KUALA LUMPUR, March 7 (Reuters) - Following are estimates on palm oil prices and other edible oil markets from leading analysts at the Bursa Malaysia conference that ends on Wednesday.
DORAB MISTRY, ANALYST AND TRADER, GODREJ
PRICE OUTLOOK
Soft U.S. dollar will continue until end of 2012. Brent crude prices to range between $100 to $120.
Expects palm oil prices to peak at $1,250 FOB, or about 4,000 ringgit, by the end of June 2012, thanks to low output cycle, demand from India in peak summer months and stocking by Muslim countries ahead of fasting observance in July.
See a pullback after June with prices remaining in a band of $1,150 to $1,200 FOB. Prices seen declining only after there is evidence that the low cycle is ending, around November 2012.
For the second half, it depends on production. Based on this prognosis, in terms of refined, bleached and deodorised palm olein, April-May-June and July-August-September should trade at a considerable inverse to October-November-Decembt.
Expects degummed soyoil to peak at between $1,250 and $1,300 FOB. Sees Chicago bean oil futures to climb to 60 cents despite the improvement in meal prices on limited acreage for U.S. soybeans and strong soyoil use in South American biofuel sector.
Expects lauric oils to trade higher than at present. Coconut oil will go to a discount to crude palm kernel oil (CPKO) and should trade to a high of $1,550 CIF Rotterdam. CPKO will peak at $1,700 CIF Rotterdam.
GLOBAL SUPPLY/DEMAND
Global demand growth seen at 6 million tonnes in the current Oct-Sept crop year, compared to 5.3 million tonnes rise in edible oil production.
Demand from the food sector up as world economic growth seen rising by three percent although high prices will limit the demand growth to 3 million tonnes. As for biodiesel industry growth, issues in Iran will boost prices and lift the appeal of renewable energy.
SUPPLY FACTORS- PALM OIL
Crude palm oil output will be the single most important factor driving edible oil prices in 2012. Biological high cycle for palm oil production ended in December and there are now signs of tree stress.
The new low cycle will result in flat output for 2012. From March onwards, output each month will be less on a year-on-year comparison. Low cycle will end in November this year.
Keeps same estimate for Malaysian 2012 production which first issued in December. Output seen flat between 18.6-19 million tonnes. (Official Malaysian forecast is 19.3 million tonnes versus 18.9 million tonnes in 2011).
Estimates Indonesian production will be higher by about 1.4 million and will reach 26.5 million tonnes this year on maturing acreage.Official Indonesian forecast is an increase of 14 percent to 25.7 million tonnes.[ID:nL3E8C933G]
Says Malaysia's move to continue tax-free export quota for crude palm oil "can be a clever strategy if they will keep releasing more quota from time to time.
Says more Malaysian crude palm oil exports will keep stocks down and keep futures high although refineries and oleochemical plants will become idle like its biodiesel industry.
Other option is to adopt a carbon copy of the Indonesian export tax regime where tariffs of refined grade are half of that of the crude grade and do away completely with the duty-free export quota for crude palm oil.
Consumers like India, China and Pakistan unlikely to retaliate against Indonesia's tax change to protect their own refining sector as inflation in these countries remain high.
INDIA
Greater food demand to come from India's plan for a massive food security programme that will guarantee minimum amounts of cereals and food to each citizen at subsidised prices.
"When implemented it will create a large further burden of food subsidies and will also increase total Indian consumption of food grains. It is a bold step but one which is not before time."
India's edible consumption seen at a record 13.18 kilogram per capita in the current crop year, up 1.7 percent from a year ago that represents slowing growth due to high prices of vegetable oils.
India likely to buy a record 7.2 million tonnes of palm oil in Nov-Oct oil marketing year, up 8 percent from a year earlier. Soyoil imports seen flat at one million tonnes.
India's total vegetable oil imports to rise 9.3 percent to 9.48 million tonnes from a year ago on lower domestic production of rapeseed and stagnant yields.
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
THOMAS MIELKE, EDITOR, OIL WORLD
PRICE FORECAST
"Under the lead of soybean oil, I expect vegetable oil prices to appreciate in the coming months. Although we have already appreciated quite considerably since January, we could see another increase in soybean oil prices by $80-$100 until the end of June, driving up also palm oil and other vegetable oils.
