transacted after a long holidays doing 4.5 points discount compare to cash market that rallied higher. Overnight U.S. markets closed little higher and today Asia markets ended in positive territory while European markets currently registering gains.
Global markets sentiment improves on better U.S. unemployment data, positive development over Greece debt talks and speculation of China monetary easing as inflation slowing.
Daily chart study adjusted to suggesting an upside biased market development with potential pullback correction with MACD indicator just having positive crossed up.
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.

20120208 1703 Regional Markets EOD Daily Chart Study.

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

20120208 1636 Global Market & Commodities Related News.

Shares edge up, euro eases as Greek talks drag
TOKYO, Feb 8 (Reuters) - Asian shares nudged up near their highest in more than five months and the euro hovered close to an 8-week high as investors kept hopes alive for an agreement on details of a new Greek bailout package despite further delays.
"It's really a reaction in terms of the better turn in the U.S. markets," said Guy Stear, head of research with Societe Generale in Hong Kong. U.S. stocks ended up, underlined by  improved sentiment on recent above-forecast economic figures.

FOREX-Euro near 2-month high on hopes for Greece debt deal
SINGAPORE, Feb 8 (Reuters) - The euro eased on Wednesday but still held near a two-month high, supported by hopes that Greece may soon agree to austerity steps needed to secure a second bailout and avoid a disorderly default.    
The dollar rose versus the yen, helped by dollar demand from Japanese importers. Cross/yen pairs were also mostly firmer, their near-term technical outlook having improved after they breached some resistance levels recently.

Malaysian exporters halt palm oil supply to Iran -sources
KUALA LUMPUR, Feb 8 (Reuters) - Malaysian palm oil exporters have stopped supplying most of the 30,000 tonnes of the food staple Iran used to buy each month from the Southeast Asian producer as fresh Western financial curbs on Tehran stymie payment procedures, two trading sources said.
The halt in Malaysia's palm oil exports, which the traders said started late last year, is the latest sign that sanctions aimed at persuading Iran to abandon a suspected nuclear weapons programme have started to bite.

Corn, wheat steady after fall; soy near 3-month top
SINGAPORE, Feb 8 (Reuters) - Chicago wheat and corn were little changed on Wednesday after dropping in the last session on the back of milder Black Sea weather, as investors squared positions ahead of a key U.S. demand and supply report.
"The soy market is slightly bullish at the moment because of the South American crop worry," said analyst Ker Chung Yang at Phillip Futures in Singapore. "There have been beneficial rains for the crop yields to improve but expectations are that USDA will reduce production estimates."

Illinois farmers worried by extremely warm winter
CHICAGO, Feb 7 (Reuters) - Illinois, a key farm state in the heart of the Corn Belt, is basking in its sixth warmest winter in 117 years good news for residents who have not had to shovel snow but a red flag for some of the state's most productive businesses: farms.
Illinois and neighboring Iowa - also in the midst of a balmy winter - produce about a third of all the corn and soybeans grown in the United States, the world's largest exporter of both crops. Farmers in both states feel more comfortable when there is a substantial snow cover to ensure adequate soil moisture that can nurture crops through the region's hot dry summers.

Rains this week may stanch Argentine soy losses
BUENOS AIRES, Feb 7 (Reuters) - Rains this week in Argentina may stanch soy losses after a drought chopped yields by an estimated 20 percent and took as much as 30 percent off the corn crop in the global food supplier, forecasters said on Tuesday.
Storms are expected to sweep the country's Pampas agricultural area on Wednesday. As global grains stocks tighten, Argentine growers as well as government beancounters and sovereign bondholders hope the rain refreshes soy crops baked by what has been an unforgiving Southern Hemisphere summer sun.

Paraguay soy crop seen down 45 pct due to drought
ASUNCION, Feb 7 (Reuters) - Paraguay's soy output is expected to plunge 45 percent from last year due to a drought that hit crops across the region, a bigger loss than previously forecast, a soy farmers group said on Tuesday.
The estimate by the UGP association points to 2011/12 production of 4.6 million tonnes compared with a record 8.4 million tonnes last season in Paraguay, the world's No. 4 soy exporter.

US farmers to plant largest corn area in 68 yrs
Feb 7 (Reuters) - U.S. farmers this spring will seed the largest area with corn since World War Two as a mild and dry winter has raised expectations for a quick planting this spring , a Reuters poll of 24 analysts showed, signaling a boost to razor-thin stocks and lower prices in 2012.
The survey showed that farmers were gearing up to plant 94.2 million acres, which could produce a record crop of 13.8 billion bushels based on a trendline yield of 161.4 bushels per acre. It would surpass the previous record of 13.1 billion in 2009.
 
India allows 1 mln T extra sugar exports-govt source
NEW DELHI, Feb 7 (Reuters) - India has decided to allow unrestricted exports of one million tonnes of sugar, a government source said on Tuesday, in line with industry expectations in the world's second-biggest producer of the sweetener after Brazil.
The biggest consumer of sugar, India had earlier allowed mills to export 1 million tonnes of sugar in the year beginning in October and the fresh exports had been on the cards for some time.

EIA sees 2012 US gas production up 2.3 pct from 2011
NEW YORK, Feb 7 (Reuters) - The U.S. Energy Information Administration on Tuesday slightly raised its estimate for domestic natural gas production growth in 2012, expecting output this year to be up 2.3 percent from 2011's record levels.
In its February Short-Term Energy Outlook, the EIA said it expected marketed natural gas production in 2012 to rise by 1.5 billion cubic feet per day (bcfd) to a record 67.64 bcfd, up from its January outlook that had output this year at 67.34 bcf daily.

Brent holds above $116 on U.S. stocks draw; Greece risk weighs
SINGAPORE, Feb 8 (Reuters) - Brent crude futures were steady above $116 a barrel, as a lift in sentiment from an unexpected fall in U.S. crude inventories was dampened by uncertainty over Greece's ability to resolve its debt problems.
"There is little doubt that should Greece come to an agreement with private debt holders and agree to tough austerity measures this would be viewed favorably in risk asset markets," said Ben Le Brun, market analyst with OptionXpress in Sydney.

LME copper steady; Greek debt talks eyed
SHANGHAI, Feb 8 (Reuters) - Copper prices steadied in London, after two straight days of losses, while investors focused on the euro zone debt situation after Greece delayed yet again its decision on a bailout deal.
"Greece is still the major focus of the market, so any negative news out of Greece could put pressure on metals prices," said analyst Judy Zhu of Standard Chartered in Shanghai.

Australia's Century zinc mine output slips in 2011
SYDNEY, Feb 8 (Reuters) - Output from Australia's Century zinc mine, the world's second largest, slipped 2.6 percent in 2011 versus the previous year, the mine's Chinese owner Minmetals  said on Wednesday.  
Century, which is expected to roughly maintain production levels until it runs out of ore in about four years, produced 497,251 tonnes of contained zinc over the year, down from 510,590 tonnes in 2010.

China's steelmakers next in line for debt stress
SHANGHAI, Feb 8 (Reuters) - China's steelmakers have racked up $400 billion in debt, which some may struggle to repay, making them a potential drag on a banking sector already facing rising bad loans from the property sector and local governments.
Steel firms that already have soaring debt-to-equity ratios and a shortage of liquid assets in relation to their short-term debts face sliding profit margins, rising raw materials costs, overcapacity and slower growth in the world's top steel market.

Alcoa reviewing future of Australian aluminium smelter
SYDNEY, Feb 8 (Reuters) - Alcoa Australia  said it was reviewing the future of its 190,000 tonne Point Henry aluminium smelter as tough global economic conditions have rendered the operation unprofitable.
Alcoa said the aluminium industry had been severely impacted by difficult macro economic conditions, with the higher Australian dollar placing increasing pressure on the market.

World copper mine capacity 26.2 mln T by 2015-ICSG
LONDON, Feb 7 (Reuters) - Annual copper mine production capacity is expected to reach 26.2 million tonnes in 2015 after rising at an average rate of 6.6 percent a year from 2012 through 2015, the International Copper Study Group (ICSG) said.
"Owing to project postponements following the 2008 economic crisis and to technical, financial and permitting delays, 74 percent of this growth (4.3 million tonnes) is expected to
only occur in 2014/2015," the Lisbon-based ICSG said in a press release on Tuesday.  

Port Hedland iron ore exports to China slow in January
SYDNEY, Feb 8 (Reuters) - Iron ore shipments to China through Australia's Port Hedland, one of the world's biggest export terminals, fell 15 percent in January compared to December, according to data released by the port authority on Wednesday.                
A cloudy outlook for steel demand in China has restrained  the appetite of steel mills for iron ore since late last year, according to commodities traders.

Gold holds near $1,745 as Greece buys more time
SINGAPORE, Feb 8 (Reuters) - Gold prices held steady around $1,745 an ounce, as investors waited with caution for Greece to grind towards a deal on a rescue package that it urgently needs after missing a string of deadlines.
"If Greece were to agree on everything right away, I don't think it would solve everything because they will still have to implement the measures," said Jeremy Friesen, commodity strategist at Societe Generale in Hong Kong.

METALS-LME copper steady; Greek debt talks eyed
SHANGHAI, Feb 8 (Reuters) - Copper prices steadied in London on Wednesday, after two straight days of losses, while investors focused on the euro zone debt situation after Greece delayed yet again its decision on a bailout deal.
Three-month copper on the London Metal Exchange  traded at $8,509 a tonne, up 0.3 percent, at 0255 GMT. Copper has notched up four consecutive weeks of gains, and has rallied almost 12 percent so far this year.  

PRECIOUS-Gold holds near $1,745 as Greece buys more time
SINGAPORE, Feb 8 (Reuters) - Gold prices held steady around $1,745 an ounce on Wednesday, as investors waited with caution for Greece to grind towards a deal on a rescue package that it urgently needs after missing a string of deadlines.
Athens tested investor's patience yet again on Tuesday by postponing a decision on whether to accept austerity and reform measures in exchange for a 130 billion euro ($172 billion) bailout from the IMF and EU.

20120208 1112 Global Market & Commodities Related News.

