Tuesday, March 6, 2012

20120306 1810 FCPO EOD Daily Chart Study.

FCPO closed : 3242, changed : -4 points, volume : higher.
Bollinger band reading : pullback correction upside biased.
MACD Histrogram : falling lower, buyer reducing exposure.
Support : 3200, 3150, 3100, 3070 level.
Resistance : 3250, 3270, 3300, 3350 level.
Comment :
FCPO closed marginally lower with improved volume changed hand. Soy oil price currently swing betwwen gains and losses after overnight closed recorded loss while crude oil price currently falling lower.
FCPO price traded little lower as traders decided to close position maintain sideline ahead of tomorrow crucial palm oil conference outlook report.
Technicla study still suggesting a pullback correction upside biased market development testing support near middle Bollinger band level with MACD indicator having negative cross down today.
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.

201203069 1734 FKLI EOD Daily Chart Study.

FKLI closed : 1582.5 changed : -10.5 points, volume : higher.
Bollinger band reading : pullback correction upside biased.
MACD Histrogram : turned downward, buyer lock in profit.
Support : 1580, 1570, 1565, 1550 level.
Resistance : 1590, 1600, 1610, 1620 level.
Comment :
FKLI closed recorded loss with increasing volume participation doing about 7.5 points discount compare to cash market that closed nearly unchanged. Overnight U.S. markets closed marginally lower and today Asia markets ended in loss while European markets currently trading lower.
China lower economic growth target, slower than estimates manufacturing and services in the euro area continue haunting market to trade lower plus markets awaits Greece debt-swap deal deadline near.
Daily chart study revised to calling a pullback correction upside biased market development.
When to buy : buy at support or weakness with quick cut loss and profit target.
When to sell : sell at resistance or strength with quick cut loss and profit target.

20120306 1700 Regional Markets EOD Daily Chart Study.

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

20120306 1548 Global Market & Commodities Related News.

Shares, growth assets hit by economy worries
TOKYO, March 6 (Reuters) - Asian shares and other growth-linked assets fell as slowing economies in China and Europe and  tension over Iran dampened sentiment, prompting investors to take profits from recent rallies that had been driven by ample liquidity.
"I'm seeing this as a significant correction after a strong rally at the beginning of the year," said Greg Gibbs, strategist at RBS in Sydney.

U.S. grains slip, profit-taking after rally
SYDNEY, March 6 (Reuters) - U.S. grains were lower in early trade as traders took profits on soy's recent rally and as markets await a U.S. government crop report on Friday.

Australia says on track for bumper sugar and cotton output
CANBERRA, MARCH 6 - Australia is on track for bumper production of sugar, cotton and livestock this summer despite heavy rains causing flooding in some key producing areas of Queensland and New South Wales.
"The effect (from floods) on total cotton production is not expected to be substantial," the latest Australian Bureau of Agricultural and Resource Economics and Sciences (ABARES) report said.
Brazil corn to hit record despite drought -Celeres
SAO PAULO, March 5 (Reuters) - Brazil's 2011/12 corn harvest should turn out 60.4 million tonnes, local analyst Celeres said on Monday, trimming its view slightly from the 60.58 million tonnes it forecast in February.
Analyst estimates for corn had been slashed recently after a harsh dry spell destroyed some of the corn in top producer Parana state. Many forecasts then swung higher on expectations the winter crop, one of two annual harvests, would be bigger than previously thought.
Brazil's soy crop slashed as drought weighs on data
SAO PAULO, March 5 (Reuters) - Drought over Brazil's main southern grain states this season pushed down harvest and export
estimates on Monday for the world's second biggest soybean crop.
The fresh downgrades in the leading South American soy crop may give further support to Chicago soybean futures  which have been on a three-month tear, rising 21 percent since hitting a 14-month low mid-December.
Record US corn crop to cool red-hot prices-FAPRI
WASHINGTON, March 5 (Reuters) - U.S. farmers will harvest a record corn crop this year, which will rebuild stockpiles and bring down prices, a University of Missouri think tank projected in a report on Monday that came in 2.5 percent lower than the most recent U.S. government projection.
The Food and Agricultural Policy Research Center, or FAPRI, projected a corn crop of 13.916 billion bushels, 6 percent larger than the record set in 2009, based on the second-largest plantings since World War Two.

Singapore's Olam sees crude support for palm
KUALA LUMPUR, March 6 (Reuters) - Firm crude oil may support benchmark palm oil prices this year, Singapore commodities firm
Olam International Ltd  said on Tuesday, while the demand outlook in top buyers China and India is uncertain.
Prices of the edible oil, used in products such as food, cosmetics and biofuels, will trade in a range of 3,000 to 3,300 ringgit ($990-$1,100) a tonne in 2012, Vasanth Subramanian, senior vice president and head of the company's palm division, told Reuters.
Thai rubber intervention stretches populism thin
SINGAPORE/BANGKOK, March 5 (Reuters) - A populist gesture by Thailand's government to prop up rubber prices could backfire by scaring off buyers and causing a buildup of stocks as rubber output rises this year.
Not content with a multi-billion dollar rice intervention scheme, the government of the world's largest rubber producer told farmers it would also buy nearly 7 percent of the country's annual output this quarter.

Rains seen helping Ivorian mid-crop cocoa-farmers
ABIDJAN, March 5 (Reuters) - A spell of good rainfall mixed with sunshine last week in most of Ivory Coast's cocoa regions may provide adequate growing conditions for its April-September mid-crop harvest, farmers and analysts said on Monday.
The development of the mid-crop in Ivory Coast, the world's top cocoa producer, is closely watched by markets after a long drought, which weakened cocoa trees and lowered expectations in December and January.

Brent rises near $124 on Iran supply worries
SINGAPORE, March 6 (Reuters) - Brent crude climbed to nearly $124 as fears of supply disruptions from Iran and unresolved tensions over its nuclear program outweighed concerns about demand and slowing global economic growth.
"The supply risk premium to Iran is supporting prices, but the main volatility is from the demand side," said Jeremy Friesen, a commodity strategist at Societe Generale.

Iraq oil output over 3 mln bpd; first time in decades
BAGHDAD, March 5 (Reuters) - Iraq's oil production has risen above 3 million barrels per day for the first time in more than three decades, it announced on Monday, and said it will sharply increase exports with a major new floating oil terminal beginning operations in three days.
"While I am talking to you today, the Iraqi oil production has exceeded 3 million barrels per day," Deputy Prime Minister Hussein al-Shahristani told a conference in Baghdad.

Iron Ore-China steel snaps 5-day rise after growth goal cut
SINGAPORE, March 5 (Reuters) - Benchmark China steel futures fell on Monday, snapping a five-day climb as investors worried about the demand outlook after Beijing cut its 2012 growth target to 7.5 percent to give the economy more room to slow if needed.
Chinese Premier Wen Jiabao dropped the annual growth target from the 8 percent set in the previous eight years, citing the need to take a cautious and flexible approach and to keep prices stable.

Jiangxi Copper sees China demand up 7 pct in 2012
BEIJING, March 5 (Reuters) - Jiangxi Copper , China's top copper producer, expects market fundamentals for the red metal to remain good this year, its chairman said on Monday.
"China's copper market fundamentals will remain healthy, which will support copper prices," Chairman Li Yihuang told reporters on the sidelines of the National People's Congress, China's parliament, adding that he expects copper demand in China to rise about 7 percent during 2012.

China steel output growth seen at 4 pct in 2012 -Shougang chairman
BEIJING, March 6 (Reuters) - China is likely to see 4 percent growth in crude steel output in 2012, Zhu Jimin, chairman of Shougang Group, one of China's leading steel mills, said on the sidelines of the National People's Congress on Tuesday.
China produced 683 million tonnes of crude steel in 2011, up 8.9 percent from the previous year, but the sector has been concerned about dwindling demand growth from key steel-using sectors such as construction and automobiles.

LME copper clings to gains on China hopes
SINGAPORE, MarchLME copper drops for 3rd day on China demand view
SINGAPORE, March 6 (Reuters) - London copper futures fell for a third straight day underlining caution among investors worried a slower growth forecast in China may curb demand from the world's biggest consumer of the industrial metal.
If you're bullish, a similar volume can come from the restocking side. But I'm cautious in the short run because the government really doesn't want the economy to accelerate."

Gold steadies, China growth worry weighs
SINGAPORE, March 6 (Reuters) - Gold steadied after falling 1 percent in the previous session as China, viewed by many as the engine of the global economy, cut its economic growth targets, but cheaper prices were expected to attract more buying from jewellers in Asia.  
Spot gold  hardly moved at $1,705.85 an ounce by 0008 GMT --  off a 1-month low at $1,687.99 struck in end-February. Bullion hit a record around $1,920 last September.  U.S. gold for April delivery  added 0.18 percent at  $1,707.00 an ounce.

Gold holds around $1,700; China growth worry weighs
SINGAPORE, March 6 (Reuters) - Gold held around $1,700 an ounce, after falling in the previous session as China, widely seen as the engine of the global economy, cut its economic growth targets, but cheaper prices could attract more buying from jewellers in Asia.
"A lot of gold investors are still affected by the large sell-off last week. Many are looking at the technical charts, where gold may come down further before it goes up," said Lynette Tan, an analyst with Phillip Futures in Singapore.

LME copper drops for 3rd day on China demand view
SINGAPORE, March 6 (Reuters) - London copper futures fell for a third straight day, underlining caution among investors worried a slower growth forecast in China may curb demand from the world's biggest consumer of the industrial metal.
"If you're bullish, a similar volume can come from the restocking side. But I'm cautious in the short run because the government really doesn't want the economy to accelerate."

20120305 1204 Global Market & Commodities Related News.

GLOBAL MARKETS-Shares, growth assets weighed by economy worries
TOKYO, March 6 (Reuters) - Asian shares and growth-linked currencies were under pressure on Tuesday as slowing economies in China and Europe and tension over Iran dampened sentiment, prompting investors to take profits from recent rallies that had been driven by ample liquidity.
"I'm seeing this as a significant correction after a strong rally at the beginning of the year," said Greg Gibbs, strategist at RBS in Sydney.