"For palm oil, there is an interesting development shaping up for April-September, following an unusually big increase in production and exports until March, the past 12 months until this March, the growth in production and exports in April-September, will be very small."
"This isn't in the market yet -- this is price supportive. Our price forecasts for the calendar year -- we will make a new record for the average of calendar year 2012 in palm oil and soybean oil."
"RBD palm olein for Malaysia $1,180. Crude palm Rotterdam $1,150. Argentine soybean oil $1,250. The premium of lauric oils relative to palm oil will narrow. My preliminary forecast for palm kernel oil is $1,400."
INDIA AND CHINA
"A slowing down of the soybean crush, will create some additional bullish potential for oils and fats. Now we are at a point where prices are in an uptrend, and I would like to point that this uptrend will be continuing and that we're going to face a relatively tight outlook for April-June, with appreciating palm oil prices within the next three months.
"Despite the boost in palm oil (output), prices weakened only slightly and already bottomed at $950 and is now moving upward, and we're not yet at the highs - prices are likely to go further up."
"India and China, the two major net importing areas, both countries need considerably more palm oil in the current season. They need approximately (extra) 2 million tonnes of oils and fats imports every year, to satisfy their demand."
"The price outlook is for higher prices, despite a further increase in palm (production) by more than 2 million tonnes."
SOYBEAN OUTLOOK:
"Soybean and rapeseed production are declining - first time ever that this has happened. We are going to see a global production deficit of around 14 million tones in the current season. Production is declining and stocks are declining.
"Quite a bullish scenario, and this is happening mainly in soybeans. For the first time ever, global soybean production is going to decline by approximately 20 million tonnes. The drought is over, weather conditions have improved but the improvement came too late."
"Very poor crop in Paraguay, very poor crop in Brazil, and now the problem is too much rain rather than insufficient."
"Soybean prices move higher, and what we've seen over the past eight weeks is a beginning but its not all of the price impact. We could see, after a temporary setback, we should see higher prices in the second half of March, probably early April."
PALM OUTPUT
"Over the past 20 years world (palm oil) production more than doubled, but it's still not yet sufficient to satisfy demand. Is palm oil production rising sufficiently? It is very clear, due to biodiesel programs in South America, we need accelerating growth in palm. (For) outlook for 2012, we believe there will be a slowing down of the
"(Production) growth here in Malaysia after last year's very good increase in yields and production. We now look at a more moderate growth of 0.4-0.5 million tones � most of this already occurring in January-March."
"Indonesia, our very preliminary estimate (is) 1.6 million tones growth to approximately 25.5 million tones in production this year. This means a global increase of approximately 2.3 million tones in 2012, this is not enough to offset insufficient production of other vegetable oils."
"We need at least 78 million tones of palm in 2020 (and) I doubt that the expansions programs currently in place in new plantings, are on track to reach this estimate."
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
JAMES FRY, CHAIRMAN, LMC INTERNATIONAL
PRICE FORECAST
Says if today's high crude oil prices will stay for the year and Indonesian export subsidies for refiners set the seasonal floor to Malaysian palm oil stocks at 1.85 million tonnes, Bursa Malaysia palm oil price this year will average 3,250 ringgit ($1,073), with the average palm kernel oil price 530 ringgit higher.
says if stocks are 0.3 million tonnes lower (at 1.55 million) at the low point, then the average CPO price is 3,350 ringgit.
says if Brent crude price falls steadily towards $86 per barrel by the end of the year, then the average crude palm oil price over the course of 2012 will be 2,870 ringgit.
says if there is an Iranian nuclear crisis, leading to the closure of the Straits of Hormuz, the 2012 average crude palm oil price will be 3,190 ringgit, but with a low of 1,870 ringgit.
INDONESIA EXPORT TAX
Says Malaysian stocks inextricably linked to events in Indonesia. End-month palm oil stocks were the highest ever for January in both countries.
Says Malaysian government has signalled "business as usual" in setting the crude palm oil tax-free export quota at 3.6 million tonnes this year;
Says this is the year when market should see impact of the new export tax regime in Indonesia with its incentives for refiners.