Asian Stocks Advance on Greek Debt Talk Progress, Toyota Profit Forecast
Feb. 8 (Bloomberg) -- Asian stocks rose for a third day as Greece’s government edged closer to securing a bailout package and Toyota Motor Corp. (7203) raised its profit forecast. Toyota rallied 2.8 percent in Tokyo after Asia’s largest carmaker raised its earnings outlook by 11 percent as new models boosted sales. Panasonic Corp. (6752) advanced 1.9 percent amid a report the company is in talks with Fujitsu Ltd. and Renesas Electronics Corp. to merge their chip operations. BHP Billiton Ltd. (BHP) slid 0.9 percent in Sydney after earnings fell short of analyst estimates. The MSCI Asia Pacific Index climbed 0.3 percent to 125.33 as of 10:07 a.m. in Tokyo, extending the gauge’s highest level since September. Japan’s Nikkei 225 Stock Average and the broader Topix Index both advanced 0.5 percent. Australia’s S&P/ASX 200 Index increased 0.1 percent and South Korea’s Kospi Index rose 0.5 percent.

GLOBAL MARKETS-Shares becalmed, euro eases as Greek talks drag
SINGAPORE, Feb 8 (Reuters) - Asian shares remained becalmed on Wednesday and the euro edged off an 8-week high as further delay in agreeing on details of a new Greek bailout package tempered the optimism that had driven U.S. stocks and commodities higher.
"Despite uncertainty about the Greek situation, global markets have remained steady, with the recently positive economic data out of the United States supporting gains for the time being," said Yumi Nishimura, senior technical analyst at Daiwa Securities.

S.Korea says Saudi Arabia ready to consider additional crude supplies
SEOUL, Feb 8 (Reuters) - South Korea's presidential office said in a statement on Wednesday that Saudi Arabia would "actively consider" support including additional crude supplies if requested by Seoul, as it looks for alternatives to Iranian oil.
The remarks came in a meeting between Saudi Arabia Oil Minister Ali al-Naimi and South Korean President Lee Myung-bak.

China buys up Saudi, Russian oil to squeeze Iran
BEIJING/LONDON, Feb 7 (Reuters) - China is scouring the world for alternative oil supplies to replace a fall in its imports from Iran, as it seeks to negotiate lower prices from Tehran, and has been drawing heavily on Saudi Arabia.
Industry sources told Reuters that Beijing had bought the bulk of an increase in crude oil supplies from top oil exporter Saudi Arabia in the last few months.

EIA cuts 2012 non-OPEC oil output growth forecast
NEW YORK, Feb 7 (Reuters) - The U.S. Energy Information Administration cut its forecast for oil output growth by producers outside of OPEC by 140,000 barrels per day for 2012, but boosted estimates for 2013 by 90,000 bpd, according to the agency's monthly outlook released on Tuesday.
The EIA said it expects an oil exports dispute between South Sudan and Sudan to cut the South's oil production by more than half this year, to 210,000 bpd from 425,000 bpd in 2011. Output was expected to bounce back to around 340,000 bpd in 2013.

Oil rises on spread trade, Canadian outage
NEW YORK, Feb 7 (Reuters) - Brent oil rose slightly on Tuesday and U.S. crude jumped more than 1.5 percent, bolstered by an unplanned outage at a Canadian oil sands plant and optimism about an agreement on Greece's debt problems.
"The spread got above $20 and it looks like some big players came in and pulled it back, then the dollar fell on expectations a Greece debt deal is coming," said Chris Dillman, analyst at Tradition Energy in Stamford, Connecticut.

US natgas ends lower despite cooler forecast
NEW YORK, Feb 7 (Reuters) - U.S. natural gas futures ended lower on Tuesday, shrugging off colder forecasts for the Northeast and Midwest as mounting concerns about record high supplies pressured the complex.
"The 11-15 day forecast does have some cooler weather, but I think the market is flinching ahead of a storage report on Thursday that's not going to be very supportive," said Tim Evans, energy analyst at Citi Futures Perspective in New York.

20120208 0944 Malaysia Corporate Related News.

RM1bn Sibu Jaya township to be ready by 2023
The Sarawak Housing Development Commission, in collaboration with Amcorp Group, will invest about RM1bn for the total development of the new Sibu Jaya township. “The development will be carried out under a revised masterplan and will be the biggest and most uniquely planned housing area in the state,” said the State Housing Minister Datuk Amar Abang Abdul Rahman Johari. About 106ha out of 567ha earmarked for development under the masterplan has already been developed with a GDV value of RM470m (Financial Daily)

EPMB to expand further in Indonesia
EP Manufacturing Bhd (EPMB) is bent on diversification to reduce its dependence on its bread-and-butter automotive oarts manufacturing business. The company is looking into real estate development, road construction, and more water concessions in Indonesia to safeguard its revenue stream. Its executive chairman, Hamidon Abdullah, said the company’s initial water treatment concession in Kota Serang in Indonesia is scheduled for operation this month. (Financial Daily)

Axiata may see India unit’s revenue cut over licence issue
Axiata Group’s 19.7% owned by Idea Cellular claimed that the order by India’s Supreme Court for the Indian government to revoke 122 telecommunication licences, issued under a scandal tainted 2008 sale, may reduce up to 4% of its revenue. These licences were said to have been issued in 2008 under the influence of bribery and violation of rules and led to the government losing as much as USD36bn (RM108.36bn) in revenue. (Malaysian Reserve)

Naim Indah’s major shareholder plans to dispose of shares
Naim Indah Corp Bhd says one of its major shareholder, holding 22.8% stake, is having discussion with various parties with the intention to dispose of its shares in the company, “However, no details of the proposed disposal has been finalized, including the price,” the company said in reply to Bursa Malaysia’s query on an unusual market activity of its shares. (Malaysian Reserve)

TMS set for KTM job
Internet-based applications and solutions provider The Media Shoppe Bhd (TMS) and Hopetech SB are expected to be jointly awarded a RM21m contract to design, supply and commission passenger information and closed-circuit television systems for KTM Bhd. The job will take up to 14 months to implement and will be awarded by the Transport Ministry, according to sources. An announcement that will incorporate more details on the contract is expected to be made today. Hopetech, is a systems integrator and solutions provider for automated revenue collection, road telematics and secure electronic payment systems in the transportation and electronic purse sectors. (StarBiz)

Green Ocean banks on new technology for profit
Green Ocean Corp Bhd is poised to post a record profit of between RM15m and RM20m in the financial year ending 31 Mar 2013. The loss-making company is expected to register its first profit in four years for the financial year ending 31 Mar 2012. “We should make a profit in the range of RM2.5m,” said group managing director Lee Byoung Jin in an interview with Business Times. Lee, a South Korean national, and parties aligned to him control about 28% of the company. Lee is banking on the company’s exclusive technology to push the company back to the road of profitability. The technology, developed by the Malaysian Palm Oil Board (MPOB), and known as Novelin, allows Green Ocean to produce cooking oil which has cold stability at zero Celcius, which means it can be used during the cold winter period. (BT)

Plan for RM13bn Danga Bay waterfront project
Businessman Datuk Lim Kang Hoo, who recently made a privatisation bid for developer Tebrau Teguh Bhd, is planning a more than RM13bn project in Danga Bay, Johor Bahru. The soon-to-be-launched project is billed as the most exclusive and unique waterfront development in Iskandar Malaysia’s southern economic corridor over the next five years. It will spread over 120 ha at the estuaries of three rivers at the Danga Bay. The Danga Bay waterfront development is an important component in one of the flagship developments in Iskandar Malaysia. (BT)

The push to bring three mega-casinos to South Florida fizzled in the Florida Legislature last Friday, defeated for the time being by mounting opposition across the state and the uncertainty of election-year politics. The bill faced its first test before a committee in the state House but lacked the votes to progress. Rather than lose the vote, Rep Erik Fresen, the Miami Republican who sponsored the House Bill, pulled the measure and postponed the vote. There is little chance that it will come up for another vote this year. Jessica Hoppe, the senior vice- president for government affairs and general counsel of Genting's Resorts World Miami, said that the company remained "committed to the vision of world-class destination resorts in the South Florida community". (New York Times, Business Times)

Volkswagen (VW) is in talks with DRB-Hicom to take over some manufacturing capacity at Proton’s modern but underused plant in Tanjung Malim, Perak, and make Malaysia its regional production hub. In return, it would help the local car manufacturer, which recently bought a controlling stake in Proton, make the brand more globally competitive through its engineering network and experience in emerging fast-growing markets such as China and Brazil, according to the Wall Street Journal (WSJ). (Malaysian Insider)

Tan Sri Zarinah Anwar will step down as Securities Commission (SC) chief next month amid pressure over the market regulator’s role in Sime Darby’s acquisition of a 30% stake in property group E&O last August, The Straits Times reported. According to the Singapore daily, Zarinah, the first woman to head the capital markets watchdog, will leave at the end of her contract, ending six years at the helm of the commission. Government officials and financial executives close to the situation told the newspaper that “ Prime Minister and Finance Minister Najib Razak will decide on her replacement in the coming weeks.” “The E&O deal has put Tan Sri Zarinah in a tight spot. The reason is that her husband, who is E&O chairman, had raised his personal stock holdings in the company just days before Sime Darby’s announcement,” it reported. Candidates to replace Zarinah include deputy central bank governor Datuk Muhammad Ibrahim and the SC’s managing director Datuk Ranjit Ajit Singh.
It also said that Datuk Johan Raslan, executive chairman of PricewaterhouseCoopers, has repeatedly turned down the offer to head the watchdog agency. (Malaysin Insider, Straits Times)

CIMB Malaysia and China International Capital Corp. are the last two companies looking at buying the Asia-Pacific assets of Royal Bank of Scotland (RBS) Group, the Australian Financial Review reports, without saying where it got the information. RBS told the paper that it was in talks with two potential Asian buyers for the assets but declined to disclose their identity, according to the report in the local business daily. (Fox Business)