COMMODITIES-Metals fall, oil gains capped as China cuts growth
NEW YORK, March 5 (Reuters) - Most commodities fell on Monday, with copper and silver dropping steeply after top buyer China cut its economic growth target, a move that also limited gains for oil on possible disruptions to supplies from Iran.
"With China reducing the expected growth rate, the concern is there is the possibility of a bigger downside," said Kate Warne, investment strategist at Edward Jones in St. Louis.

Texas: Soon to be a Canadian crude export hub?
--Robert Campbell is a Reuters market analyst. The views expressed are his own--
NEW YORK, March 5 (Reuters) - Canadian crude oil will soon be reaching the U.S. Gulf Coast in large quantities, an event with significant ramifications for the oil market, not the least being the possibility of crude oil exports from Texas for the first time in decades.
Although U.S. law generally prohibits the export of domestically produced crude oil, current regulations allow the re-export of foreign crude oil provided it has not previously been mixed with U.S. crude.

Oil firms on Iran fears, growth worry curbs gains
NEW YORK, March 5 (Reuters) - Oil prices edged up on Monday in tug-of-war trading as supply risks and tensions over Iran's nuclear program provided support, but concerns about global economic growth limited gains.
"The geopolitical risk factor is putting a floor under (the price)," said Michael Hewson, senior market analyst at CMC.

Iraq oil output over 3 mln bpd; first time in decades
BAGHDAD, March 5 (Reuters) - Iraq's oil production has risen above 3 million barrels per day for the first time in more than three decades, it announced on Monday, and said it will sharply increase exports with a major new floating oil terminal beginning operations in three days.
"While I am talking to you today, the Iraqi oil production has exceeded 3 million barrels per day," Deputy Prime Minister Hussein al-Shahristani told a conference in Baghdad.

US natgas futures end down 5 pct, break chart support
NEW YORK, March 5 (Reuters) - U.S. natural gas futures ended down sharply on Monday, with mild late-winter weather and record-high supplies driving the front-month contract below technical support.
"It looked like a bottom had been forming -- we've been moving sideways for weeks -- but now it looks like we're seeing a breakdown," said Richard Ross at Auerbach Grayson in New York.

Euro Coal-Apr S.African trades twice at $103.80/T
LONDON, March 5 (Reuters) - Prompt physical coal prices were steady on Monday despite a rise in oil prices.
"Short-term the potential for coal prices to recover is limited, there are high inventories everywhere," said Emmanuel Fages, Paris-based analyst with Societe Generale.

S.Korea takes 40 pct stake in UAE oilfields
SEOUL/DUBAI, March 5 (Reuters) - A Korea National Oil Corporation (KNOC)-led consortium has secured South Korea's first oil production assets in the United Arab Emirates (UAE), the Korean government said on Monday.
Korea has finalised a deal with Abu Dhabi National Oil Co. (ADNOC) to take a 40 percent stake in two onshore and one offshore oil drilling areas, as part of a wider push by oil import dependent Asian countries to secure upstream assets.

Russia refused China request for extra crude-sources
MOSCOW, March 5 (Reuters) - Russia, the world's top crude producer, rejected a Chinese request for more Siberian pipeline oil, saying the link is already pumping at full capacity and additional volumes are not available, two state energy industry sources told Reuters.
Russia started the landmark crude deliveries to China through the first stage of the East Siberia-Pacific Ocean pipeline at a pace of 300,000 barrels per year on Jan. 1 2011. Last week, Moscow and Beijing settled a dispute over transportation tariffs, which threatened the supply.

Oil creeps toward top of Asia's economic worry list
SYDNEY, March 6 (Reuters) - High oil prices are fast replacing Europe as the biggest danger to growth in Asia, threatening to smother consumer demand while taking a knife to exports and reigniting inflation.
Brent crude topping $128 a barrel is also a headache for central banks as it makes it harder to use easy monetary policy to cushion growth.

20120306 1018 Malaysia Corporate Related News.

Foreign funds purchased a net RM1.3bn (US$431m) of Malaysian shares in Feb for the fifth straight month, according to data on the Kuala Lumpur stock exchange’s website. They bought RM200m of stocks in Jan, RM800m in Dec 2011, RM700m in Nov 2011 and RM1.5bn in Oct 2011. (BT)

With work on the mass rapid transit system’s (MRT) first line getting into gear, MRT Corp Sdn Bhd is beginning to draw up plans for the next two lines. Its CEO Datuk Azhar Abdul Hamid said the priority now is to prepare proposals for the second and third MRT lines by the end of the year. MRT Corp expects to award most of the 19 construction packages for the Sungai Buloh-Kajang line by the end of the year, having already awarded two packages. The award of the tunneling package could be firmed up and announced by Apr or May, he said. (Financial Daily)

MRT Corp is beginning to draw up plans for the next two MRT lines. CEO Datuk Azhar Abdul Hamid said the priority now is to prepare proposals for the second and third MRT lines by end 2012. External consultants will be appointed to draw up proposals for the two alignments and submit to the Land Public Transport Commission (SPAD). MRT Corp is looking to carry out the planning as quickly as possible. "Untill and unless we firm this up, the certainty is not there." he said. The second MRT line is slated to be a circle line serving the inner city. The third line will serve the northwest and southwest regions outside KL. The alignments have not been finalised. On the MRT SBK line, MRT Corp expects to award most of the 19 packages by end 2012. Two packages was awarded so far. Award of the tunnelling package could be firmed up by Apr/May 12, he said. (Financial Daily)

Petroliam Nasional Bhd (Petronas) has proposed a pricing mechanism for natural gas once the regasification terminal in Melaka comes into operation in Aug. “We have sat down with three deputy ministers a few weeks ago, and we proposed a review of the formula. It is now being brought to the Economic Council. So, we are waiting for that,” said president and CEO Datuk Shamsul Azhar Abbas. The terminal will allow Petronas to import gas to make up for the current shortage. A pricing mechanism is necessary as currently Petronas’ supply of gas is heavily subsidised. Under the government’s subsidy rationalisation scheme, natural gas prices would go up by RM3 per mmBtu every six months. This began with a first hike last Jun. The second increase, due last Dec, has not been implemented. Each RM3 increase is worth about RM1.7bn-1.8bn to Petronas, he said. (Financial Daily)

Petroliam Nasional Bhd (Petronas) has reiterated that it will not continue selling subsidised gas to Tenaga Nasional Bhd (TNB) for electricity generation this year. Its president and chief executive, Datuk Shamsul Azhar Abbas said the offer was supposed to be a "one-off" affair and the government should not pay for any subsidy on gas. "Never had we mentioned in the past that its going to be continuous handout to TNB...It was supposed to be one-off, because we pity them as they don't have enough cash at that time. "As a member of the economic council, we have volunteered to help them out and the government has also volunteered to play its part as well,". Currently, Petronas is still waiting to get feedback from Putrajaya on its offer to foot a third of the cost to supply gas to TNB in order to help the consumers. Shamsul Azhar said that for every RM3.00 subsidy, it would cost the group some RM1.7bn. Shamsul Azhair said that the shortage of natural gas will come to an end when the regassification terminal in Malacca comes online in July or August this year, which would allow imported LNG to be introduced to peninsular Malaysia. He stressed, however, that output from the plant will be at market prices. (Bernama, Malaysian Insider)

Petroliam Nasional records RM55.6bn profit
Petroliam Nasional (Petronas) posted a 10.8% growth in net profit for the nine months ended 31 Dec 2011, helped by higher margins and favourable oil prices, but predicted a "difficult and challenging" this year. President and chief executive officer Datuk Shamsul Azhar Abbas said the difficult year ahead will be mainly due to the decline in global fuel demand, production as well as lower crude oil prices. Petronas expects a dip in production this year, in the range of a single-digit %, and sees a flat output growth this year. (BT)

Score gets RM2bn investments
Two South Korean companies will invest a combined USD650m (RM1.95bn) in Samalaju Industrial Park in Bintulu. Dongbu Metal Co Ltd and Asia Cement Co Ltd are among the latest foreign investors in Sarawak Corridor of Renewable Energy (Score). Sarawak Industrial Development Minister Datuk Amar Awang Tengah Ali Hasan said both Dongbu Metal and Asia Cement were investing in the metallic silicon industry. The two companies are expected to start construction of their manufacturing facilities soon. (StarBiz)

Tenaga Nasional Bhd (TNB) is hopeful that the charges to use Petroliam Nasional Bhd's regassification plant in Malacca will be finalised by June in order to bring in liquefied natural gas (LNG) into the country. Gas imports are expected to commence in Malaysia once the regassification terminal is up in August or September, and currently the cost to import is about RM40 per mmbtu (million me-tric British thermal units) in the open market before reaching the terminal TNB will be utilising the Petronas regassification terminal to buy processed LNG. Its president and chief executive officer, Datuk Seri Che Khalib Mohd Noh, said the charges would determine the final price for importing LNG as it will enable TNB to know the additional cost that will be incurred for the regassification terminal and the pipeline cost. "We hope all this will be finalised before June. If not, we won't be able to bring in the gas but the terminal will be already up". (Bernama)

Ananda Krishnan (AK) has sold his power generation assets to 1 Malaysia Development Bhd (1MDB) for RM8.5bn. The sale of Tanjong Energy is part of a corporate overhaul which will also see AK sell his satellite business in the coming weeks to finance a push into gas exploration in Southeast Asia. Rather than own power assets, which are heavily dependent on medium-term state-awarded concessions and power purchase agreements (PPA), AK is betting that there is more money to be made in the supply of gas required to run the power plants. Close associates note that AK has been quietly building his portfolio in the oil and gas business in Indonesia and is eyeing more gas exploration acreage in the region. The executives added that 1MDB has also emerged as the most serious bidder for AK’s satellite business, which is grouped under Measat and is valued at around RM3.9bn. (Singapore Straits Times, Malaysian Insider)