Malaysian refined oil exporters will have to concede market share to Indonesia. This will push more of the world stocks onto Malaysia.
PALM OIL OUTPUT
Revises estimates of Indonesian crude palm oil output. Output seen at 22.2 million tonnes in 2010, 25.15 million last year and 27.6 million tonnes this year.
For Malaysia, keeps 2012 forecast at 18.9 million tonnes unchanged from the previous year. ($1 = 3.027 ringgit)
Wednesday, March 7, 2012
20120307 1818 FCPO EOD Daily Chart Study.
Bollinger band reading : pullback correction upside biased.
MACD Histrogram : falling lower, buyer reducing exposure.
Support : 3250, 3200, 3150, 3100, 3070 level.
Resistance : 3270, 3300, 3350, 3420 level.
Comment :
FCPO closed recorded gains with rising volume participation. Soy oil price currently trading higher after overnight closed recorded loss while crude oil price soaring after after overnight decline.
Crude palm oil May 2012 futures contract rise higher from negative zone after key industries experts giving bullish outlook during the last day of palm and lauric oils conference due to higher crude oil, weak US Dollar, strong demand and low output cycle factors.
Chart analysis remained unchanged suggesting a pullback correction upside biased market development.
When to buy : buy at support or weakness with larger cut loss and profit target.
When to sell : sell at resistant or strength with quick cut loss and profit target.
20120307 1742 FKLI EOD Daily Chart Study.
Bollinger band reading : pullback correction upside biased.
MACD Histrogram : weakening, buyer reducing position.
Support : 1570, 1565, 1550, 1540 level.
Resistance : 1580, 1590, 1600, 1610 level.
Comment :
FKLI closed recorded loss with decline volume transacted doing less than a point premium compare to cash market that closed recorded loss. Overnight U.S. markets recorded 2012 biggest falls and today Asia markets ended weaker while European markets edge up little higher currently.
Remained unknown over Greece debt swap deal raised some worries among investors with Australia economy soar below forecast plus slowing euro area GDP pressed global markets to trade lower.
Chart reading remained suggesting 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.
20120307 1706 Regional Markets EOD Daily Chart Study.
DJIA chart reading : correction range bound little upside biased.
Hang Seng chart reading : correction range bound little upside biased.
KLCI chart reading : pullback correction upside biased.
20120307 1547 Global Market & Commodities Related News.
Markets fall over Greece uncertainty, slowing growth
TOKYO, March 7 (Reuters) - Asian shares fell for the third day in a row as investors grew more risk averse, with renewed uncertainty over Greece's bailout and mounting worries about slowing global economies overshadowing support provided by ample liquidity.
"Markets are facing profit taking pressures, with prices having risen far more strongly than many anticipated this year," said Takao Hattori, senior investment strategist at Mitsubishi UFJ Morgan Stanley Securities in Tokyo.
Risk currencies on defensive on fresh Greece doubts
TOKYO, March 7 (Reuters) - Risk currencies were on the defensive while the Japanese yen held firm as doubts over whether Greece can pull together a bond swap deal with creditors prompted players to cut exposure to risky assets.
"I think we are at a watershed now. If the Greek debt swap goes well and the U.S. job data points to continued
recovery, then the market could return to the risk-on mood," said a trader at a Japanese bank.
COLUMN-Slower China growth won't curb commodity imports
--Clyde Russell is a Reuters market analyst. The views expressed are his own.--
SINGAPORE, March 6 (Reuters) - Is it time to turn bearish on China's commodity demand because the government has confirmed what everybody knew anyway, that economic growth will be slower in 2012?
Certainly some investors took news that this year's growth target had been lowered to 7.5 percent, an 8-year low, as a sell signal.
US wheat steadies, soy drops; economic worries weigh
SYDNEY, March 7 (Reuters) - U.S. wheat futures steadied, after posting its biggest daily percentage loss in nearly a month in the previous session, while soy and corn prices edged down as renewed economic concerns weighed on investor sentiment. Argentine dock workers are still on strike, preventing 150 grain ships from mooring in the country's main shipping hub of Rosario, a union official said.