RHB Bank Bhd expects its retail banking business to grow at a faster pace than the industry this year after making aggressive moves to expand its customer channels. The bank's retail assets are estimated to have grown by about 19% last year, beating the industry's 12% growth; while deposits may have expanded by about 15% compared with the industry's eight to 10% growth, said Vince Au Yoong, acting director for retail banking. Its net non-performing loan (NPL) ratio has been trending down over the last 12 to 18 months as it improved its collective infrastructure and invested in more risk tools, he said. Overall net NPL currently stands at between 2% and 3%. (BT)

Tenaga Nasional (TNB) is keen to develop a 1,400 MW coal-based power plant in Cox's Bazar, Bangladesh worth US$2.5bn (RM7.53bn) on a JV basis to meet demand for power in the country. According to a source close to the deal, the Bangladeshi government has already engaged TNB and had proceeded with a letter of intent indicating its interest in establishing a JV for the purpose. "Currently, both sides are deliberating to reach an understanding on the equity sharing and electricity production cost for the import-based coal-fired mega power plant," said the source. (Bernama, Malaysian Reserve)

On the listing of Felda Global Ventures Holding (FGVH), PM Datuk SeriNajib said the company would continue to be a Malay-based entity as the majority of its shares would be held by Koperasi Permodalan Felda (KPF). He said the listing would make Felda more competitive in the international market. The listing, on the Main Board of Bursa Malaysia, is aimed at consolidating Felda and widening business opportunities with international partners through the commercialisation of its downstream products. He added that the final structure of the proposed listing of FGVH would be ready before Feb 13. "We will brief Felda managers and settler representatives on the final structure during a meeting on Feb 13. It will also include the number of shares and windfall that each of the 112,635 KPF members are expected to get." (NST)

The Government may consider removing its sugar subsidy due to a rise in diabetic cases in the country and channel this into more pressing areas, said Deputy Prime Minister Tan Sri Muhyiddin Yassin. However, he said various factors must be considered before such a decision was taken, including the global market price for sugar. “The Government could stop its subsidy for sugar but not now. In the long run, perhaps. “We will study this and see if the funds can be channelled into other areas where subsidies are needed,” he added. (Starbiz)

The sugar subsidy for this year to 2014 has increased because the higher world prices compared with the price signed under the long-term contract (LTC) from 2009 to 2011. Domestic Trade, Cooperatives and Consumerism Minister Datuk Seri Ismail Sabri Yaakob, said sugar price has increased by US$0.26 per lb compared with US$0.175 per lb in 2009-2011. "As a result, the subsidy borne by the government from 2009-2011 is still based on US$0.175 per lb under the LTC," he added. He said for the next three years, the subsidy would increase based on the new LTC price of US$0.26 which the government signed in January. (Bernama)

Malaysia has issued this year's tax-free crude palm oil export quotas of 3m tonnes after weeks of delay, sources said on Sunday. Sources with direct knowledge of government plans said some palm oil firms have received their quotas last week. The total quotas account for 15.5% of projected output this year in Malaysia. The 2012 tax-free export quota for crude palm oil is less than the 3.6m tonnes shipped out without any tariffs to Malaysian-owned refiners in Europe and Asia. A government source said the refiners have not been forgotten as the government is looking at providing incentives to refiners to encourage them to go further downstream and produce higher value products compared to Indonesia. "The incentives will be done via special funding from the government. There will be an announcement at the end of this month," added the source. (Reuters)

Malaysia Airports (MAHB) will be awarding concessions for 225 outlets at KLIA2 by July this year. Of the total, 118 lots will be allocated for retail, 81 lots for food and beverage and 26 lots for services. MAHB commercial services senior general manager Faizah Khairuddin said some 500 businesses have expressed interest to operate at KLIA2. MAHB is also working on a mall sited in front of the terminal which will offer non-duty-free goods. Faizah added that MAHB is targeting to hit RM3bn in revenue by 2014, two-thirds of which will be come from non-aeronautical sources, such as rental of space, car parks and transit hotels. MAHB also hopes to achieve RM185.5m in property development revenue by 2014. (Malaysian Insider)

AirAsia has obtained an Air Operators Certificate (AOC) from the Japanese Civil Aviation Bureau for its JV entity with All Nippon Airways Co Ltd to establish a low cost airline in Japan. The AOC shall enable AirAsia Japan to operate aircraft in its fleet for commercial flights to international and domestic destinations. The JV is expected to commence operations in August 2012. (Malaysian Reserve)

The total project cost for the five epicentres, named The Venice, The Gateway, The Rivera, The Bund and The Fisherman Wharf, are estimated at RM13.4bn.The 120ha project is part of the 800ha earmarked for the Danga Bay waterfront development.The development will be handled by Iskandar Waterfront Holdings Sdn Bhd (IWH).(BT)

Malaysian Rating Corp Bhd (MARC) has placed Kinsteel Bhd's RM100m Murabahah Commercial Papers/Medium Term Notes Programme and RM100m Murabahah Medium Term Notes Programme rated MARC-2ID /AID and AID on the negative. MARC said the challenging operating environment for the domestic steel sector has continued to impact Kinsteel group's financial performance.The rating reflects Kinsteel group's weakening finances that are likely to worsen by part-debt repayment via full subscription of the RM280m redeemable convertible unsecured loan stock (RCULS), to be issued by 37.3%-owned Perwaja Holdings Bhd (PHB). To date, Kinsteel has paid RM70m for the subscription with the balance to be paid early next month. (BT)

The opening of the Johor Premium Outlets (JPO) late last year has created much interest among many Malaysian shoppers who are still new to the shopping concept. Southern region representative of the Malaysian Association for Shopping and High Rise Complex Management Jenny Chan said since it was a new shopping format, it would take time for shoppers to adapt and adopt. “JPO is targeting at a specific group of shoppers hunting for reasonably priced quality and branded items,'' Chan said in an interview with StarBiz. She said the opening of JPO saw many brands making their debut in the Johor Baru retail sector and offered to Johoreans a wider range of brands. Chan said JPO's presence would not affect other shopping mall business as its product range was totally different from normal shopping malls. She added that shopping mall tenant mix was based on the target audience needs, especially within 5km radius or up to 10km radius. (Starbiz)

Century Logistics Holdings Bhd's floating storage units (FSUs) operation in Johor that was partly interrupted for two months late last year is currently back in business. Deputy MD Dr Mohamed Amin Kassim said its FSU operations in Pasir Gudang was interrupted from the middle of Sep to middle Nov where the number of its FSUs operating in Johor was down to the three from eight. Last Sep, the Marine Department issued a directive to prevent any FSUs from operating off Pasir Gudang, mainly to improve access to the RM5bn Pengerang petroleum terminal. “Thus, in order to continue our operations, we had discussed with the Marine Department and Port of Tanjung Pelepas to reposition our FSUs. All the eight FSUs are now back in operations, having repositioned off Port of Tanjung Pelepas areas,” he said. (Starbiz)

ACE market-listed Digistar Corp Bhd will make an application to the Securities Commission for its migration to the Main Market before its results are released at the end of this month, sources said. (Starbiz)


VW seen as potential OEM partner for Proton
DRB-HICOM Bhd, the country’s largest automotive company by sales, is understood to be pursuing a deal to rope in Volkswagen AG (VW), Europe’s largest carmaker, as one of Proton Holdings Bhd’s original equipment manufacturing (OEM) partners. (Source: Business Times)

Dr M: Proton reserves fall from RM4b to RM600m
Proton Holdings Bhd’s cash reserves fell from a high of RM4 billion to a staggering low of RM600 million to help cut company losses, said its adviser Tun Dr Mahathir Mohamad. He said that Tengku Tan Sri Mahaleel Tengku Ariff had accumulated some RM4 billion when he was the chief executive officer (CEO) of the company. Of the amount, RM1.8 billion was spent on Proton’s Tanjung Malim plant. (Source: Business Times)

Wah Seong in West Africa oil palm venture
Wah Seong Corp Bhd, an oil and gas services  company, is diversifying its business to plant oil palms in West Africa. In its filing to Bursa Malaysia, Wah Seong said its unit WS Agrco Industries Pte Ltd was buying a 51 per cent stake in oil palm company Atama Resources Incorporated for US$25 million (RM75 million) from Silvermark Resources Inc and Giant Dragon Group Bhd Ltd. (Source: Business Times)

20120208 0944 Global Economic Related News.

The JPMorgan Investor Confidence Index for Singapore, taken every six months, stands at 86, the lowest since it was launched a year ago (121 in Jul 2011 and 134 in Dec 2010; index level of 100 is neutral, while 200 is extremely optimistic and zero is extremely pessimistic). The survey also found Singapore remained the favourite investment destination among the respondents over the next six months, followed by Asian regional markets and real estate as more investors shun the US and Europe due to perceived higher risks. (Reuters)

Singapore’s foreign reserves in Jan increased to US$245.49bn (US$237.74bn in Dec). (Bloomberg)

China: Central bank pledges support for homebuyers as sales slide

China’s central bank pledged support for first-home buyers as a crackdown on real-estate speculation threatens to trigger a property slump in the world’s second-biggest economy. Officials will increase support for construction of affordable housing and ensure that “loan demand from first-home families” is met, the People’s Bank of China said on its website. A government clampdown aimed at make housing affordable is cooling prices and driving down transactions as Europe’s sovereign-debt crisis caps export demand. Home prices in 52 of 70 major cities declined in Dec from Nov, according to government data. [Bloomberg]

China’s non-manufacturing PMI eased to 52.9 in Jan (56 in Dec). (Bloomberg)

China’s industrial profits rose 25.4% yoy in YTD Dec (24.4% in Nov). (Bloomberg)

China’s National Development and Reform Commission said it would raise gasoline and diesel prices by Rmb300 (US$47.50) per metric ton, effective midnight Wednesday, representing an increase of 3.3% and 3.6% over the current average gasoline and diesel retail ceiling benchmarks of Rmb9,080 and Rmb8,230, respectively, according to Dow Jones Newswires calculations. The NDRC last changed gasoline and diesel prices on 9 Oct, cutting them by Rmb300 per ton, in response to declining international oil prices. (WSJ)

China’s leading index for Dec eased 0.1% mom to 100.25 (100.33 in Nov). (Bloomberg)