The offer price for SP Setia shares by PNB and Tan Sri Liew Kee Sin is "not fair and not reasonable", according to independent adviser AmInvestment Bank. It said in a special circular to shareholders yesterday that the offer for the warrants of SP Setia by the offerors however is "not fair but reasonable". The special cicular advised shareholders to accept the warrants offer (if there is an absence of any competing take-over offer) but totally reject the shares offer, of which this recommendation was also concurred by the non-interested directors of the company. AmInvestment said the price PNB paid for the acquisition of SP Setia's mother shares even after being adjusted for the bonus issuance are below the estimated RNAV of SP Setia of RM5.00 each. The offer is now unconditional because the offer has received valid acceptances totalling 51.24% of the issued and paid up share capital of SP Setia and 65.03% of its outstanding warrants. (Starbiz)

SP Setia Group unit Setia EcoHill Sdn Bhd has proposed to issue up to RM505m commercial papers and/or medium-term notes with a tenure of seven years. This notes will be issued in two tranches of medium-term notes of up to RM305m under tranche one, and either a commercial paper or medium-term notes issuance of RM200m under tranche two. (Starbiz)

CIMB Group Holdings Bhd has entered into a strategic collaboration agreement with John Keells Stock Brokers (Pvt) Ltd (JKSB) to facilitate trading on the Colombo Stock Exchange. JKSB will also supply CIMB Group with research, which will be disseminated to CIMB’s clientele globally under a CIMB/JKSB co-branded banner. (BT)

Sime Darby Bhd is considering buying the 1,400 MW coal-fired Jimah power plant in Port Dickson, according to reliable sources. The price tag for the deal isn't yet clear, with industry sources speculating anything above RM1.1bn. (StarBiz)

The Roundtable on Sustainable Palm Oil (RSPO) foresees total global sustainable palm oil consumption to double this year from 5% last year, given increasing demand and awareness. Its secretary-general Darrel Webber said with multinationals and world's largest palm oil buyers pledging to source RSPO-certified palm oil by 2015, the consumption trend is expected to increase. (Bernama)

KLIA2 is almost half-way completed and is on schedule, said Malaysia Airports CEO, Tan Sri Bashir Ahmad. The terminal is due for completion in April next year, adding that the project was within the budget. Bashir said MAHB received overwhelming response from interested parties for space at KLIA2. It was reported that MAHB will be making the awards for the 225 outlets at KLIA2 by July this year. (Malaysian Reserve)

The soft launch of the proposed new short-haul brand by Malaysia Airlines is expected to take place next month, its CEO of short-haul, Ignatius Ong said. He said the new airline, which has yet to be named, is expected to be fully operational by the middle of this year. The new airline will be flying entirely on new Boeing 737-800 fleet of aircrafts and would be specifically targeted to meet the needs of Asia’s premium travellers. (Bernama)

Firefly is looking to expand its fleet size by acquiring more aircraft, said CEO Ignatius Ong. However, that hinged on its load factor improving to an average 89% from some 60% to 65% now. In the meantime, Firefly could lease some aircraft. (Star Biz)

LTAT will dilute its shareholding in Boustead Holdings from 60% to 51% by year-end, its chief executive Tan Sri Lodin Wok Kamaruddin said. The move is in line with the Government’s call for government-linked companies to dilute their shareholdings to create liquidity in the market. (Bernama)

Two South Korean companies will invest a combined US$650m in Samalaju Industrial Park in Bintulu. Dongbu Metal and Asia Cement are among the latest foreign investors in Sarawak Corridor of Renewable Energe (Score). The two companies were expected to start construction of their manufacturing facilities soon. (Star Biz)

Affin Holdings Bhd expects its plan to set up Islamic banking operations in China to materialise in the second half of this year. Deputy chairman Tan Sri Lodin Wok Kamaruddin said Affin would collaborate with its shareholder, Hong Kong-based Bank of East Asia Ltd (BEA), to offer Islamic banking products in China. (StarBiz)

Syarikat Prasarana Negara Bhd is to disburse in two months the remaining RM2.5bn worth of four work packages for the Ampang LRT extension. The packages are for the supply of LRT trains, construction of station 12, and supply and management of the access card and engineering procurement and construction contract. Group MD Datuk Shahril Mokhtar said contracts worth RM4.5bn were given out. On financing Prasarana would enter the market to secure another RM4bn via two tranches this year. So far, Prasarana had raised RM3bn via Sukuk. (Financial Daily)

A 3.29% stake comprising 13.36m shares in Silver Bird Group Bhd belonging to managing director Datuk Jackson Tan has been force sold, according to a filing with Bursa Malaysia. His shares were sold over the past four days, since March 1, at between 20.9 sen and 22 sen per share. Along with two others, Tan has been suspended from the company pending an internal investigation into irregularities in the company’s accounts. (Financial Daily)

The Media Shoppe Bhd (TMS) will not participate as a subcontractor for certain portions of a RM85.9m project for the commissioning of an automatic fare collection system for KTM Bhd (KTMB) commuter stations. TMS told Bursa Malaysia that it was not feasible for the loss-making company to undertake the project due to the lack of funding within the required timeframe of delivery. TMS has decided not to accept the letter of award from Hopetech Sdn Bhd, the contractor for the KTMB project. (Starbiz)

Malaysian Rating Corp (MARC) has revised the outlook on Alam Maritim’s Islamic sukuk and Islamic debt ratings to negative, from stable previously. The revised outlook reflects the pressure on Alam’s credit profile arising from significantly weaker earnings and cash flow generation in 2010 and 2011. The rating action affects RM475m of outstanding notes. (Star Biz)

Ivory Properties Group Bhd is expecting approval from the Penang Development Corporation (PDC) this week for its proposed RM10bn "Penang World City" project at Bayan Mutiara. Executive director Murly Manokharan said yesterday the development was expected to incorporate, among others, medical facilities, Grade-A offices and both high-end and affordable housing units. Penang World City, he noted, was expected to be completed in eight years, with work on the first phase commencing at the end of this year. (BT)

Century Software Holdings acquires 100% stake in Centennial Profile SB
Century Software Holdings has acquired two ordinary shares, representing 100% equity interest, in Centennial Profile SB from Ng Ah Poong and Teng Mee Leng for RM2. In an exchange filing yesterday, the company said the acquisition would enable Century Software to create another sustainable revenue pillar which will contribute to the expansion of the group as a whole. The intended principle activity of Centennial Profile SB is to focus on the business performance management solutions, it said. (Malaysian Reserve)

Esthetics International Group to acquire 4 units space in Paya Lebar, Singapore
Esthetics International Group’s wholly-owned subsidiary, EIG Global Pte. Ltd, has proposed to acquire four units space of 5,436 sq ft floor areas in Paya Lebar Square, Singapore from Paya Lebar Development Pte Ltd for SGD9.4m (RM22.6m). In a filing with Bursa Malaysia Securities yesterday, the skincare, health and cosmetics company said the properties shall be used as EIG's corporate office in Singapore. (Malaysian Reserve)

Syarikat Takaful Malaysia: May buy London properties
Syarikat Takaful Malaysia is looking at diversifying its investment portfolio by acquiring properties in London this year. Group MD Datuk Hassan Kamil said the Islamic insurer has RM200m in its war chest. He added that they are scouting for commercial buildings or offices within  a 30km radius of central London.  It is learnt that the company has appointed an adviser to search for properties by the end of this month. (Business Times)

JAKS: Gets RM252m construction job
JAKS Resources has accepted a RM252m contract for the construction of five blocks of 15-storey commercial buildings and four levels of basement carparks in Ara Damansara. JAKS said its subsidiary JAKS Sdn Bhd had accepted the letter of award from KH Chew Architect, on behalf of MNH Global Asset Management Sdn Bhd. Works are to be completed by August 31, 2013. MNH Global is wholly owned by Island Circle Development (M) Sdn Bhd, a major shareholder of JAKS Island Circle Sdn Bhd, which in turn is 51%-owned by JAKS. (StarBiz)

Envair: RM1.5bn oil project boost?
Sources familiar with the matter said the new major shareholder of Envair Holdings is expected to inject and oil and gas project worth as much as US$500m (RM1.5bn) into the company. According to Business Times, the project is located in Eastern Europe. In addition to the oil and gas contract, the board is also expected to announce today a name change for the company to Raya Energy Bhd. (Business Times)

20120306 1018 Global Economic Related News.

Indonesia’s official growth target in 2012could be revised down to 6.5%, from 6.7% previously, said Vice President Boediono. (WSJ)

Indonesia’s National Development Planning Agency (Bappenas) estimates that inflation this year has the potential to exceed 7% if food prices cannot be maintained. (IFT)

The HSBC Services PMI for China improved to 53.9 in Feb from 52.5 in Jan. (Bloomberg)

China pared the nation’s growth target to 7.5% from an 8% goal in place since 2005. Officials will aim for inflation of 4% this year, unchanged from the 2011 goal, according to a speech that Premier Wen Jiabao delivered at the annual meeting of the National People’s Congress. (Bloomberg)

The budget deficit in the Philippines was PP101.5bn (US$2.4bn) in Dec, compared with PP22bn in Nov. The full-year gap was PP197.8bn in 2011, compared with a record PP314.5bn in 2010. Spending surged 43.2% in Dec while revenues grew 6.8%. (Bloomberg)

The Markit Services PMI for India eased to 56.5 in Feb from 58 in Jan. (Markit)

South Korea’s foreign reserves climbed to US$315.8bn in Feb (US$311.34bn in Jan). (Bloomberg)

Indonesia’s National Development Planning Agency (Bappenas) estimates that inflation this year has the potential to exceed 7% if food prices cannot be maintained. (IFT)

Bank Indonesia Governor Darmin Nasution said a rise in the inflation rate as a result of the imminent fuel price hike will not automatically put pressure on the rupiah. (Anatra News)

Bank Indonesia assessed that the recent weakening of rupiah does not affect the performance of exporters. Exporters would benefit from the weakening rupiah. Importers, on the other hand, will have to incur higher cost. (IFT)

Singapore's Purchasing Manager's Index (PMI) for Feb stood at 50.4, up from Jan’s 48.7. A separate PMI for Singapore's electronics sector rose to 51.0 from Jan 50.5 due to continued expansion in domestic and overseas orders. (Reuters)

China Investment Corporation, the country’s US$410bn sovereign wealth fund, received a massive US$30bn injection from the government last year, boosting its investment war chest for European assets. (AFP)

China Securities Regulatory Commission Chairman Guo Shuqing said that China may launch its highly anticipated high-yield bond market in 1H12 to expand credit access to small private firms largely shut out of China's state-dominated financial system. (Reuters)