Big crop to lift Australia wheat closing stocks 25 pct
CANBERRA, March 7 (Reuters) - Australia's record wheat harvest is forecast to leave the country with 10 million tonnes in closing stocks at the end of the marketing season in September, up 25 percent year-on-year, providing stiff competition to U.S. and Black Sea exporters.
With estimates of another large crop in 2012/13 (July-June), the nations' grain storage capacity and infrastructure is likely to come under pressure, industry officials and analysts said on the sidelines of an agriculture conference in Canberra on Wednesday.
Malaysia's response to Indonesia tax to drive palm oil-official
KUALA LUMPUR, March 6 (Reuters) - Malaysia, the word's No.2 palm oil producer, needs to address Indonesia's export tax changes to win back orders from the world's top supplier or stocks will rise and bring prices below 2,500 ringgit ($830), an industry official said on Tuesday.
Malaysia has been struggling to come up with a response to Indonesia's move to slash export tariffs for refined palm oil, which has boosted margins for its domestic processors and allowed them to offer discounts to overseas buyers.
Indian ministers to discuss cotton exports-textile secretary
NEW DELHI, March 6 (Reuters) - A panel of Indian ministers will meet on March 9 to discuss the issue of cotton exports, Textile Secretary Kiran Dhingra said on Tuesday.
India's farm minister has requested the prime minister to lift a ban on cotton exports announced this week, saying he had been kept in the dark about the decision.
China says has enough corn reserves; traders sceptical
BEIJING, March 6 (Reuters) - China will not need to import large amounts of corn this year as it has enough reserves, a senior official said on Tuesday, but traders said the world's second largest consumer was likely talking down prices ahead of a shopping spree.
Expectations that China will import some 4 million tonnes of corn in the 2011/12 crop year that began in October, on top of a record 2011 harvest, have steadily increased U.S. and domestic corn prices since late January.
Vietnam's 2012 rice exports to drop to 6.6 mln T-govt
HANOI, March 6 (Reuters) - Vietnam's rice exports are forecast to fall to 6.6 million tonnes in 2012, down 7 percent from last year, the Agriculture Ministry said on Tuesday.
Global rice trade in 2012 would fall 7 percent from last year to 32.8 million tonnes "due to lower import demand by leading importing countries such as Indonesia and Bangladesh", the ministry said in a report.
Oil World cuts Brazilian soybean crop forecast
HAMBURG, March 6 (Reuters) - Hamburg-based oilseeds analyst Oil World has cut its forecast of Brazil's 2012 soybean crop by 1.5 million tonnes to 68 million tonnes because of drought, it said on Tuesday.
Brazil's crop will be well down on the 75.3 million tonnes it harvested in early 2011. Global grain markets are awaiting a key U.S. Department of Agriculture forecast of Brazilian and Argentine crops on Friday, with lower South American harvests likely to transfer demand to the U.S.
Brent climbs above $122 on China demand, Iran concerns linger
SINGAPORE, March 7 (Reuters) - Brent crude climbed above $122 after China said it would boost energy imports this year while concerns persist over supply risks and Iran's nuclear program, despite the country's offer for talks with major powers.
"I think China's comments are a timely reminder that the Chinese and Asian economies are still growing strongly," said Ric Spooner, chief market analyst at CMC Markets. "Even though China's target growth rates are down for this year, it's still growing and that means more energy needs overall."
Brent climbs above $122 on China demand, Iran concerns linger
SINGAPORE, March 7 (Reuters) - Brent crude climbed above $122 on Wednesday after China said it would boost energy imports this year while concerns persist over supply risks and Iran's nuclear program, despite the country's offer for talks with major powers.
China's trade ministry said the country plans to boost energy imports in 2012, and will keep policies to ensure stable export growth, which it expects to improve in the second half of the year.
LME copper pauses after sell-off, caution stays
SINGAPORE, March 7 (Reuters) - London copper edged off two-week lows, after sliding more than 2 percent in the previous session, although the metal is still facing a downward pressure given a shaky outlook for global demand.
"The problem is many copper consumers are short of new orders so I don't expect the Chinese to buy aggressively even if the price falls below $8,000," she said.