Japanese Finance Ministry data showed Japan conducted ¥1.02tr (US$13.3bn) worth of unannounced intervention during the first four days of Nov, after selling a record ¥8.07tr on 31 Oct, when the yen climbed to a post-World War II high of 75.35 against the USD. (Bloomberg)

The HSBC Business Activity Index for India’s services sector bounced to 58 in Jan from 54.2 in Dec. (Reuters)

Thailand’s foreign reserves rose to US$178.4bn in the week ending 27 Jan, from US$176.2bn the previous week. (Bloomberg)

Bank Indonesia’s Business Survey showed production capacity utilisation rose in 4Q11 to 72.06% (74.22% in 3Q11, 71.31% in 4Q10). (Bloomberg)

Retail sales in Indonesia rose 22.2% yoy in Dec (26.8% in Nov). (Bloomberg)

Indonesia’s GDP growth rose 6.5% yoy in 4Q (unchanged in 3Q), meeting expectations to take full year 2011 growth to 6.5% (6.2% in 2010). (Reuters)

Indonesia’s power prices will surge by an average of 10% from Apr under a government plan to ease the budget deficit. Widjajono Partowidagdo, the deputy energy minister, said the proposed increase could save up to Rp8.9tr (US$997m) in electricity subsidy costs. (Jakarta Globe)

Indonesia’s foreign reserves in Jan increased to US$111.99bn (US$110.12bn in Dec). (Bloomberg)

The Philippine central bank will release about PP100bn (US$2.35bn) into the financial system when a 3% pt cut in banks' required reserves to 18% takes effect in Apr, but the move should not be inflationary, a senior official said. (Reuters)

The consumer-price index in the Philippines rose 3.9% yoy in Jan (4.2% in Dec), lower than the 4% expected by economists. (WSJ, Bloomberg)

The Philippines’ foreign reserves in Jan increased to US$77bn (US$75.3bn in Dec). (Bloomberg)

Taiwan: Exports fell in January for the first time since 2009

Taiwan’s exports fell for the first time in more than two years in January, giving the central bank more reason to extend an interest-rate pause and support growth. Shipments abroad declined 16.8% from a year earlier, compared with a 0.6% gain in Dec, the Ministry of Finance said in Taipei. Taiwan slipped into a recession last quarter as Europe’s debt crisis slowed global demand, and the central bank has refrained from raising borrowing costs in the past two policy meetings after five previous rate increases. The government predicts economic growth will decelerate to 3.91% in 2012. [Bloomberg]

South Korea: Set to follow Australia’s rate pause as US revives
South Korea will probably follow Australia’s lead and refrain from cutting interest rates tomorrow as the global economy shows signs of strength and officials highlight price pressures. The Bank of Korea will keep the benchmark seven-day repurchase rate unchanged at 3.25% according to 18 of 19 economists in a Bloomberg News survey. US growth, “robust” indicators from China and progress in taming Europe’s debt crisis encouraged Australian policy makers to keep rates on hold, the central bank indicated. [Bloomberg]

EU: Greek haggling drags on as meeting to seal bailout delayed
Greek Prime Minister Lucas Papademos postponed a meeting with heads of the political parties supporting his caretaker government a second time in as many days as the government and international creditors haggled over terms to secure a second aid package. Papademos will meet with the leaders in Athens tomorrow, instead of tonight as previously scheduled. Instead, he will meet tonight with the so- called troika, comprising the European Commission, the European Central Bank and the International Monetary Fund, to put the final touches to terms required for a EUR130bn (USD172bn) rescue package, the spokeswoman said. [Bloomberg]

US: Bernanke reiterates us labor market ‘long way’ from normal
Federal Reserve Chairman Ben S. Bernanke repeated that the job market is still far from healthy after signs of economic improvement over the past year, and he called on lawmakers to reduce the long-term budget deficit. The jobless rate unexpectedly fell to 8.3% in Jan, a government report showed. Bernanke’s testimony indicated that his views on the health of the labor market haven’t changed, even though he didn’t refer to the Jan data. In response to a question, Bernanke said the unemployment rate of 8.3% understates the weakness of the labor market. He said it’s important to also look at other gauges of the labor market, including underemployment. [Bloomberg]

US Federal Reserve Chairman Ben Bernanke said the 8.3% Jan unemployment rate understates weakness in the US labour market “in some broad sense”, saying “it is very important to look not just at the unemployment rate, which reflects only people who are actively seeking work. There are also a lot of people who are either out of the labour force because they don’t think they can find work” or in part- time jobs. He added that the Fed’s forecast for 2012 growth at 2.2-2.7% suggests the economy will grow fast enough to absorb new entrants into the workforce while “not making sharp improvements on the unemployment rate.” (Bloomberg)

US Federal Reserve Chairman Ben Bernanke renewed a pledge to prevent Europe's financial crisis from damaging the U.S. economy, saying "we are in frequent contact with European authorities, and we will continue to monitor the situation closely and take every available step to protect the US financial system and the economy.” (Reuters)

US Federal Reserve Chairman Ben Bernanke defended the Fed's policies against charges from Republican lawmakers they risked sparking inflation, saying the economy still needs plenty of support. "The basic reason for low long-term rates, which are also a feature of every other industrial economy, are low inflation, slow expected growth and the fact that the dollar is a safe haven," Bernanke said, adding that he was seeing signs that some of the factors dampening US business investment, including uncertainty surrounding European bank woes, might be waning. (Reuters)

Job openings in the US gained 258,000 or 8.3% mom, the biggest increase since Feb 2011, to 3.38m in Dec (3.12m in Nov), according to the Labor Department. In the 12 months ended in Dec, the economy created a net 1.4m jobs, representing 48.4m hires and 47m separations (Bloomberg)

Nonfarm payrolls jumped 243,000, the largest gain since Apr, according to the Labor Department, as factory jobs grew by the most in a year. Economists had expected a gain of 150,000. The jobless rate accordingly fell to 8.3% - the lowest since Feb 2009 - from 8.5% in Dec. (Reuters)

US employers announced 53,486 planned job cuts in Jan, the highest level in four months and is up 28% from 41,785 in Dec as retailers and financial firms cut jobs (12,426 and 7,611 jobs, respectively), according to Challenger, Gray & Christmas, Inc. On a yoy basis, the measure was 38.9% higher than the 38,519 layoffs announced in Jan 2011, although the report said that a surge in job cuts at the start of the year is not unusual with Jan being historically the heaviest month of cuts. (Reuters)

US factory orders rose 1.1% mom in Dec (a revised 2.2% in Nov), the second consecutive monthly rise, according to the Commerce Department. Economists had expected a gain of 1.5%. During the full year 2011, factory orders gained 12.1% after a 12.9% rise in 2010. (Reuters)

The Institute for Supply Management’s services index for the US rose to 56.8 in Jan, the highest level since Feb 2011, from a revised 53.0 in Dec. Economists had expected the index to hold steady at 53.0. The new orders index climbed to 59.4 from 54.6, though the prices paid measure edged up to 63.5 from 62.0. Employment in the services sector rose to the highest level in six years at 57.4 from 49.8 (Reuters)

The US Congressional Budget Office said it expects the Treasury Department to report a US$27bn deficit for Jan, versus a US$50bn deficit in Jan 2011. This budget gap will bring the total deficit for the first four months of fiscal 2012 to US$349bn, a decrease of about US$70bn from the same period of fiscal 2011. (Reuters)

US consumer credit rose US$19.3bn in Dec to US$2.5tr (US$20.4bn in Nov, a breakthrough gain), according to the US Federal Reserve. Economists had expected a gain of US$7bn. The back-to-back increase at the end of 2011 was the biggest since Oct-Nov 2001, with Dec marking the second month of significant gains for revolving credit (US$2.8bn in Dec following Nov’s US$5.6bn surge). (Bloomberg)

The US’ International Council of Shopping Centers and Goldman Sachs Retail Chain Store Sales Index climbed 1.8% in the week ended 4 Feb from the week before on a seasonally adjusted, comparable-store basis, rising for the second-straight week (0.1% in the prior week). On a year-on-year basis, the reading rose 3.5% (3.9% in the prior week). (Dow Jones)

The International Monetary Fund warned that an escalation of Europe's debt crisis could slash China's economic growth in half this year, and urged Beijing to prepare stimulus measures in response. "The global economy is at a precarious stage and downside risks have risen sharply," the IMF said, citing the possible deep crunch in the financial sector in Europe that would be felt around the globe. "Should such a tail risk of financial volatility emanating from Europe be realised, it would drag China's growth lower." (AFP)

India's government has revised down its economic growth forecast for the current fiscal year to 6.9% in the year to Mar, below the 7.25-7.75% range given by the government in its Dec 2011 forecast, new data from the statistics ministry showed. The government also expects manufacturing output to grow 3.9% this fiscal year compared with a 7.6% increase a year earlier. Farm output is expected to rise 2.5%, compared with 7.0%. (AFP)

The JPMorgan Investor Confidence Index for Singapore, taken every six months, stands at 86, the lowest since it was launched a year ago (121 in Jul 2011 and 134 in Dec 2010; index level of 100 is neutral, while 200 is extremely optimistic and zero is extremely pessimistic). The survey also found Singapore remained the favourite investment destination among the respondents over the next six months, followed by Asian regional markets and real estate as more investors shun the US and Europe due to perceived higher risks. (Reuters)

Singapore’s foreign reserves in Jan increased to US$245.49bn (US$237.74bn in Dec). (Bloomberg)

Australia's central bank held its cash rate steady at 4.25% on Tuesday, a surprise to many who had thought it would cut rates, though it did leave the door open to an easing if the economy weakened. (Reuters)

The tourism industry in Singapore posted strong growth in 2011 with tourism arrivals and spending reaching new highs of 13.2m and S$22.2bn respectively. (ST)

The IMF has cut its forecast for China's 2012 economic growth to 8.25% from the 9% projected in Sep, and it warned that exports would be a significant drag on expansion in the coming two years. (China Daily)

20120202 0941 Global Market Related News.