China’s Ministry of Finance submitted a government work report for the annual full session of the 11th National People's Congress (NPC). Total combined revenue in the draft central and local budgets for 2012 is targeted at Rmb11.63tr. Total expenditures in the draft central and local budgets amount to Rmb12.43tr, up 14.1% yoy. The budgeted deficit is Rmb800bn. China hopes to complete 5m units of low-income housing this year and start construction of another 7m units as part of an effort in improving people's living conditions. China will continue to regulate the real estate market to bring down property prices to a reasonable level Transformation of the mode of development and economic restructuring are the most pressing tasks at present for the Chinese government China will promptly formulate a master plan for reforming the income distribution system in a bid to narrow the widening income gap, according to a government work report China aims to create more than 9 million new jobs in towns and cities this year (Xinhua)

Bank of Japan monetary affairs director general Kazuo Momma reiterated his warning that the strong yen could hurt Japan’s economy by weighing on corporate earnings and sentiment, and told a parliamentary committee that setting too high a price goal would heighten economic uncertainty. (Reuters)

The US non-manufacturing ISM grew to 57.3 in Feb, the fastest pace in a year, from 56.8 in Jan on the back of a gain in new orders and the housing market showing signs of stabilising. Analysts expected the measure to come in at 56. (Bloomberg)

US factory orders fell back 1.0% in Jan (a revised +1.4% in Dec), less than the consensus of a 1.6% decline as weakness was centred in durable goods orders which fell 3.7% (revised from -4.0%). (Bloomberg)

US: Service industries unexpectedly expand to a one-year high
Service industries in the US unexpectedly grew in February at the fastest pace in a year, showing further strength for the biggest part of economy. The Institute for Supply Management’s non-manufacturing index climbed to 57.3 from 56.8 in January, the Tempe, Arizona-based group’s data showed yesterday. Readings above 50 signal expansion, and the median forecast of economists surveyed by Bloomberg News was 56. (Bloomberg)

The Eurozone composite PMI for services and industry fell to 49.3 in Feb (50.4 in Jan), but still above the 48.3 level recorded in Dec, according to Markit. (AFP)

German automaker federation VDA projects the global car market to grow 4% this year, although Europe will lag behind because of the debt crisis. US, China and Japan will continue to see strong growth. (AFP)

Banks’ deposits with the ECB have hit yet another new record with €820.8bn (RM3.28tr) on deposit for 24 hours at the ECB overnight on Fri, beating the previous record set the day before of €776.9bn. (AFP)

The Eurozone sentix investor confidence index rose to -8.2 in Mar (-11.1 in Feb; -21.1 in Jan), the third consecutive month of improvement. Analysts expected an increase to -7.0. (NASDAQ, RTTNews)

20120306 1009 Global Market Related News.

FOREX-Dollar off 9-month high vs yen on profit-taking
SINGAPORE, March 5 (Reuters) - The dollar pulled away from a nine-month high hit on Friday as traders booked profits after the U.S. currency rose nearly 8 percent in about a month.
"There is perhaps a little more room for dollar/yen to go higher in the next few days, with short-term players now going short yen, but we see the upside limited," said Christopher Gothard, head of FX for Brown Brothers Harriman in Hong Kong.

Asian Stocks Swing on Global Outlook (Source: Bloomberg)
Asian stocks swung between gains and losses after U.S. service industries expanded, while euro-area services output fell, increasing uncertainty about the global economic outlook. Samsung Electronics Co. (005930), South Korea’s biggest exporter of consumer electronics, rose 0.7 percent. BHP Billiton Ltd. (BHP), Australia’s biggest mining company lost 2.1 percent after metal prices slid. The MSCI Asia Pacific Index was little changed at 126.88 as of 9:20 a.m. in Tokyo after losing 1 percent yesterday.

Japanese Equities Advance as Yen Weakens, Boosting Outlook for Exporters (Source: Bloomberg)
Japanese stocks advanced after the yen weakened, bolstering the earnings outlook for exporters. Toyota Motor Corp. (7203), Asian’s biggest carmaker, rose 0.8 percent after being rated “outperform” by Credit Suisse Group AG. Bridgestone Corp., the world’s biggest tiremaker, jumped 1.5 percent after saying it will build a plant in Thailand. Kubota Corp., a tractor maker that gets almost a fifth in sales from Asia, lost 1.1 percent after China cut its economic growth target. “With the yen slightly weaker, exporters may lead share buying, but increases will probably be limited,” said Ryuta Otsuka, a strategist at Toyo Securities Co. in Tokyo. “The markets are likely to follow the currency and other Asian stock movements.” The Nikkei 225 Stock Average (NKY) rose 0.3 percent to 9,724.62 as of 9:06 a.m. in Tokyo. The broader Topix Index added 0.2 percent to 834.82, with more than twice as many shares rising as falling.

S&P 500 Has Biggest Two-Day Decline Since January on Global Growth Concern (Source: Bloomberg)
U.S. stocks fell, giving the Standard & Poor’s 500 Index its biggest two-day loss since January, as China cut its economic growth target and orders to American factories decreased for the first time in three months. Commodity (S5MATR), technology and industrial shares dropped the most among 10 groups in the S&P 500. Alcoa (AA) Inc. and Caterpillar Inc. (CAT) fell at least 2.1 percent. Apple Inc. (AAPL) slumped 2.2 percent, snapping a seven-day advance. Bank of America Corp. (BAC) and Citigroup Inc. (C) dropped more than 1.2 percent. International Business Machines Corp. closed above $200 (IBM) on a split-adjusted basis for the first time, after rallying 9.1 percent in 2012. The S&P 500 retreated 0.4 percent to 1,364.33 at 4 p.m. New York time, dropping 0.7 percent in two days. The Dow Jones Industrial Average decreased 14.76 points, or 0.1 percent, to 12,962.81. The Nasdaq Composite Index dropped 0.9 percent to 2,950.48.
About 6.1 billion shares changed hands on U.S. exchanges, or 9 percent below the three-month average. “It’s wise to take a little money off the table,” said David Joy, the Boston-based chief market strategist at Ameriprise Financial Inc. His firm oversees $631 billion. “Some of the easy gains have already been made. We’re back to focusing on the economic fundamentals. China saying that they are targeting 7.5 percent growth raises concern of a hard landing.”

Stocks Drop in Europe as China Cuts Forecast for Growth; Rio Tinto Falls (Source: Bloomberg)
European (SXXP) stocks dropped, snapping two days of gains, as China cut its forecast for economic growth this year and data showed manufacturing and services in the euro area shrank more than estimated. Rio Tinto Group led mining shares lower as copper slid. Salzgitter AG (SZG) sank 5.4 percent amid uncertainty over the steelmaker’s outlook. BP Plc (BP/) advanced 1.6 percent after reaching a $7.8 billion settlement with businesses and individuals harmed by the Gulf of Mexico oil spill in 2010. The Stoxx Europe 600 Index retreated 0.6 percent to 265.56 at the close, paring last week’s 0.9 percent advance. The benchmark measure earlier slid as much as 1 percent. The Stoxx 600 has rallied 8.6 percent this year as U.S. economic reports beat estimates and investors speculated that policy makers will contain the euro region’s sovereign-debt crisis.
“The market is really taking more of a pause for breath after the strong rally that we have seen,” said Edmund Shing, an equity strategist at Barclays Capital in London. “People are actually a little bit less pessimistic on the economic front than late last year, but clearly we would like to see more positive macro data going forward. We don’t expect growth in Europe this year.”

Goldman Sachs’s Asia Unit Swings to 2011 Loss (Source: Bloomberg)
Goldman Sachs Group Inc. (GS) lost money in Asia last year for the first time since 2008 as the Wall Street firm’s stock investments in the region, led by a holding in China’s biggest bank, backfired. A 46 percent decline in Asia revenue compared with 2010 was driven by markdowns on the company’s stakes in public equities, the firm disclosed in its annual 10-K filing with the U.S. Securities and Exchange Commission. The bank lost $103 million in the region, compared with a $2.08 billion profit a year earlier, according to the New York-based company. The figures illustrate how losses in Goldman Sachs’s Investing & Lending unit, which makes so-called principal investments with the company’s own money, can surpass the bank’s revenue from working with clients. Goldman Sachs bankers in Asia won first place among equity underwriters and takeover advisers last year, according to data compiled by Bloomberg.
“Last year was the perfect storm for Goldman in Asia as it was a brutal year for equities in the region,” said Sandy Mehta, chief executive officer of Hong Kong-based Value Investment Principals Ltd.

Orders to U.S. Factories Fell in January for First Time in Three Months (Source: Bloomberg)
Orders to U.S. factories decreased in January for the first time in three months, a sign manufacturing is cooling at the beginning of the year. Bookings (TMNOCHNG) fell 1 percent after a revised 1.4 percent gain in December that was larger than previously estimated, figures from the Commerce Department showed today in Washington. The median of 61 economists’ projections in a Bloomberg News survey called for a 1.5 percent decline. Rising oil prices and the expiration of a tax credit at the end of 2011 that supported business investment represent a risk to American manufacturers. At the same time, the need to rebuild inventories and replace outdated equipment may help keep factories at the forefront of the economic expansion.
“Manufacturing has been the strongest link in this recovery and it continues to grow, but maybe the impact of the sharp rise in energy costs is beginning to take a toll on growth,” Joel Naroff, president of Naroff Economic Advisors Inc. in Holland, Pennsylvania, said before the report. “The big unknown remains oil prices.”

U.S. Service Industries Unexpectedly Expand to a One-Year High: Economy (Source: Bloomberg)
Service industries in the U.S. unexpectedly grew in February at the fastest pace in a year, showing further strength for the biggest part of economy. The Institute for Supply Management’s non-manufacturing index climbed to 57.3 from 56.8 in January, the Tempe, Arizona- based group’s data showed today. Readings above 50 signal expansion, and the median forecast of economists surveyed by Bloomberg News was 56. A sustained pickup in the industries that make up almost 90 percent of the economy would bolster the expansion, creating employment opportunities that will help sustain household demand. At the same, rising gasoline prices represent a risk to a recovery that Federal Reserve Chairman Ben S. Bernanke last week said was “uneven and modest.”
“The momentum that we’ve been generating in the economy is starting to broaden,” said Robert Dye, chief economist at Comerica Inc. in Dallas. “As we get stronger job growth, we’ll see more lift to the economy in the second half of the year.”