Gold snaps 3-day loss, Greek debt fears linger
SINGAPORE, March 7 (Reuters) - Gold regained some ground as jewellers in Asia snapped up the metal after prices dropped 2 percent in the previous session, but investors were cautious because of lingering fears about a possible Greek default.
"Basically gold and other risky assets are all being lumped together. Nobody is really looking at individual fundamentals. They are just buying the dollar and pretty much selling everything else," said Nick Trevethan, a senior commodity strategist at ANZ in Singapore.
India cuts railway freight on iron ore exports
MUMBAI, March 6 (Reuters) - India has reduced the railway freight on iron ore meant for exports by 16 percent effective Tuesday, an industry body official said, a move expected to help exporters who have come under pressure after an increase in export duty in January.
The new freight has been set at 2,425 rupees ($48.48) per tonne of iron ore, down 475 rupees from the previous freight cost, said H.C. Daga, vice president with the Federation of Indian Mineral Industries.
German steel industry stabilizes after weak Q4
DUESSELDORF, March 6 (Reuters) - Germany's steel industry has been stabilizing since the start of the year after prices declined in the last quarter of 2011, the German Steel Federation said.
"Since the start of the year, indications are growing the steel industry in Germany has stabilised," President Hans Juergen Kerkhoff told reporters in remarks for publication on Tuesday.
China nickel demand to drop on lower stainless steel output -trade
HONG KONG, March 6 (Reuters) - China's nickel consumption may drop in March and imports are likely to take a hit as stainless steel producers, the top users of the metal, cut output, traders and analysts said on Tuesday.
Fewer orders amid a weak Chinese property sector have prompted several stainless steel mills to lower production, eating into demand for the raw material -- refined nickel and nickel pig iron (NPI) which is a low-grade ferro-nickel in China made from laterite ore imports.
LME copper pauses after sell-off, caution stays
SINGAPORE, March 7 (Reuters) - London copper edged off two-week lows after sliding more than 2 percent in the previous session, although the metal is still facing a downward pressure given a shaky outlook for global demand.
"The problem is many copper consumers are short of new orders so I don't expect the Chinese to buy aggressively even if the price falls below $8,000," she said.
Gold snaps 3-day loss, Greek debt fears linger
SINGAPORE, March 7 (Reuters) - Gold regained some ground as jewellers in Asia snapped up the metal after prices dropped 2 percent in the previous session, but investors were cautious because of lingering fears about a possible Greek default.
"Basically gold and other risky assets are all being lumped together. Nobody is really looking at individual fundamentals. They are just buying the dollar and pretty much selling everything else," said Nick Trevethan, a senior commodity strategist at ANZ in Singapore.
TOKYO, March 7 (Reuters) - Asian shares fell for the third day in a row as investors grew more risk averse, with renewed uncertainty over Greece's bailout and mounting worries about slowing global economies overshadowing support provided by ample liquidity.
"Markets are facing profit taking pressures, with prices having risen far more strongly than many anticipated this year," said Takao Hattori, senior investment strategist at Mitsubishi UFJ Morgan Stanley Securities in Tokyo.
Risk currencies on defensive on fresh Greece doubts
TOKYO, March 7 (Reuters) - Risk currencies were on the defensive while the Japanese yen held firm as doubts over whether Greece can pull together a bond swap deal with creditors prompted players to cut exposure to risky assets.
"I think we are at a watershed now. If the Greek debt swap goes well and the U.S. job data points to continued
recovery, then the market could return to the risk-on mood," said a trader at a Japanese bank.
COLUMN-Slower China growth won't curb commodity imports
--Clyde Russell is a Reuters market analyst. The views expressed are his own.--
SINGAPORE, March 6 (Reuters) - Is it time to turn bearish on China's commodity demand because the government has confirmed what everybody knew anyway, that economic growth will be slower in 2012?
Certainly some investors took news that this year's growth target had been lowered to 7.5 percent, an 8-year low, as a sell signal.
US wheat steadies, soy drops; economic worries weigh
SYDNEY, March 7 (Reuters) - U.S. wheat futures steadied, after posting its biggest daily percentage loss in nearly a month in the previous session, while soy and corn prices edged down as renewed economic concerns weighed on investor sentiment. Argentine dock workers are still on strike, preventing 150 grain ships from mooring in the country's main shipping hub of Rosario, a union official said.