Asian Stocks Advance on Greek Debt Talk Progress, Toyota Profit Forecast (Source: Bloomberg)
Feb. 8 (Bloomberg) -- Asian stocks rose for a third day as Greece’s government edged closer to securing a bailout package and Toyota Motor Corp. (7203) raised its profit forecast. Toyota rallied 2.8 percent in Tokyo after Asia’s largest carmaker raised its earnings outlook by 11 percent as new models boosted sales. Panasonic Corp. (6752) advanced 2.4 percent amid a report the company is in talks with Fujitsu Ltd. and Renesas Electronics Corp. to merge their system chip operations. BHP Billiton Ltd. (BHP) slid 0.8 percent in Sydney after posting earnings that fell short of analyst estimates. The MSCI Asia Pacific Index climbed 0.3 percent to 125.35 as of 9:22 a.m. in Tokyo. Japan’s Nikkei 225 Stock Average and the broader Topix Index both advanced 0.6 percent. Australia’s S&P/ASX 200 Index increased 0.1 percent.

Japanese Stocks Advance on Greece Bailout Talks, Improved Toyota Forecast (Source: Bloomberg)
Feb. 8 (Bloomberg) -- Japanese shares rose, with the Nikkei 225 (NKY) Stock Average set for its highest close in more than three months, as Greece’s government edged closer to securing a second debt bailout and Toyota Motor Corp. (7203) raised its earnings forecast. Canon Inc. (7751), a Japanese camera maker that gets 31 percent of its sales in Europe, rose 1 percent. Toyota, Asia’s largest automaker, added 2.8 percent after raising its net-income outlook by 11 percent as new models boosted sales. Fujitsu Ltd. (6702) climbed after a report it’s in talks with Panasonic Corp. (6752) and Renesas Electronics Corp. (6723) to merge chip operations. The Nikkei 225 Stock Average rose 0.7 percent to 8,975.80 as of 9:18 a.m. in Tokyo, headed for its highest close since Oct. 31. The broader Topix Index gained 0.6 percent to 777.66.

Dow Average Advances to Highest Level Since 2008 on Greek Rescue Talks (Source: Bloomberg)
U.S. stocks advanced, sending the Dow Jones Industrial Average to its highest level since May 2008, as Greece made progress on measures to secure international aid. Seven out of 10 groups in the Standard & Poor’s 500 Index gained, helping the measure rebound from an earlier decline. McDonald’s Corp., the world’s biggest restaurant chain, added 1.4 percent ahead of its sales report. Yum! Brands Inc., owner of the KFC and Taco Bell fast-food chains, climbed 2.6 percent as earnings surged 30 percent. Anadarko Petroleum Corp. (APC), the biggest U.S. independent oil and natural-gas producer by market value, increased 5.2 percent as profit beat estimates. The S&P 500 rose 0.2 percent to 1,347.05 at 4 p.m. New York time, wiping out an earlier decline of as much as 0.6 percent. The Dow advanced 33.07 points, or 0.3 percent, to 12,878.20.

European Stocks Slide for Second Day; Swatch, UBS Decline After Earnings (Source: Bloomberg)
European stocks declined for a second straight day as Greek talks on measures needed to get a second bailout continued and China said industrial-output growth is likely to slow. Bayerische Motoren Werke AG (BMW) and Rio Tinto Group led carmakers and mining companies lower. LVMH Moet Hennessy Louis Vuitton SA (MC) lost 2.6 percent after three Bulgari directors sold a 558 million-euro ($733 million) stake. Swatch Group AG (UHR), the world’s biggest watchmaker, sank 4 percent as profit trailed projections. Banco Comercial Portugues SA (BCP) jumped 21 percent. The Stoxx Europe 600 Index declined 0.3 percent to 263.55 at the close of trading. The gauge has still advanced 7.8 percent this year amid optimism that the euro area will contain its sovereign-debt crisis and that the economic recovery in the U.S. remains intact.

Emerging-Market Stocks Rise as Greece Meetings May Signal Deal Progress (Source: Bloomberg)
Emerging-market stocks rose to a six- month high as investors bet Greece will reach an agreement for a second bailout, decreasing the risk Europe’s debt crisis will drag down global growth. The MSCI Emerging Markets Index advanced 0.1 percent to 1048.56 at the close in New York, the highest since Aug. 4. Brazil’s Bovespa index rose to a nine-month high. The Shanghai Composite Index slipped 1.7 percent, the biggest drop in three weeks. Russia’s Micex Index retreated 0.9 percent, and the FTSE/JSE Africa All Share Index fell 0.6 percent in Johannesburg to the lowest since Jan. 31. Greek Prime Minister Lucas Papademos was to meet tonight with officials from the European Commission, the European Central Bank, and the International Monetary Fund to discuss the final details of terms for a 130 billion-euro ($172 billion) rescue package. He postponed until tomorrow a meeting with the heads of the political parties supporting his caretaker government.

Euro softer on Greece; Aussie jumps on RBA surprise
TOKYO, Feb 7 (Reuters) - The euro nudged lower in Asia, though most traders clung to hopes Greece would finally clinch a rescue package despite its politicians postponing a decision to.
"The $1.3230 area has proved strong resistance on a number of occasions, so once the Greek deal is reached the euro will most likely test it again," said Teppei Ino, currency analyst at Bank of Tokyo-Mitsubishi UFJ.

U.S. Job Openings Rise by Most in Almost a Year in Recovery Sign: Economy (Source: Bloomberg)
Job openings in the U.S. increased in December by the most in almost a year, showing employers are gaining confidence the economy will keep growing in 2012. The number of positions waiting to be filled climbed by 258,000, the biggest gain since February 2011, to 3.38 million, the Labor Department said today in Washington. Excluding government agencies, openings at private employers climbed to the highest level since August 2008. More openings mean companies may be looking beyond the European financial crisis and are making plans to expand this year as sales grow. Payrolls increased by 243,000 workers last month after a 203,000 gain in December, and the jobless rate fell to 8.3 percent, a three-year low, Labor Department figures showed on Feb. 3.

Bernanke: Joblessness Understates Weakness (Source: Bloomberg)
Federal Reserve Chairman Ben S. Bernanke said the 8.3 percent rate of unemployment in January understates weakness in the U.S. labor market. “It is very important to look not just at the unemployment rate, which reflects only people who are actively seeking work,” Bernanke said today in response to questions at a hearing before the Senate Budget Committee in Washington. “There are also a lot of people who are either out of the labor force because they don’t think they can find work” or in part- time jobs. The jobless rate unexpectedly fell to 8.3 percent in January, a government report showed on Feb. 3. Bernanke’s remarks indicate that his view that the labor market is a “long way” from returning to normal hasn’t changed since he used the same phrase when he testified to the House Budget Committee on Feb. 2.

Bernanke: Labor Market ‘Long Way’ From Normal (Source: Bloomberg)
Federal Reserve Chairman Ben S. Bernanke repeated that the job market is still far from healthy after signs of economic improvement over the past year, and he called on lawmakers to reduce the long-term budget deficit. “We still have a long way to go before the labor market can be said to be operating normally,” Bernanke said in testimony prepared for the Senate Budget Committee that is identical to remarks he gave on Feb. 2 to the House Budget panel. “Particularly troubling is the unusually high level of long-term unemployment.” The jobless rate unexpectedly fell to 8.3 percent in January, a government report showed on Feb. 3. Bernanke’s testimony today indicated that his views on the health of the labor market haven’t changed, even though he didn’t refer to the January data. The economy added 243,000 jobs last month, according to the report, exceeding the most optimistic forecast in a Bloomberg News survey of economists.

U.S. Consumer Credit Climbed by $19.3B in Dec. (Source: Bloomberg)
Consumer borrowing in the U.S. rose more than forecast in December, driven by demand for auto and student loans. Credit increased by $19.3 billion to $2.5 trillion, Federal Reserve figures showed today in Washington. The gain topped the $7 billion median forecast of economists surveyed by Bloomberg News and followed a $20.4 billion advance the prior month. Consumers “are willing to take on this debt because there is some increasing degree of confidence in the economy,” said Ken Mayland, president of ClearView Economics LLC in Pepper Pike, Ohio, who projected credit would climb by $15 billion, the highest in the Bloomberg survey. “Consumers over the past several years have done a pretty good job of repairing their balance sheets.”

China Central Bank Vows Support for Homebuyers (Source: Bloomberg)
China’s central bank pledged support for first-home buyers as a crackdown on real-estate speculation threatens to trigger a property slump in the world’s second- biggest economy. Officials will increase support for construction of affordable housing and ensure that “loan demand from first-home families” is met, the People’s Bank of China said on its website yesterday. A government clampdown aimed at make housing affordable is cooling prices and driving down transactions as Europe’s sovereign-debt crisis caps export demand. Fitch Ratings said yesterday that a “hard landing” for China’s economy is a key global risk, after the International Monetary Fund cautioned Feb. 6 that a deterioration in Europe could cut the nation’s growth rate almost in half. “The government doesn’t want to see home transactions slide too fast -- that may hurt economic growth,” said Lu Ting, a Hong Kong-based economist at Bank of America Corp.

S. Korea Set to Follow Australia Rate Pause (Source: Bloomberg)
South Korea will probably follow Australia’s lead and refrain from cutting interest rates tomorrow as the global economy shows signs of strength and officials highlight price pressures. The Bank of Korea will keep the benchmark seven-day repurchase rate unchanged at 3.25 percent according to 18 of 19 economists in a Bloomberg News survey. One analyst sees a cut to 3 percent. U.S. growth, “robust” indicators from China and progress in taming Europe’s debt crisis encouraged Australian policy makers to keep rates on hold yesterday, the central bank indicated. South Korea’s expansion may gradually pick up pace in the second half of this year as global conditions improve, the Bank of Korea said yesterday .

India Predicts Weakest Economic Growth Since 2009, Adding to Rate-Cut Case (Source: Bloomberg)
India’s government predicted the weakest economic expansion this year since 2009, adding pressure on the central bank to reduce interest rates. Gross domestic product will probably rise 6.9 percent in the 12 months through March from a year earlier, the Central Statistical Office said in a statement in New Delhi today. The median of 15 estimates in a Bloomberg News survey was 7 percent. Asia’s third-largest economy expanded 8.4 percent in 2010-2011. Growth has slowed after the Reserve Bank of India raised rates by a record amount from 2010 until October last year to fight price increases and as Europe’s debt crisis and policy gridlock deter investment. The central bank has signaled readiness to follow nations from Brazil to Indonesia in lowering borrowing costs if inflation eases further, saying the government can help by curbing the country’s budget deficit.