China 4% Inflation Target Gives Scope for Relaxing Energy-Price Controls (Source: Bloomberg)
China set a 2012 target for inflation that’s higher than economists’ forecasts, leaving room for fiscal and monetary stimulus and an easing of government controls on the cost of resources such as energy. Premier Wen Jiabao yesterday unveiled a goal of about a 4 percent increase in the consumer price index, the same target as last year. By comparison, analysts at Bank of America Corp. forecast 3.5 percent and those at Goldman Sachs Group Inc. predict 3.1 percent. The gauge rose 5.4 percent in 2011. China is moving to more market-oriented methods of setting prices to spur energy conservation by letting consumers bear a bigger portion of costs. Wen yesterday pledged pre-emptive fine- tuning of economic policy, a shift from a year ago, when his main warning was on inflation, a “tiger” he said would be tough to recapture if allowed free.
The government “wants to push forward energy price reform and wants the room for that to happen,” said Li Wei, a Shanghai-based economist for Standard Chartered Plc (STAN), the U.K. bank that earns most of its profit in Asia. Li forecast 2 percent inflation this year.

Private Investors With 20% of Greek Debt to Join Swap (Source: Bloomberg)
The private investors that so far declared their participation in Greece’s debt restructuring hold about 20 percent of the bonds involved in a swap required for an international bailout. The 12 members of the creditors’ steering committee that said yesterday they would join in the exchange have debt with a face value of at least 40 billion euros ($53 billion), compared with the 206 billion euros of Greek bonds in private hands, according to data compiled by Bloomberg from company reports. The participating firms include some of Greece’s biggest private creditors, including National Bank of Greece SA, Alpha Bank SA (ALPHA), BNP Paribas SA and Commerzbank AG. (CBK) The goal of the swap, which runs until March 8, is to reduce by 53.5 percent the total of privately held Greek debt, helping the country avert an uncontrolled default that could roil financial markets and spur contagion to states such as Portugal.
Each debt holder “must make their own decision whether or not to participate in those offers based on their own particular interests and on the advice and assistance of their own advisers,” the International Institute of Finance said in a statement yesterday.

Europe’s Junk Borrowers Tap U.S. at Record Pace (Source: Bloomberg)
European high-yield companies are tapping the U.S. bond market at a record pace as investors funnel unprecedented amounts of cash into dollar-denominated junk-debt funds and the sovereign crisis restricts bank lending in the region. Issuers led by Germany’s Fresenius Medical Care AG (FME) have sold $8.8 billion of the debt in dollars this year, following $16.4 billion in all of 2011, according to Morgan Stanley. The portion of European speculative-grade offerings sold in dollars has soared to 44 percent this year, up from 31 percent in 2011 and double the rate in 2010. Borrowers in Europe, where politicians are struggling to contain the fiscal contagion that led to the bailouts of Greece, Portugal and Ireland, are seeking lower financing costs by marketing to investors in the U.S. Relative yields on European junk-rated debt average 222 basis points more than on similarly rated U.S. bonds, compared with 77 in 2011, Bank of America Merrill Lynch index data show.
“It stands to reason if you are a European issuer, you are going to look opportunistically to access the most favorable market,” William Hughes, the head of North American leveraged syndicate at Citigroup Inc., said in a telephone interview. “For many issuers that decision has led them to dollar denominated high-yield bonds and leveraged loans.”

Greek Debt Swap Deadline Will Test Europe Efforts to Close Crisis Chapter (Source: Bloomberg)
The European Union faces a first test in its attempt to turn the page on the two-year debt crisis when Greece’s private creditors decide this week whether to sign off on the biggest sovereign-debt restructuring in history. The success of the 106 billion-euro ($140 billion) debt swap, confirmed on the eve of last week’s European Union summit, depends on how many investors agree to the writedown by the March 8 deadline. Euro-area finance ministers will hold a teleconference on March 9 to review the deal’s outcome. “The European crisis is not quite over yet,” Erik Nielsen, chief global economist at UniCredit SpA in London, wrote in a note to clients yesterday. He said enough creditors will probably participate in the writedown to avoid triggering so-called collective action clauses, which could be used by Greece to compel investors to participate and roil markets by triggering credit-default swap insurance contracts.
The Greek government has set a 75 percent participation rate as a threshold for proceeding with the transaction, in which investors will forgive 53.5 percent of their principal and exchange their remaining holdings for new Greek government bonds and notes from the European Financial Stability Facility. Euro- area finance ministers last week authorized the EFSF to issue bonds for the swap.

Leverage Dropping Most Since 2008 Leads Best Emerging Rally: Turkey Credit (Source: Bloomberg)
Turkey is reducing government debt this year by the most since 2008, spurring the best bond rally in the emerging markets. The Treasury plans to lower debt 16.5 percent by stepping up repayments, according to its website. Lira-denominated bond yields have plunged 175 basis points in 2012, the most among emerging markets, data compiled by Bloomberg show. The extra yield on Turkish dollar bonds over similar-maturity U.S. notes fell to a three-month low of 322 basis points on March 1, JPMorgan Chase & Co.’s EMBI Global index shows. The second-fastest growth after China among major economies allowed Prime Minister Recep Tayyip Erdogan to cut debt to 39.8 percent of gross domestic product last year from almost double that when his party came to power a decade ago. While the nation’s $284.9 billion market for government debt is almost double the size of Russia’s, Turkey’s indebtedness relative to its GDP is below that of Brazil, India, Poland and Hungary, according to data compiled by Bloomberg.
“It’s one of Turkey’s strengths, as debt relative to GDP has come down a long way in the last 10 years,” said Kieran Curtis, a London-based fund manager who oversees about $3.5 billion in emerging-market assets at Aviva Investors Ltd. (MORAISS) “Fiscal policy is always going to be an important determinant of bond yields in a country like Turkey.”

20120306 1008 Soy Oil & Palm Oil Related News.

Palm Oil Seen Rising 8% to Year High as Drought Wilts South American Crops (Source: Bloomberg)
Palm oil may advance 7.8 percent by mid-April to the highest level in a year as cooking-oil demand outstrips supply, according to TransGraph Consulting Pvt. Chairman Nagaraj Meda, who has forecast prices for 13 years. Stockpiles of soybeans, crushed to make a substitute oil, will decline after dry weather hurt crops in Brazil and Argentina, said Meda, who’s also managing director of Hyderabad, India-based TransGraph, an industry adviser. Palm oil may climb to 3,500 ringgit ($1,159) from 3,246 ringgit now, before sliding to 2,800 ringgit after July as prospects for the U.S. soybean harvest become clearer, he said. Palm oil, used in everything from candy bars to biofuel, rallied last month by the most since December 2010 after drought cut South American crops. Meda’s forecast for a near-term gain is less bullish than a prediction from industry veteran Dorab Mistry, who’s set to update his outlook at a conference this week in Malaysia, the second-largest producer.
There was positive price momentum following damage to the soybean crop, Meda said in a phone interview on March 1. Economic-stimulus packages in developed nations including Europe had also helped to boost demand, he said.

Soybeans (Source: CME)
US soybean prices retreat, ending lower for the first time in 11 trading days as traders take profits. Prices have been on an escalator for the past six weeks on a drought-plagued Brazil crop and optimism about growing US export demand. But with no fresh supportive news on either front today, profit-taking weighed. Traders also note unwinding of long soybean/short corn spread trades. Analysts say uncertainty ahead of Friday's USDA report could limit upside in grains and soy this week. CBOT May soybeans end down 8c to $13.25 a bushel.

Soybean Meal/Oil (Source: CME)
May soybean oil ends down 0.35c to 53.73c/lb. May soybean meal ends down $0.90 to $358.20 per short ton.

Palm oil eases ahead of key price outlook meeting
KUALA LUMPUR, March 5 (Reuters) - Malaysian crude palm oil futures slipped as traders await a key price outlook meeting in Kuala Lumpur this week at which analysts are expected to paint a bullish picture for the sector.  Prices rose more than six percent in February alone, setting the stage for upbeat price outlooks at the Bursa Malaysia conference, given strong demand from India and China and prospects of lower soyoil supply from drought hit South America.
 "Trading interest is dull as market players are waiting for cues from the Bursa Malaysia palm oil conference," said a trader with a foreign commodities brokerage. "Also, most external markets are quiet after huge moves last week."

China 2012 rapeseed output 13-14 mln tonnes-COFCO chairman
BEIJING, March 4 (Reuters) - China's rapeseed output for 2012 is expected to be between 13 and 14 million tonnes, the chairman of the nation's top state-owned grains trader COFCO said on Sunday, marking a slight increase from its estimated 2011/12 harvest.
But Ning Gaoning said China's corn imports for 2012 are likely to hold steady or even slip from a year ago due to a bumper harvest at home, while soybean imports should rise further this year.

Informa cuts Brazil soy forecast on dry weather
CHICAGO, March 2 (Reuters) - Informa Economics lowered its forecast of Brazil's 2011/12 soybean crop to 68 million tonnes from its previous estimate of 70 million, trade sources said on Friday.
Informa officials had no comment on the numbers, but in a report to clients the private analytical firm attributed the cuts to warm and dry weather in southern Brazil that stressed soybean crops during pod setting, a key phase of growth.

India's palm imports to rise as rapeseed output slumps
KUALA LUMPUR, March 5 (Reuters) - Palm imports by the world's top buyer India will rise about 8 percent in the current marketing year ending October 2012, an industry official said on Monday, adding that a consortium of Indian companies were looking to buy land in South America for soybean production.
A slump in domestic vegetable oil crops and robust demand, will buoy palm oil buys this year, B.V. Mehta, executive director of the Solvent Extractors' Association of India, told Reuters.