Big crop to lift Australia wheat closing stocks 25 pct
CANBERRA, March 7 (Reuters) - Australia's record wheat harvest is forecast to leave the country with 10 million tonnes in closing stocks at the end of the marketing season in September, up 25 percent year-on-year, providing stiff competition to U.S. and Black Sea exporters.
With estimates of another large crop in 2012/13 (July-June), the nations' grain storage capacity and infrastructure is likely to come under pressure, industry officials and analysts said on the sidelines of an agriculture conference in Canberra on Wednesday.
Malaysia's response to Indonesia tax to drive palm oil-official
KUALA LUMPUR, March 6 (Reuters) - Malaysia, the word's No.2 palm oil producer, needs to address Indonesia's export tax changes to win back orders from the world's top supplier or stocks will rise and bring prices below 2,500 ringgit ($830), an industry official said on Tuesday.
Malaysia has been struggling to come up with a response to Indonesia's move to slash export tariffs for refined palm oil, which has boosted margins for its domestic processors and allowed them to offer discounts to overseas buyers.
Indian ministers to discuss cotton exports-textile secretary
NEW DELHI, March 6 (Reuters) - A panel of Indian ministers will meet on March 9 to discuss the issue of cotton exports, Textile Secretary Kiran Dhingra said on Tuesday.
India's farm minister has requested the prime minister to lift a ban on cotton exports announced this week, saying he had been kept in the dark about the decision.
China says has enough corn reserves; traders sceptical
BEIJING, March 6 (Reuters) - China will not need to import large amounts of corn this year as it has enough reserves, a senior official said on Tuesday, but traders said the world's second largest consumer was likely talking down prices ahead of a shopping spree.
Expectations that China will import some 4 million tonnes of corn in the 2011/12 crop year that began in October, on top of a record 2011 harvest, have steadily increased U.S. and domestic corn prices since late January.
Vietnam's 2012 rice exports to drop to 6.6 mln T-govt
HANOI, March 6 (Reuters) - Vietnam's rice exports are forecast to fall to 6.6 million tonnes in 2012, down 7 percent from last year, the Agriculture Ministry said on Tuesday.
Global rice trade in 2012 would fall 7 percent from last year to 32.8 million tonnes "due to lower import demand by leading importing countries such as Indonesia and Bangladesh", the ministry said in a report.
Oil World cuts Brazilian soybean crop forecast
HAMBURG, March 6 (Reuters) - Hamburg-based oilseeds analyst Oil World has cut its forecast of Brazil's 2012 soybean crop by 1.5 million tonnes to 68 million tonnes because of drought, it said on Tuesday.
Brazil's crop will be well down on the 75.3 million tonnes it harvested in early 2011. Global grain markets are awaiting a key U.S. Department of Agriculture forecast of Brazilian and Argentine crops on Friday, with lower South American harvests likely to transfer demand to the U.S.
Brent climbs above $122 on China demand, Iran concerns linger
SINGAPORE, March 7 (Reuters) - Brent crude climbed above $122 after China said it would boost energy imports this year while concerns persist over supply risks and Iran's nuclear program, despite the country's offer for talks with major powers.
"I think China's comments are a timely reminder that the Chinese and Asian economies are still growing strongly," said Ric Spooner, chief market analyst at CMC Markets. "Even though China's target growth rates are down for this year, it's still growing and that means more energy needs overall."
Brent climbs above $122 on China demand, Iran concerns linger
SINGAPORE, March 7 (Reuters) - Brent crude climbed above $122 on Wednesday after China said it would boost energy imports this year while concerns persist over supply risks and Iran's nuclear program, despite the country's offer for talks with major powers.
China's trade ministry said the country plans to boost energy imports in 2012, and will keep policies to ensure stable export growth, which it expects to improve in the second half of the year.
LME copper pauses after sell-off, caution stays
SINGAPORE, March 7 (Reuters) - London copper edged off two-week lows, after sliding more than 2 percent in the previous session, although the metal is still facing a downward pressure given a shaky outlook for global demand.