Greek Haggling Drags on as Meeting to Seal Terms of Second Bailout Delayed (Source: Bloomberg)
Greek Prime Minister Lucas Papademos is set to negotiate with leaders of the political parties supporting his caretaker government after Athens missed another deadline to secure a second aid package. Papademos will see the chiefs in Athens today after delaying the meeting for a second time in as many days while Greek officials and international creditors haggle over the terms. Late last night, he held an unscheduled meeting with the so-called troika, comprising the European Commission, the European Central Bank and the International Monetary Fund, to put the final touches on terms required for a 130 billion-euro ($172 billion) rescue package.
Yesterday’s delay was yet another hitch in completing a package that’s been on the table since July. The government is struggling to arrange financing to avert a collapse of the economy, risking a new round of contagion in the euro area. With the country facing a 14.5 billion-euro bond payment on March 20, German Chancellor Angela Merkel warned this week that “time is running out” to reach an accord.

Greece, Troika Work on Final Rescue Draft (Source: Bloomberg)
Greek Prime Minister Lucas Papademos postponed a meeting with heads of the political parties supporting his caretaker government a second time in as many days as the government and international creditors haggled over terms to secure a second aid package. Papademos will meet with the leaders in Athens tomorrow, instead of tonight as previously scheduled, a spokeswoman for his office said. Instead, he will meet tonight with the so- called troika, comprising the European Commission, the European Central Bank and the International Monetary Fund, to put the final touches to terms required for a 130 billion-euro ($172 billion) rescue package, the spokeswoman said.
The delay is yet another hitch in completing a package that’s been on the table since July as the government struggles to wind up financing to avert a collapse of the economy, risking a new round of contagion in the euro area. With the country facing a 14.5 billion-euro bond payment on March 20, German Chancellor Angela Merkel warned yesterday that “time is running out” to reach an accord.

Papademos Seeks Greek Consensus on Cuts (Source: Bloomberg)
Greek Prime Minister Lucas Papademos plans to convene the nation’s political leaders to seek consensus on the cuts required for a bailout as unions called a strike to protest and European leaders pressed for answers. While Papademos and the party chiefs have agreed to make further cuts this year equal to 1.5 percent of gross domestic product, they have yet to close gaps over measures demanded by creditors for a 130 billion-euro ($171 billion) rescue. German Chancellor Angela Merkel said “time is running out,” while unions derided the conditions as “blackmail.”
“It is clear we are going into another drama for Greece with many questions unanswered,” Patrick Legland, head of research at Societe Generale SA, told Bloomberg Television today. “It’s kind of a catch-22 where they have to reduce their deficit but there is no growth. It’s very tricky.”

20120208 0941 Global Commodities Related News.

Corn (Source: CME)
US corn futures end slightly lower amid tight trading, with some profit-taking occurring after recent gains. Traders lack fresh impetus to push the market higher after its recent strength ahead of Thursday's USDA report. Hoped from it is clues to the extent of South American crop losses and potential gains for US exports. Meanwhile, corn fell despite gains in crude and a weaker dollar as a lack of fresh exports is keeping a lid on the market. CBOT March corn ends down 2c at $6.42 1/4 per bushel.

Wheat (Source: CME)
US wheat futures end lower on profit-taking and lack of fresh supportive news. While the recent cold snap, and potential wheat damage in the Black Sea region, is supportive to prices, analysts say damage has been factored in, and there's been no fresh news out of the region to drive markets higher. Analysts add that traders were taking profits after recent gains with Thursday's USDA report looming. CBOT March wheat ends down 6 1/4c to $6.62 1/4 per bushel; MGEX wheat closes down 2 1/2c to $8.38 1/2; KCBT wheat down 7c to $7.12.

Rice (Source: CME)
US rice futures end higher as the market continues to correct following last week's plunge. Weak demand has weighed on futures for months, but traders say the prospect of reduced U.S. acreage could limit losses going forward. CBOT March rice ends up 16 1/2c to $14.10 1/2 per hundredweight. Prices still down 59c since Jan. 26.

USDA to cut S. American corn, soy crop view
CHICAGO, Feb 6 (Reuters) - The U.S. government will likely slash its estimate of corn and soybean harvests in key crop producers Argentina and Brazil due to drought-like conditions throughout much of the growing season, analysts polled by Reuters said.
Market watchers were preparing for a jolt from the government after scrutinizing the weather reports from South America for the past month.

Canadian Wheat Board 2.0 to roll out in weeks
WINNIPEG, Manitoba, Feb 3 (Reuters) - The 77-year-old Canadian Wheat Board, which will soon lose its monopoly hold over Prairie grain, will be ready to compete openly in the fierce global grain market within weeks, according to the man charged with transforming it.
For the first time in generations, the Wheat Board must compete against heavyweights like Cargill , Viterra  and Richardson International for Western Canada's 2012/13 wheat, durum and barley, with its monopoly expiring before the next harvest begins.

Wheat, soy dip on strong dollar; USDA report eyed
SINGAPORE, Feb 7 (Reuters) - U.S. soybeans slid from a three-month top snapping five seesions of gains, while wheat fell around half a percent, pressured by a stronger dollar and Greek resistance to strict conditions attached to a bailout.
"I think you are going to see a little bit of position squaring before the USDA report," said Brett Cooper, senior manager of markets at FCStone Australia.

Ukraine to have 6.3 mln T wheat for export-consultant
KIEV, Feb 7 (Reuters) - Ukraine will have 6.3 million tonnes of wheat for export in the 2012/13 season, agricultural consultancy UkrAgroConsultant said on Tuesday.
Ukraine harvested 22.3 million tonnes of wheat in 2011 and exports could total 7-8 million tonnes in the 2011/12 season.  

USDA moves crop analysts as budget tightens
WASHINGTON, Feb 6 (Reuters) - The Agriculture Department, the primary source of U.S. crop and livestock data, will create nine regional centers in a move to provide more in-depth analysis while saving money, said Agriculture Secretary Tom Vilsack on Monday.
The centers, due to open in 2013, will be staffed by analysts who now work in state offices. The centers are the latest change in USDA reporting as it adjusts to federal budget cuts. USDA has eliminated half a dozen reports in the past year and said it would not report as often on vegetables and 13 fruit crops.

Indonesia 2012 Wheat Imports May Rise To 5.8 Mln Tons (Source: CME)
Indonesia's 2012 wheat imports may rise to around 5.8 million metric tons or even higher, compared with 5.2 million tons last year, Fransiscus Welirang, Chairman of wheat flour association Aptindo, said. "We expect wheat imports to rise more than 10% this year due to an increase in demand," Welirang said on the sidelines of a conference on food security. Wheat flour imports will likely be unchanged around 1.0 million tons. Total wheat and wheat flour imports may be between 6.8 million and 7.0 million tons, making Indonesia the second-biggest importer after Egypt, he said. The increase in purchasing power and change in dietary habits of the younger generation is pushing up demand for wheat, said Welirang, who is also the chief executive of Bogasari Flour Mills, one of Asia's largest mills. For example, he said, last year the growth in wheat demand was driven by greater consumption of bakery products.
Indonesia's demand for feed wheat is also rising due to greater milk consumption, which is pushing up animal feed requirements, Welirang said. Though Russian and Australian wheat prices are nearly the same, millers are opting for Australian wheat due to traditional preferences, he said, adding that Russian wheat will have to become significantly cheaper to make inroads into the Indonesian market.

Iran defaults on rice payments to India-traders
NEW DELHI, Feb 7 (Reuters) - Iranian buyers have defaulted on payment for about 200,000 tonnes of rice from their top supplier India, exporters and rice millers said on Tuesday, as trade between the two countries comes under mounting pressure from a new wave of Western sanctions against Tehran.
While a sharply weakening rial has made forward purchases costlier, financial sanctions are making it difficult for Iranian traders to continue using an unofficial route involving middlemen based in Dubai to keep paying Indian suppliers.

Australia's QSL sees no major flood damage to sugar
DUBAI, Feb 7 (Reuters) - Flooding in Australia has so far caused no major damage to the sugar crop, the head of the country's main sugar exporter said on Tuesday.
"The flooding has been mainly in the areas west of where sugar grows, in northern New South Wales and southern Queensland," QSL CEO Greg Beashel told Reuters in an interview.

Australia Floods Disrupt Some Farm Industries -Participants (Source: CME)
Widespread flooding in northern New South Wales and Queensland states is disrupting some agricultural and transportation activities, including sorghum harvesting and cattle sales, though the impact of the wet weather isn't all negative, according to industry participants. Farmers in much of northern New South Wales are suffering the effects of a second flood in as many months after a harvest of winter crops was delayed and damaged, while Queensland farmers are experiencing their third major flood in two years. The two states are home to some of Australia's best agricultural land, including the Darling Downs west of Brisbane. More than two-thirds of Australia's A$500 million sorghum crop, which is estimated to yield 2.4 million metric tons, grows in Queensland, but most of the flood-affected areas are west of the major growing areas, resulting in only minor damage to crops and disruptions to the harvest, which is getting under way, GrainCorp Ltd. spokesman Angus Trigg said by phone.
Sorghum crops in northern New South Wales are mostly four-six weeks from harvest and could yet benefit from the wet conditions, he said. While there could be some disruption to grain haulage in the region due to the impact of floods on some rail lines, GrainCorp is working with customers to minimize any impact, he said. Meanwhile, the transportation of cattle to markets in Queensland, which accounts for about half of national output, is also being disrupted due to restrictions to weight loads on roads and bridges, with some sales halted, Tim McRae, chief analyst at marketing concern Meat & Livestock Australia Ltd., said by phone. While floods are easing in some areas, it could be two weeks before the situation normalizes and what happens during that period is unknown, he said.
There is some short-term pain in terms of cattle movement disruptions, but for many producers this rain is perfectly timed and underpins a pretty good start to the year, with its boost to pastures and therefore improved production outlook, he said. Many meat processors in these areas have been working reduced days anyway, as export markets are slow at the moment, and the flood situation isn't nearly as severe as a year ago--when Brisbane Port, which moves 60% of Australia's annual A$4.5 billion in beef exports, was closed for more than a week, McRae said.