Indonesia refining advantage to dominate palm oil meeting
KUALA LUMPUR, March 2 (Reuters) - Top palm producer Indonesia's growing refining advantage over No. 2 supplier Malaysia will dominate an annual gathering of the world's palm oil business in Kuala Lumpur next week as traders examine shifts in demand.
Planters, refiners and bankers gather for the Bursa Malaysia Palm Oil Conference from Monday to Wednesday as the market for the tropical oil grows this year at the expense of soyoil, with the South American soy crop damaged by drought.

Plantation: Palm oil consumption to double this year, says RSPO
The Roundtable on Sustainable Palm Oil (RSPO) foresees total global sustainable palm oil consumption to double this year from 5% last year, given  the increasing demand and awareness. Secretary-General Darrel Webber said Certified Sustainable Palm Oil (CSPO) global production would also increase in tandem with the expected consumption upscale. He said, with multinationals and world's largest palm oil buyers pledging to source for RSPO certified palm oil by 2015, the consumption trend has already begun, which is expected to mirror in the increased sustainable palm oil consumption foreseen this year. (Bernama)

KUALA LUMPUR (Dow Jones)--Palm oil prices are likely to receive support in the next few months from firm crude oil prices and demand for vegetable oils from China and India, Vasanth Subramanian, senior vice president of agricultural commodities supplier Olam International Ltd. (O32.SG), said Tuesday. Palm oil will likely trade in a range of MYR3,000-MYR3,300 a metric ton for the next few months, Subramanian said on the sidelines of an industry conference.

20120306 1008 Global Commodities Related News.

China Premier Wen: 2012 Agriculture Spending CNY1.23 Trillion (Source: CME)
China aims to spend CNY1.23 trillion on its agriculture sector this year, Premier Wen Jiabao said in his annual report to the National People's Congress, China's parliament. The targeted spending is a rise of CNY186.8 billion on 2011, he said. The National Development and Reform Commission, China's top economic planner, said Monday it was aiming to keep China's grain output this year at more than 500 million metric tons. China's overall grain harvest last year was a record 571.21 million tons. The economic planner also said it will target cotton output at 6 million tons, sugar crop output at 126 million tons, and oilseed at 32.8 million tons. The meat output target is set at 81 million tons. The NDRC also said China will start stockpiling corn, soybeans, rapeseed, cotton, sugar, sugar and pork "at the proper time."

Speculative Wagers on Crops Reach 5-Mo. High (Source: Bloomberg)
Speculators increased bets on higher agricultural prices to a five-month high on mounting concern that a South American drought will curb supplies of soybeans, corn and sugar at a time of record global demand. A measure of speculative positions across 11 farm goods jumped 26 percent to 607,721 futures and options in the week ended Feb. 28, U.S. Commodity Futures Trading Commission data show. Corn bets increased the most in eight weeks, and sugar holdings climbed to the highest since August. Wagers on higher soybean prices rose to a five-month high. Hedge funds and other speculators are the most bullish on commodities since September as sanctions on Iran over its nuclear program disrupt oil supplies and weather damages crops in South America. Producers were already struggling to keep up with demand from a global population that surpassed 7 billion people last year, with consumption now boosted by signs that economic growth is accelerating.
“Weather and the perception of damages to supply” have pushed prices higher, said Osvaldo Canavosio, the New York-based head of emerging markets and commodities research at Man Investments USA LLC, which manages about $11.2 billion of assets. “There’s been a continuing pattern of the rest of the world outside the U.S. being an important driver of supply-and- demand dynamics.”

Argentina farm forecast seen rosier next season
BUENOS AIRES, March 2 (Reuters) - After back-to-back droughts, Argentine growers could have a record harvest of soybeans and corn next season as the La Nina weather phenomenon makes way for El Nino, one of the country's best-known forecasters said on Friday.
Eduardo Sierra - the University of Buenos Aires climatologist who accurately predicted that drought would stunt crops this season - said Argentina's 2012/13 soy crop could exceed the record 52.7 million tonnes gathered two years ago in another El Nino year.

Corn (Source: CME)
US corn futures end higher, rallying on tight cash markets and technical buying by funds. The rise "is being driven by the cash markets, they're trying to pry corn out of the farmer's hand," says Linn Group analyst Jim Riley. Funds are also buying corn and selling soybeans, a reversal from last week, but corn fundamentals are weak and room for more gains is limited without further fund buying, says Dan Basse, president of AgResource Company. CBOT May corn, the most actively traded, rises 5 3/4c to $6.60 3/4. March corn ends up 7 1/4c at $6.66 1/4, the highest level since September for front-month corn.

Wheat (Source: CME)
US wheat futures end mixed, with CBOT futures falling amid weak fundamentals and giving up some of last week's gains. "Fundamentals in terms of wheat still remain relatively bearish with the world amply supplied," says Dan Basse of AgResource. CBOT March wheat fell 3c to $6.67 3/4c a bushel while KCBT March dropped 5c to $7.05 1/2c and MGEX March rose 3 1/2c to $8.31 1/4.

Rice (Source: CME)
US rice futures end lower amid weak demand. Poor demand, both domestically and for export, has weighed on prices for months, although some traders see a potential rebound thanks to questions about how much rice US farmers will plant this year at low prices. CBOT May rice ends down 16c to $14.34 1/2 per hundredweight.

Soy ends 10-day rally, but still near 5-month top
SINGAPORE, March 5 (Reuters) - U.S. soybeans retreated after a 10-day rally although expectations that export demand will stay strong kept soy near five-month highs, while wheat and corn drifted lower. Soybeans gained more then 5 percent in the two-week run up to Friday, driven by robust demand for U.S. shipments from top importer China. Analysts say strong Chinese demand along with projections of lower output from Brazil should keep the uptrend mostly intact.
"Oilseeds remain the most bullish of the agri-commodities, mainly because of recent downgrades to South American crop prospects and strong demand for U.S. supplies," said Luke Mathews, commodity strategist at Commonwealth Bank of Australia.

Ukraine sunflower harvest seen up, India to buy more oils-trader
KUALA LUMPUR, March 5 (Reuters) - Ukraine, the world's largest sunflower oil exporter, is expected to harvest more than 10.5 million tonnes of the oilseed in the 2011/2012 season as farmers replace damaged winter grains with sunflower seed sowings, a leading trader said on Monday.
That represents up to a 16.7 percent increase in output, raising supply for crushing into edible oils and potentially making cargoes cheaper than competing rapeseed oil, the trader from Indian commodities firm Athena Tradewinds, which handles about 60 percent of the world's sunoil trade.

India has no plans to buy farmland abroad-farm min
NEW DELHI, March 5 (Reuters) - The Indian government has no plans to buy farmland abroad or help private companies do so, Agriculture Minister Sharad Pawar said on Monday, after a local media report said New Delhi was debating the issue.
"There is no government proposal. The ministry has not taken up this proposal," Pawar told reporters.

Australia's 2012/13 wheat output seen down 15.3 pct
SYDNEY/SINGAPORE, March 2 (Reuters) - Australia's wheat output is likely to slide more than 15 percent in 2012/13 from a record-large crop this year as lower global prices may prompt farmers to shift to other crops such as canola and barley.
Wheat output is expected to fall to 25 million tonnes in the year to June 2013, down from an all-time high of 29.5 million tonnes which is estimated to have been produced this year, according to a Reuters survey of 10 analysts.

Bangladesh rice production rises over 3 pct in 2011
DHAKA, March 4 (Reuters) - Bangladesh produced a record 34.25 million tonnes of rice in 2011, 3.16 percent more than the previous year, helped by favourable weather and continued government support for the farming sector, a senior agriculture official said on Sunday.
"Bangladesh has now almost achieved self sufficiency in food grains (rice and wheat), with most farmers using high-yielding seeds," said the official, who requested not to be named.

Argentine dockers end strike in Rosario grain hub
BUENOS AIRES, March 2 (Reuters) - Argentine dock workers ended a strike on Friday that had delayed dozens of grain ships in the country's main grains hub Rosario, port chamber CAPYM said.
Dock workers who moor ships in Argentine harbors walked off   the job on Thursday for an indefinite strike over what they called inadequate staffing of work shifts.

USDA offers farmers more money to idle sensitive land
CHICAGO, March 2 (Reuters) - U.S. officials said on Friday they would offer higher payments to certain owners of environmentally sensitive farm land if they idle it in a conservation program instead of using it to grow crops.
The offer from the U.S. Department of Agriculture is an attempt to slow an exodus of millions of acres from conservation programs at a time when high crop and land prices are enticing farmers to put the land into production. Increased payments will be available to owners of up to 1 million acres (400,000 hectares) of the highly sensitive grasslands and wetlands under a new initiative that is part of the federal Conservation Reserve Program, or CRP.

Texas Rice Farmers Lose Their Water (Source: CME)
The state's persistent drought has claimed its latest victims: rice farmers. Because of low water levels in several lakes that serve as reservoirs here, officials said they wouldn't release irrigation water to farmers in three counties downstream that produce much of the rice in the state. The rice industry contributes about $394 million annually to the economy of the state, which produces about 5% of the nation's rice. The three counties -- Colorado, Wharton and Matagorda -- lie west of humid Houston and usually get enough rain to make rice farming practicable. This is the first time in its 78-year history that the Lower Colorado River Authority, which is based here, has cut off water to farmers. The agency waited until the last possible moment -- a minute before midnight on Thursday -- to make its decision, hoping that water levels would rise enough to avert a cutoff.
The irrigation ban is not expected to affect the shelf price of rice, but it has forced some farmers to lay off employees and consider diversifying into other crops. "This is my livelihood at stake," said Ronald Gertson, a Texas rice farmer who projected he would produce only about 40% of his typical rice crop this year. "It sticks in the craw" of farmers, Mr. Gertson said, that the authority will continue to release water to golf courses and other recreational customers that pay higher rates for a guaranteed water supply. In a statement, the agency said that farmers "pay considerably less for water than cities and industry. And therefore, their water is considered 'interruptible' during a severe drought." Texans in the rice business said they could probably stay afloat this year, thanks in part to crop insurance, but they worried about another year of interrupted irrigation water.
"If this happens again, we'll be in much more trouble," said Dick Ottis, the president of the Rice Belt Warehouse in El Campo, Texas, which stores and dries rice. The warehouse plans to store more corn, wheat and other commodities this year, he said, but those crops do not produce the profit margins rice does. "I have already let go about 20% of our employees, because I knew this day was coming about," Mr. Ottis said, adding that his family had been involved in rice farming for almost 100 years and had lived through droughts, but none this bad. It always seemed like the good Lord would bless us with more rain," he said. But there appears to be little relief in sight from the drought that still afflicts 85% of Texas. Temperatures are expected to be above normal this summer, said John Nielsen-Gammon, the state climatologist. Rainfall levels are harder to predict, he said, but "we are in a dry stretch now, which will be worrisome if it continues. It reminds me of last year."
The water agency said it plans to find new supplies of water to avoid a repeat of this year's problems. Farmers agree. "The development of new reservoirs is imperative," said Daniel Berglund, a 49-year-old rice farmer in Markham, Texas, who said he woke up at 1:15 a.m. Friday and checked to see whether the lakes, against all odds, had risen high enough to allow irrigation water to be released. "Consumers only see grocery shelves stacked with food, floor to ceiling," he said. "This is an example of the risks we take as farmers. When you lose irrigation water, it stops everything," he said.

Cofco Chairman: China Corn Supply Sufficient In 2012 (Source: CME)
China's corn supply is sufficient this year thanks to a record harvest in 2011, Ning Gaoning, chairman of state-owned grain trader Cofco Group, said. Corn prices are very stable, he said on the sidelines of the National People's Congress, implying sluggish demand for imported corn due to high international prices. But in the long term, China's corn will be in tight supply as domestic consumption is increasing rapidly, he said. He also said his company's corn import plans are uncertain, and its imports depend on availability on the domestic market. Corn output in China rose 8.2% in 2011 to a record 191.75 million metric tons, according to government data. Liu Yonghao, the chairman of New Hope Group, China's largest feed mill, said Monday that domestic corn prices are "comfortable," but the outlook for the second half of the year remains uncertain.
Liu urged the central government to liberalize imports and exports of feed grains or at the very least allocate additional corn import quotas directly to feed mills and animal producers. China's 2012 corn import quotas totaled 7.2 million tons, unchanged from 2011, with state-owned companies allocated 60% of the total. Actual corn imports for 2011 rose 11.5% to 1.7 million tons. While some state-owned traders don't use up their corn import quotas, some private feedmills don't have allocations. Liu said China's corn traders only import when global prices are much lower than those in the domestic market. New Hope Group will be able to meet most of its demand with domestic corn this year, but it will consider importing if it still faces a deficit, he said.

India’s Ban on Cotton Exports May Unravel Deals After 2011 Disputes Surged (Source: Bloomberg)
A halt in cotton exports by India, the world’s second-biggest shipper, may boost contract disputes after arbitration cases surged to a record in 2011 following the slump in prices from the all-time high, analysts said. Yesterday, India effectively revoked export certificates for as much as 2.6 million bales. The nation banned shipments after sales reached 9.4 million bales in the year that began Oct. 1, 12 percent more than an estimated surplus. Cotton surged the most in nine months on ICE Futures U.S. in New York, and the exchange boosted margins by 76 percent. In 2011, the U.K.-based International Cotton Association got 242 requests for technical arbitration, more than five times the yearly average and double the record in 2008. From Jan. 1 to mid-February, the group received 41 cases, Nicky Simon, a spokeswoman, said last month in an e-mail.
More defaults probably will involve “Indian merchants to mills outside of India,” Jordan Lea, the chairman of Greenville, South Carolina-based Eastern Trading Co., said in an e-mail. “I understand that most of the Indian cotton that was sold, but yet unshipped, is owed to China.”

Cotton Futures Surge by Exchange Limit in N.Y. After India Bans Exports (Source: Bloomberg)
Cotton for May delivery rose by the exchange limit of 4 cents, or 4.5 percent, to 92.23 cents a pound at 8:27 a.m. in New York. A close at that price would be the biggest one-day percentage gain since May 31. India, the world’s second-biggest exporter, halted shipments until further notice, the Commerce Ministry said in a statement dated today.

India bans cotton exports effective immediately
MUMBAI, March 5 (Reuters) - India has banned cotton exports with immediate effect, the Directorate General of Foreign Trade (DGFT) said on Monday, as the world's second-largest exporter of the fibre moves to conserve supplies for local mills.
"Export of cotton has been prohibited till further orders,"  the DGFT said in a statement. India is the world's second largest producer of cotton and most of its shipments go to China, the world's largest user of the fibre.

Glencore's Cotton Team Suffers Amid Volatility; Has New Leader (Source: CME)
Like its peers, Glencore International PLC suffered losses from the cotton market in 2011 as suppliers reneged on their Glencore contracts and the derivatives market disconnected from the physical market, the company's chief executive said. Glencore's agricultural products segment posted a negative adjusted earnings before interest and taxes, or Ebit, of $47 million in 2011, compared to a positive contribution of $717 million, largely due to the cotton team's trading activities. Excluding the cotton division's losses, the group's entire marketing division would have posted a 10% rise in adjust Ebit in 2011, Glencore said. Ivan Glasenberg told Dow Jones Newswires that the company has placed a Glencore grains trader to head up the new cotton team, which should help improve the division's performance.
Glasenberg didn't provide a name of the new cotton team leader, but people familiar with the matter identified him as Peter Poort, a trader with over 20 years experience at Glencore. Poort replaced Mark Allen, who had previously been hired from Noble Group. "There was this massive volatility in the cotton market," Glasenberg said. Prices rushed to a record $2.27 a pound a year ago as floods in Pakistan and export restrictions from No. 2 cotton grower India sparked supply concerns. Prices then slid for months, ending 2011 at 91.80 cents per pound. The price swing crushed margins at textile mills and apparel makers, and hurt cotton-trading margins at major commodity houses such as Olam International Ltd., Noble Group Ltd. and Glencore.
"Even if you hedged it out on the paper side of the business, you've got nonperformance from a larger amount of these suppliers during this high-price period," Glasenberg said. "They did not deliver, they actually sold in to the market on a spot basis and did not perform on the existing contract. So naturally you take a hit there." He said Glencore's cotton trading business was also new, having been put together from outside the company. "It is something that we don't normally do in Glencore. We try to grow the people from within," he said. "Had a Glencore guy been running that business at that time, yes, I believe that we would not have been exactly at this position but it was the vagrancies of the market during that period which caused us to take that hit as did all other trading companies," he added.
Front-month cotton prices on ICE Futures U.S. have shed more than 60% since hitting the record peak last year, as the high prices encouraged farmers worldwide to plant more of the fiber, creating a supply glut against a backdrop of still-lackluster demand. Global cotton production in the 2011-12 season ending July 31 will hit a record 123 million bales, the U.S. Department of Agriculture said in its annual outlook last month. In the same period, global consumption of the fiber is forecast to fall by 4.3%. The more actively traded March contract was recently trading at 92.23c/lb.

Coffee Crop in Indonesia Poised for Highest in 3 Years (Source: Bloomberg)
The coffee harvest in Indonesia, the third-biggest grower of the robusta variety used in instant drinks and espressos, is set to climb to the largest in three years, potentially capping an 11 percent rally. Production may increase 20 percent to 10 million bags this year from 8.3 million bags a year earlier, according to the median estimate in a Bloomberg survey of seven exporters, two traders and a roaster. That’s the most since 2009, according to U.S. government figures, and more than the 9.1 million bags predicted by Volcafe, a unit of ED&F Man Holdings Ltd. Robusta futures jumped to a five-month high in February as Vietnamese growers, the world’s biggest, held back supplies. The harvest from Indonesia starting in April may help replenish inventories, limiting gains and containing costs for Nestle SA (NESN), maker of Nescafe and Nespresso. Prices may drop as low as $1,700 a metric ton from $2,015 now, according to INTL FCStone Inc.
“The tightness in the robusta market will be here for at least another month,” said Oscar L. Schaps, managing director of global soft commodities at INTL FCStone in Miami. “The recent rise will attract more exports from Vietnam.”  Kenyan Firm To Build Sugar-beet Ethanol Plant - Report A Kenyan firm, Wedco, will build a biofuel complex to produce fuel ethanol from sugar beet in western Kenya, the Daily Nation newspaper reports. Wedco, which is funded by investors from the U.K., China and Qatar with commercial banks like Bank of Africa and Equity Bank at a cost of KES12 billion ($142 million) will blend the ethanol with petrol for road transport use, the daily says. Construction is expected to commence immediately and production is expected to start early next year, the daily says, with the ethanol to be sold in bulk to Kenol Kobil and National Oil Cooperation for blending and distribution.
Although the company will produce fuel ethanol as the main product, other products like biogas and liquid carbon dioxide will also be produced, the daily says.

Sudan to launch $1 bln sugar plant, eyes exports from 2014
NEAR ABU HEBERA VILLAGE, Sudan, March 4 (Reuters) - Sudan plans to increase sugar production by 450,000 tonnes annually with the help of a $1 billion plant, aiming to end dependency on imports and start exporting sugar by 2014, officials and executives said.
The African country is trying to cut food imports stoking inflation and eating into the dwindling budget. Sudan is undergoing an economic crisis after losing three-quarters of its oil production -- the lifeline of the economy -- when South Sudan became independent in July.

Billionaires Buying Gasoline Tankers as Fuel Demand Accelerates: Freight (Source: Bloomberg)
The richest investors in shipping are buying gasoline tankers, anticipating that fuel demand will expand faster than the fleet for the first time in nine years. Global shipments will jump 4.3 percent in 2012 as vessel capacity gains 3.7 percent, according to London-based Clarkson Plc (CKN), the world’s largest shipbroker. Daily rates for Medium- Range tankers, each hauling enough fuel to fill about 780,000 cars, will rise 19 percent to an average of $14,844 this year, the median of 10 analyst estimates compiled by Bloomberg shows. That’s more than the $10,999 anticipated in forward freight agreements, traded by brokers and used to bet on future rates.
John Fredriksen, whose publicly traded assets are valued at $9.27 billion, ordered as many as 10 of the tankers last month. Wilbur Ross, whose company manages about $10 billion of assets, was part of a group buying 30 vessels in September. Global refineries are shifting to India and China from Europe and the U.S., increasing delivery distances and tying up vessels for longer, effectively boosting demand for shipping. “This is smart money that has historically done well investing at the right time of the cycle,” said Jonathan Chappell, an analyst at Evercore Partners Inc. in New York whose recommendations on the shares of shipping companies returned 9.8 percent in the past three months. “Those purchases by Ross and John Fredriksen confirm that the fundamentals appear most attractive for product tankers.”