Mexican Government Still Evaluating Need For Sugar Import Quota (Source: CME)
Mexico is still evaluating domestic sugar supply-and-demand fundamentals before approving a potential import quota for 400,000 tons, the country's Economy Ministry said. The amount approved for the import quota, referred to as an "umbrella" quota, would not necessarily be the quantity imported. Its main purpose would be to prevent sharp price increases that normally occur in spite of regular import quotas. The ministry began considering such a quota late last year and is still analyzing the possibility. Juan Cortina, president of the national sugar industry chamber, said the import quota, if approved, wouldn't be in response to supply scarcity. Cortina said drought and other weather problems have hurt national sugar production and that Mexico will revise its output forecast downward in late February or early March, but not to the extent it will leave the country without sugar. "Whatever happens, domestic supplies are guaranteed," he said.

Paraguay 2011-12 Cereal Exports Seen At Record 2.1M Tons Despite Low Rainfall - FAO (Source: CME)
Paraguay's cereal exports for the 2011-12 crop year are estimated to reach a record level of 2.1 million metric tons, despite low rainfall and occasional drought affected some growing regions, the United Nations food body warned. Production of Paraguay's 2011 spring-summer crops, currently being harvested, has suffered from losses in the main producing area of the Eastern region and sharply reduced yields due to below average precipitation in December and January. "The most affected crop is corn, with about 58% of losses according to preliminary official estimates. Other food crops affected by drought are pulses, cassava and groundnuts. Severe losses have also been reported for cash crops cotton and sesame and, in particular for soybeans," said the FAO. Although detailed estimates of crop damage are not yet available, early assessments already point to a reduction in yield ranging from 30-70%. The most affected departments are Itapúa, Paraguarí, Alto Paraná and Canindeyú.
Production of Paraguay's 2011 wheat, recently harvested, is expected to hit 1.2 million metric tons, some 17% short of 2010 levels, the Food and Agriculture Organization said. "This mainly reflects freezing temperatures in June and July in the main producing areas of the Eastern region reduced crop yields by some 11 percent," said the FAO. But, in contrast, the country's 2011 corn output is estimated at record levels, the FAO said, citing good output of the first season and a significant increase in the area planted of the second season.

Brazil Seen With Sufficient Ethanol Stocks To Meet Demand (Source: CME)
The key center-south region of Brazil has stocks of ethanol biofuel equivalent to meet three months of demand, which should allow prices at the pump to remain stable until the country's main sugarcane harvest resumes, research firm JOB Economia said. The current situation contrasts with this time in 2011, when ethanol stocks in the region, where nearly 90% of the country's sugarcane is grown, only amounted to two months of demand, JOB said in a note. That wasn't enough to prevent fuel prices from soaring last year in March and April, just before the center-south sugarcane harvest got underway, and contributing to a rise in the inflation rate. JOB said the center-south's total ethanol stocks, as of mid-January, stood at 4.8 billion liters. Sales of ethanol by producers reached 1.52 billion liters in December. Prices for hydrous ethanol, used on its own as a fuel, averaged 2.01 Brazilian reais ($1.17) a liter last week, according to the National Petroleum Agency, or ANP.
Brazil's nationwide average price for gasoline, which contains 20% anhydrous ethanol, stood at BRL2.74 a liter last week. Prices for both products have remained virtually unchanged for the past six months but are up 7.3% in the case of hydrous ethanol and 4.6% in the case of gasoline from year-earlier levels, after a weak 2011 sugarcane harvest drove up ethanol prices.

Smaller Corn Supplies Expected Amid South America Drought (Source: CME)
A government report this week will highlight the impact of drought on corn and soybean crops in South America, and to what extent U.S. exports could increase as a result. The shift could have the greatest impact on U.S. corn supplies, according to analysts surveyed by Dow Jones Newswires. On average, analysts project the U.S. Department of Agriculture will estimate U.S. corn stockpiles of 797 million bushels when the crop marketing year ends Aug. 31, down from a January estimate of 846 million. The shift is expected because corn supplies in Argentina, a key exporter, are dwindling thanks to a hot, dry summer there. With fewer opportunities to buy from Argentina, buyers should have to turn to the U.S. instead. The two countries have vied for ranking as the world's top corn exporter in recent years said Mike Zuzolo, president of Global Commodity Analytics and Consulting. The U.S. Department of Agriculture will release its monthly supply and demand estimates Thursday at 8:30 a.m. EST.
Analysts on average expect the USDA will estimate Argentina's 2012 corn crop at 22.5 million metric tons, down from a January estimate of 26 million. Traders have been widely assuming a crop reduction there as conditions have worsened, and a USDA attache in Argentina last week pegged the country's corn crop at 21.8 million metric tons. "Though the weather situation in both Argentina and Brazil has improved from what was seen in December and January, some damage has been done, particularly to the corn crop," Western Milling analyst Joel Karlin said. Karlin said there could be further losses depending on the weather to close out the season. The USDA's downgrade to Argentina's corn crop should be accompanied by an increase to U.S. exports, analysts said. The question for traders is whether the government will be conservative in cutting the size of the crop and increasing U.S. exports, as many assumed was the case with its January estimate.
"I'm assuming the USDA will take a staggered approach," said Zuzolo, whose corn stockpile projection of 796 million bushels was in line with the analyst average. Analysts see the USDA cutting Brazil's corn output to 59.8 million metric tons, down from a January estimate of 61 million. While South America will be a focus for the corn market, Mexico, could be a potential wildcard, analysts said. Mexico is suffering through severe drought that has devastated the crop in many areas, which could lead it to import more U.S. corn. The USDA's Argentina soybean crop projection is expected to be cut to 48.5 million from a January estimate of 50.5 million, and Brazil's soy crop is projected at 71.7 million, down from a January estimate of 74 million. Analysts see only a minor reduction in U.S. soybean stockpiles. On average, U.S. analysts project stockpiles at the end of the crop marketing year Aug. 31 of 269 million metric tons, down from 275 million in January.
Soybeans have a later growing season, and damage to South America crops is not as certain, analysts said. For wheat, analysts on average expect U.S. stockpiles as of May 31 to remain virtually unchanged at 868 million metric tons, versus a January estimate of 868 million. Analyst estimates ranged from 836 million to 935 million metric tons. A key question, analysts said, is how emerging supply worries in the Black Sea region could affect U.S. exports. Futures prices have rallied recently on cold temperatures that have threatened crops in the Ukraine and other parts of Europe, as well as expectations Russia will move to curb exports.

Brazil sugar harvest expected to start late-Kingsman
DUBAI, Feb 6 (Reuters) - Global sugar supplies will be tight before the next harvest of top producer Brazil, which is likely to start later than normal to allow time for sucrose to develop in cane, sugar analyst Jonathan Kingsman said on Monday.
But the market would have to absorb a sizeable surplus as new-crop supplies appear, he told Reuters TV in an interview, speaking on the sidelines of the Feb. 4-7 Kingsman Dubai sugar conference.

Uganda Jan coffee exports up 5.2 pct y/y - UCDA
KAMPALA, Feb 7 (Reuters) - Uganda's coffee exports rose 5.2 percent in January compared to the same month last year thanks to dry weather that facilitated faster bean drying and expanded acreage, sector officials said on Tuesday.  
A source at the Uganda Coffee Development Authority (UCDA) said Uganda shipped 226,471 60-kilogramme bags of coffee in January, compared with 215,180 bags in the same month a year ago.

Kingsman sees fall in sugar surplus in 2012/13
DUBAI, Feb 7 (Reuters) - Consultancy Kingsman SA on Tuesday forecast a fall in the global sugar surplus to 4.7 million tonnes in 2012/13 from 8.2 million in 2011/12, based on national crop years.
Kingsman said the smaller surplus forecast was based in large part on an expected increase in global sugar consumption of just over 2.5 percent.

Australia's QSL sees no major flood damage to sugar
DUBAI, Feb 7 (Reuters) - Flooding in Australia has so far caused no major damage to the sugar crop, the head of the country's main sugar exporter said on Tuesday.
"The flooding has been mainly in the areas west of where sugar grows, in northern New South Wales and southern Queensland," QSL CEO Greg Beashel told Reuters in an interview.

Australia floods fail to dampen big cotton crop
SYDNEY, Feb 7 (Reuters) - Australia's projections for a bumper cotton crop remain on track despite a week-long deluge in major growing regions that forced thousands of residents from their homes and left rivers dangerously swollen.
Australia is the world's third-largest cotton and sugar exporter, fourth-largest wheat exporter and a big supplier of other agricultural and mineral commodities. Heavy rains a year ago contributed to one of Australia's biggest slumps in GDP in 20 years over the first quarter.

Ivory Coast rains raise hope on cocoa mid-crop
ABIDJAN, Feb 6 (Reuters) - Rainfall in most of Ivory Coast's main cocoa-growing regions last week raised hopes for the April-September mid-crop following a long dry spell, which dampened cocoa output expectations in the world's top grower, farmers said on Monday.
Cocoa watchers polled by Reuters last month expect total output for 2011/12 to be around 1.4 million tonnes, down around 10 percent on the International Cocoa Organisation's (ICCO) estimate for last year.

Dubai sugar silos expected to start in March
DUBAI, Feb 6 (Reuters) - Three new sugar storage silos at the Dubai Al Khaleej refinery, with a total capacity of 465,000 tonnes, are expected to start operations next month, site managers said on Monday.
The main dome-shaped raw sugar silo, with a capacity of 1 million tonnes, now holds some 250,000 tonnes of raw sugar, they added.