Euro Coal-Prices hold steady despite gas, oil falls
LONDON, March 2 (Reuters) - Prompt physical coal prices were little changed on Friday after a day of quiet trading and little direction from either the oil or gas markets.
European DES ARA prices had fallen for three days in a row, pressed by the flow of U.S. coal into Europe and weak demand from utilities.

Asia Coal-Australian coal prices dip on weak demand
PERTH, March 2 (Reuters) - Australia's thermal coal price benchmark slipped to under $112 a tonne this week, with demand sluggish and coal producers recovering from wet weather in the past few weeks.  Thermal coal on the globalCOAL Newcastle index for the week to date closed at $111.68 per tonne on Thursday, falling from $116.69 a week earlier.    

Iron Ore-China steel snaps 5-day rise after growth goal cut
SINGAPORE, March 5 (Reuters) - Benchmark China steel futures fell nearly 1 percent on Monday, snapping a five-day climb as investors worried about the outlook for demand after Beijing cut its 2012 growth target to 7.5 percent to give the economy more room to slow if needed.
Chinese Premier Wen Jiabao dropped the annual growth target from the 8 percent figure set in the previous eight years, citing the need to take a cautious and flexible approach and to keep prices stable.

Iron ore exports to China up at Australia's Port Hedland
SYDNEY, March 4 (Reuters) - Iron ore shipments to China through Australia's Port Hedland rose modestly in February compared with January, according to data released by the port authority, suggesting steady demand from the world's largest steel industry after signs of a weak start to 2012.            
A cloudy outlook for steel demand curbed China's appetite for iron ore recently as mills opted to run down inventories instead of booking new orders, according to commodities traders.

Oil Edges Higher on Iran Tension (Source: Bloomberg)
Oil edged higher as U.S. President Barack Obama and Israeli Prime Minister Benjamin Netanyahu met to discuss how to confront Iran over its nuclear program and China cut its economic growth target. Futures posted the smallest move in 10 months after Obama said in a meeting with Netanyahu today at the White House that “all options” are available to prevent a nuclear-armed Iran. Prices fell as much as 1.1 percent earlier as China’s Premier Wen Jiabao said his country will aim for expansion of 7.5 percent this year, the lowest goal since 2004. “There’s no clear, overall price direction,” said Tim Evans, an energy analyst at Citi Futures Perspective in New York. “If we don’t get a disruption in Iranian supply, everything lines up in the bearish column. The geopolitical risk adds $20 to $30 barrel to the price, allowing us to ignore the market fundamentals.”
Oil for April delivery rose 2 cents to settle at $106.72 a barrel on the New York Mercantile Exchange. It was the smallest one-day move since April 25. Prices are up 8 percent this year.

Oil Gains for a Second Day on U.S. Economic Outlook, Middle East Tension (Source: Bloomberg)
Oil climbed for a second day in New York on speculation signs of a U.S. economic recovery will increase fuel demand and concern that tension with Iran will disrupt crude supplies. West Texas Intermediate futures gained as much as 0.6 percent. President Barack Obama said at a meeting with Israeli Prime Minister Benjamin Netanyahu yesterday that the U.S. has a “rock solid” commitment to Israel’s security and that “all options” are available to prevent a nuclear-armed Iran. Service industries in the U.S., the world’s biggest crude consumer, unexpectedly grew in February at the fastest pace in a year. Oil for April delivery advanced as much as 62 cents to $107.34 a barrel on the New York Mercantile Exchange and was at $107.16 at 10:45 a.m. Sydney time. The contract yesterday rose 2 cents to $106.72. Prices slipped 2.8 percent last week and are 1.6 percent higher the past year.

China's growing strategic stake in the Middle East
--John Kemp is a Reuters market analyst. The views expressed are his own--
LONDON, March 2 (Reuters) - China's growing demand for imported oil, coupled with the development of new oil and gas supplies in North America, is set to transform the international security situation in the Middle East over the next 20 years.
That is the inescapable conclusion from an arresting slide in a presentation given by Maria van der Hoeven, executive director of the International Energy Agency (IEA), at a seminar on the future of energy in Mexico City on Feb. 29.

Brent back near $124 on supply concerns over Iran
SINGAPORE, March 5 (Reuters) - Brent crude climbed to near $124, rebounding from a drop of 2 percent the previous session as another refiner announced cuts to Iranian imports, feeding fears of a supply crunch as the West presses ahead with sanctions on Tehran.
"There's no other alternative to Iranian oil except for Saudi oil and they have already increased exports last month," he said, adding that global oil consumption is increasing on the back of growing demand for oil in Asia.

Singapore says LNG imports can replace piped gas supply
SINGAPORE, Mar 5 (Reuters) - Singapore's new liquefied natural gas (LNG) terminal will be able to handle sufficient imports of the fuel to cover all of the country's power needs, even if piped gas supply contracts with Malaysia and Indonesia are not renewed, a top energy regulator said on Monday.
Singapore depends on natural gas for around 80 percent of its power generation needs, with the bulk sourced from Indonesia and Malaysia under long-term contracts.

China to "push forward" building oil reserve tanks -official
BEIJING, March 5 (Reuters) - China will "push forward" with building phase-two strategic oil reserve sites, Liu Tienan, head of the China National Energy Administration told reporters on Monday.
Liu didn't give further details when asked about progress on the reserve bases. Industry officials have said China is expected to complete building the phase-two tanks around the end of this year, after kicking off construction in early 2009.

Enbridge U.S. oil line to be shut for four more days
NEW LENOX, Illinois, March 4 (Reuters) -   A key segment of Enbridge Inc's  oil pipeline system in the U.S. Midwest will remain shut down for up to four more days after a deadly vehicle accident in Illinois caused an oil leak and fire, likely squeezing supplies for refiners in the region, the company said on Sunday .
The shutdown of Enbridge's 318,000 barrel a day Line 14/64, part of a network that carries oil produced in Canada to Griffith, Indiana, from Superior, Wisconsin, is also expected to pressure already-weak prices for Canadian crude this week as supplies back up in Alberta, market sources and analysts said.

Mitsui Seeks Copper With Record $17 Billion Cash: Commodities (Source: Bloomberg)
Mitsui & Co. (8031), holding a record $17 billion in cash, wants to buy mining stakes and expand operations to triple copper output and more than double coal production, easing its reliance on iron ore sales. The biggest Japanese iron ore supplier is looking to buy 9 million metric tons of annual coal production from Russia, Australia, South America and Africa, Fuminobu Kawashima, head of resources of the Tokyo-based company, said in an interview. Mitsui also wants to add 120,000 tons of copper a year from South America, expecting Chinese demand will expand, he said. “Iron ore makes a very strong contribution to our profit, and I’d like to see it balanced,” Kawashima said. Iron ore, the main raw material for making steel, provides more than half of Mitsui’s net income, according to Barclays Capital. (JNK)
The most resource-dependent of the Japanese trading companies has the most cash since 1993, after ore prices gained more than tenfold in the past decade. Separately, Mitsui is expanding mining ventures with partners including Chile’s Codelco, Rio Tinto Group (RIO) and BHP Billiton Ltd. (BHP) as metals prices hover near historical highs.

Copper Futures Fall Most in Two Weeks on Signs That China Demand May Ease (Source: Bloomberg)
Copper fell the most in two weeks on concern that demand will slow after China, the world’s biggest metals consumer, cut its economic-growth target. The country’s 8 percent annual goal in place since 2005 was lowered to 7.5 percent, Premier Wen Jiabao said today. Copper also dropped on forecasts that automobile sales in China in the two months ended Feb. 29 headed for the biggest decline in seven years after gasoline costs climbed to a record. China “is not growing quite as fast as it was, and that’s taking some of the steam out of the market,” William O’ Neill, a partner at Logic Advisors in Upper Saddle River, New Jersey, said in a telephone interview. “People are concerned about the level of Chinese inventories.” Copper futures for May delivery slid 1.1 percent to settle at $3.8595 a pound at 1:14 p.m. on the Comex in New York, the biggest loss since Feb. 17. The metal has gained 12 percent this year.
Stockpiles monitored by the Shanghai Futures Exchange have climbed to the highest since at least January 2003, weekly data showed.

Gold Declines for Second Day As China Cuts Growth Target; Silver Drops (Source: Bloomberg)
Gold declined for the second straight session after China announced the lowest economic growth target in seven years, curbing prospects for commodity demand and global growth. The MSCI All-Country World Index (MXWD) dropped as much as 0.9 percent and the Standard & Poor’s GSCI index of 24 raw materials retreated as much as 0.7 percent after China cut the nation’s economic growth target to 7.5 percent from an 8 percent goal in place since 2005, according to Premier Wen Jiabao’s speech at the National People’s Congress today. “China’s statements have dampened market sentiment today,” Stephen Platt, an analyst at Archer Financial in Chicago, said in a telephone interview. Gold futures for April delivery fell 0.3 percent to settle at $1,703.90 an ounce at 2:04 p.m. on the Comex in New York. Prices dropped 3.7 percent last week, the most since Dec. 16, while the dollar gained 1.3 percent against a six-currency basket.

Drybulkers in troubled waters as China iron ore imports seen weak
Feb 29 (Reuters) - Dry bulk transporters, already hit by an oversupply of ships, could be forced to operate their vessels below breakeven for a much longer period than feared as top iron ore consumer China looks to cut down on imports.
China's iron ore imports may fall up to 14 percent this year as domestic output ramps up, a mining industry group said on Wednesday. The country buys about 60 percent of the world's seaborne iron ore.

Baltic sea index high on Pacific activity
March 2 (Reuters) - The Baltic Exchange's main sea freight index tracking rates for ships carrying dry commodities rose on Friday for the seventh straight day, as activity in the Pacific basin helped dry bulk rates.
The main index that reflects the daily freight market rates for capesize, panamax, supramax and handysize dry bulk transport vessels rose 8 points or 1.05 percent to 771 points.