Oil Gains a Second Day on Demand Outlook as API Says U.S. Stockpiles Drop (Source: Bloomberg)
Oil gained a second day as investors speculated fuel demand may increase after an industry report showed crude stockpiles shrinking in the U.S., the world’s biggest consumer of the commodity. West Texas Intermediate futures climbed as much as 0.5 percent in New York from the highest close in a week yesterday. U.S. crude inventories fell 4.5 million barrels in the seven days ended Feb. 3, the first drop in three weeks, the American Petroleum Institute said after the settlement. An Energy Department report today may show supplies rose 2.5 million barrels, according to a Bloomberg News survey of analysts. “The API data provided momentum for the price gains,” said Ric Spooner, a chief analyst at CMC Markets in Sydney. “We remain in a range. Front-month prices for West Texas are in a trend channel pattern, with the range broadly between about $95.50 on the downside and $100.50 on the upside.”

After U.S. oil snub, Canada focuses on China
OTTAWA, Feb 6 (Reuters) - Canada will focus on exporting oil and other goods to China and other booming Asian economies even if Washington overturns its decision to block a pipeline that would have sent more Canadian crude to the United States.
Speaking ahead of Canada's most high-powered trade mission to Beijing for almost 15 years, Prime Minister Stephen Harper told Reuters that Canada must focus on markets that are growing, regardless of the fate of the Keystone XL pipeline, which is proposed to carry crude from the Alberta oil sands to Texas refineries.

Brent steady near $116 on cold snap, Iran sanctions
SINGAPORE, Feb 7 (Reuters) - Brent futures held steady near $116, after settling at a six-month high in the previous session, due to a cold spell in Europe and supply concerns from the Middle East, while fears Europe's debt crisis was worsening weighed on the market.
"The geopolitical events surrounding Iran and the Middle East and the severe cold weather sweeping across Europe are providing support for Brent," said Victor Shum, senior partner at oil consultancy Purvin & Gertz. "We continue to see more upside risks for oil, but Europe's debt crisis will weigh."

Aluminum Over Copper for Wires and Cables Helps Rusal, Alcoa: Commodities (Source: Bloomberg)
Copper has climbed to almost four times the price of aluminum, a record ratio that’s accelerating a switch by manufacturers to using the cheaper metal in electric cables and wires, a United Co. Rusal executive said. Demand for copper is shrinking by about 400,000 tons a year through substitution, or 2 percent of global use, according to Oleg Mukhamedshin, deputy chief executive officer of Rusal, the world’s largest aluminum producer, who cited market data the company uses in its forecasts. “More than half of this loss is to aluminum,” Mukhamedshin said in an interview in Moscow. “With copper prices at a record, further substitution is expected.”

China steel profits to weaken in 2012 on low demand -industry ministry
BEIJING, Feb 7 (Reuters) - Low demand and higher costs are expected to further erode profits in the Chinese steel sector in 2012, China industry ministry spokesman Zhu Hongren said on Tuesday.
He said many big steel enterprises suffered losses in the second half of last year, and the situation was unlikely to improve in 2012.    

China steel output slips 1.3 pct in mid-Jan - CISA
SHANGHAI, Feb 6 (Reuters) - China produced 1.669 million tonnes of crude steel per day in the Jan. 11-20 period, down 1.3 percent compared with the previous 10 days, according to data issued by the China Iron and Steel Association on Monday.
Production normally drops in January as construction activity in northern China slow down for the winter.  

METALS-Copper eases as China buyers out for the count
SHANGHAI, Feb 7 (Reuters) - London copper slipped on Tuesday on sluggish post-holiday purchases from top consumer China but investors betting on a bailout deal for Greece, and growing hopes of a global economic recovery, buttressed prices.
Three-month copper on the London Metal Exchange  fell 0.37 percent to $8,462.75 a tonne by 0503 GMT, clawing back some losses from the previous session when it slipped by almost one percent. Copper hit a one week-high of $8,598.50 on Friday and rose for the fourth consecutive week last week.    

PRECIOUS-Gold steady; traders watch Greece developments
SINGAPORE, Feb 7 (Reuters) - Gold held steady on Tuesday, as investors remain focused on the development in Greece's struggle with its debt crisis after Athens delayed its decision on accepting the terms of a new bailout.
Spot gold  was little changed at $1,718.59 an ounce by 0041 GMT, after touching a 1-1/2-week low of $1,711.29 in the previous session.

20120208 0940 Soy Oil & Palm Oil Related News.

Malaysia issues tax free palm export quotas
By Niluksi Koswanage
Feb 5 (Reuters) - Malaysia has issued this year's tax-free crude palm oil export quotas of 3 million tonnes after weeks of delay, sources said on Sunday, ending speculation it would scrap the quota to help its refiners compete with Indonesian rivals.  Sources with direct knowledge of government plans said some palm oil firms like IOI Corp and state run plantation agency FELDA received their quotas last week. The total quotas account for 15.5 percent of projected output this year in Malaysia, the No.2 producer.  The move ends weeks of talk that Malaysia would scrap the quota, which has tightened regional supply for its refiners after Indonesia raised its export tax for the crude grade to jump-start its own processing industry.  Malaysian refiners now struggle to compete against Indonesian rivals who enjoy better margins, with growing national output and refined palm oil export taxes that were slashed last year to half that of the crude grade.  "The refiners have not been forgotten. The government is looking at providing incentives to refiners to encourage them to go further downstream and produce higher value products compared to Indonesia," a government source said.  "The incentives will be done via special funding from the government. There will be an announcement at the end of this month," added the source.  Local media said last week that the government would scrap the duty-free export quota for crude palm oil while maintaining 23 percent export tax for the grade to safeguard the refining industry. Malaysia does not tax refined palm oil exports.  SPOTLIGHT ON EXPORT QUOTAS  The 2012 tax-free export quota for crude palm oil is less than the 3.6 million tonnes shipped out without any tariffs to Malaysian-owned refiners in Europe and Asia.  As in the past, the government has an option to increase the quota to meet the demands of the licence holders, though that might not happen this year due to slower imports from Indonesia, the sources said.  Plantations holding export licences say the delay by the government to issue quotas slowed shipments in January, putting their businesses and long existing contracts at risk.  Cargo surveyor Societe Generale de Surveillance reported a 13 percent drop in Malaysia's January exports from a month ago. Crude palm oil shipments alone slumped 56 percent.  Shipments of refined, bleached and deodorised palm olein -- used in cooking oil -- fell just 6.4 percent as there was enough crude palm oil supply in Malaysia for refiners to process even though some demand had shifted to Indonesia.  Refiners say the delay in issuing export quota helped to curb rises in domestic price in January. They also say the quota system is not transparent and is subject to abuse, with licence holders offering tax-free crude palm oil to domestic refineries -- accusations planters deny.  "It is election year and government wants to keep firms like FELDA happy as it handles a lot of local farmers who need to offload their crude palm oil," said a Malaysian refiner in Kuala Lumpur.  "The incentives the government promises may not even amount to much; we will have to wait and see. Or maybe we should just look at shifting some of our operations to Indonesia or having more joint ventures with Indonesian firms," he added. (Reporting by Niluksi Koswanage; Editing by Will Waterman)


Palm oil inventory in Malaysia probably declined to a five-month low in January after production fell for a third month, according to a Bloomberg News survey. Stockpiles fell 2.4% to 1.99 m tons, dropping below the 2 m-mark for the first time since August, according to the median estimate in a survey of three analysts and two plantation companies. Inventories were 1.42m tons a year earlier, according to the Malaysian Palm Oil Board, which is scheduled to publish its estimates on Feb. 10. (Bloomberg)


Soybeans (Source: CME)
US soybean futures ended slightly lower, with prices hovering near unchanged levels for most of the day. Positioning ahead of Thursday's USDA reports after prices rallied for five straight trading days produced a choppy atmosphere, analysts say. Beneficial rains in South America and stability in the cash market applied pressure to prices, while declines in the US dollar and general strength in broader commodity markets provided offsetting support, analysts say. CBOT March soybeans ended down 1c at $12.32/bushel.

Soybean Meal/Oil (Source: CME)
Soy product futures end mixed, with soyoil continuing to gain value in the crush vs soymeal. Traders are unwinding long meal/short soyoil spreads, consolidating positions on fears of slower meal demand amid poor margins for livestock and South American rains expected stabilize crop yields there, analysts say. CBOT March soymeal ended down $2.10 at $325.40/short ton; March soyoil ended up 0.01c to 52.17c/pound.

India's Jan oilmeal exports down 14.23 pct y/y- trade body
Feb 7 (Reuters) - India's oilmeal exports fell 14.23 percent in January to 549,716 tonnes, a top trade body said on Tuesday, which analysts said was primarily due to a ban on the country's oilmeal imports by China.
Soymeal exports, which account for bulk of India's oilmeal sales, were at 474,993 tonnes in January, down 17.39 percent from a year ago, the Solvent Extractors' Association of India said in a statement on Tuesday.

Drought eats into Brazil's 2011/12 soy crop-Celeres
SAO PAULO, Feb 6 (Reuters) - Brazil's 2011/12 soybean crop forecast fell to 72.04 million tonnes from 74.4 million tonnes in early January, as the effects of a prolonged dry spell plays out on the world's second biggest soy crop, grain analysts Celeres said on Monday.
Brazil harvested a record 74.9 million tonnes of soy last season.

Argentine soy crop seen at least 47 mln T-source
BUENOS AIRES, Feb 6 (Reuters) - Argentina's 2011/12 soy harvest will be at least 47 million tonnes while corn will come in at no less that 22 million tonnes, a government official who asked not to be identified said on Monday.
A drought in December and early January chopped crop expectations in Argentina, which is the world's No. 2 corn exporting and No. 3 supplier of soybeans. Original unofficial estimates were as high as 30 million tonnes for 2011/12 corn and 52.7 million tonnes for soybeans.

China eyes U.S. soy as drought shrivels LatAm crop
SINGAPORE/BEIJING, Feb 6 (Reuters) - China, the world's biggest food shopper, is likely to buy more U.S. soybeans this quarter, as a withering drought is expected to cut the South American harvest, pushing soy prices up to fresh highs.
Benchmark Chicago soy  has risen for three weeks on the relentless southern hemisphere summer, and analysts say prices could head higher, with U.S. stockpiles seen shrinking as China locks in supplies after the Lunar New Year break.