"The problem is many copper consumers are short of new orders so I don't expect the Chinese to buy aggressively even if the price falls below $8,000," she said.
Gold snaps 3-day loss, Greek debt fears linger
SINGAPORE, March 7 (Reuters) - Gold regained some ground as jewellers in Asia snapped up the metal after prices dropped 2 percent in the previous session, but investors were cautious because of lingering fears about a possible Greek default.
"Basically gold and other risky assets are all being lumped together. Nobody is really looking at individual fundamentals. They are just buying the dollar and pretty much selling everything else," said Nick Trevethan, a senior commodity strategist at ANZ in Singapore.
India cuts railway freight on iron ore exports
MUMBAI, March 6 (Reuters) - India has reduced the railway freight on iron ore meant for exports by 16 percent effective Tuesday, an industry body official said, a move expected to help exporters who have come under pressure after an increase in export duty in January.
The new freight has been set at 2,425 rupees ($48.48) per tonne of iron ore, down 475 rupees from the previous freight cost, said H.C. Daga, vice president with the Federation of Indian Mineral Industries.
German steel industry stabilizes after weak Q4
DUESSELDORF, March 6 (Reuters) - Germany's steel industry has been stabilizing since the start of the year after prices declined in the last quarter of 2011, the German Steel Federation said.
"Since the start of the year, indications are growing the steel industry in Germany has stabilised," President Hans Juergen Kerkhoff told reporters in remarks for publication on Tuesday.
China nickel demand to drop on lower stainless steel output -trade
HONG KONG, March 6 (Reuters) - China's nickel consumption may drop in March and imports are likely to take a hit as stainless steel producers, the top users of the metal, cut output, traders and analysts said on Tuesday.
Fewer orders amid a weak Chinese property sector have prompted several stainless steel mills to lower production, eating into demand for the raw material -- refined nickel and nickel pig iron (NPI) which is a low-grade ferro-nickel in China made from laterite ore imports.
LME copper pauses after sell-off, caution stays
SINGAPORE, March 7 (Reuters) - London copper edged off two-week lows after sliding more than 2 percent in the previous session, although the metal is still facing a downward pressure given a shaky outlook for global demand.
"The problem is many copper consumers are short of new orders so I don't expect the Chinese to buy aggressively even if the price falls below $8,000," she said.
Gold snaps 3-day loss, Greek debt fears linger
SINGAPORE, March 7 (Reuters) - Gold regained some ground as jewellers in Asia snapped up the metal after prices dropped 2 percent in the previous session, but investors were cautious because of lingering fears about a possible Greek default.
"Basically gold and other risky assets are all being lumped together. Nobody is really looking at individual fundamentals. They are just buying the dollar and pretty much selling everything else," said Nick Trevethan, a senior commodity strategist at ANZ in Singapore.
20120307 1123 Global Market & Commodities Related News.
GLOBAL MARKETS-Markets fall over Greece uncertainty, slowing growth
TOKYO, March 7 (Reuters) - Asian shares fell for a third day in a row on Wednesday as investors grew more risk averse, with renewed uncertainty over Greece's bailout and mounting worries about slowing global economies overshadowing support provided by ample liquidity.
"The correction likely reflects concerns about the Greek PSI (private sector involvement), Chinese growth and high oil prices. But these concerns are not new, and so far, they are more likely to reflect profit taking than a fundamentally driven re-pricing of risk," Barclays Capital analysts said.
COMMODITIES-Raw materials slump continues on Greek worries
NEW YORK, March 6 (Reuters) - Commodities tumbled on Tuesday, continuing a broad and sharp selloff as worries about Greece's debt restructuring and weak economic data fed fears that demand for raw materials would remain slack.
"The risk premium on Iran was pretty high, so one should expect to see that fading because world powers are willing to talk to Iran," said Olivier Jakob, an analyst at Petromatrix in Zug, Switzerland.
Slower China growth won't curb commodity imports
--Clyde Russell is a Reuters market analyst. The views expressed are his own.--
SINGAPORE, March 6 (Reuters) - Is it time to turn bearish on China's commodity demand because the government has confirmed what everybody knew anyway, that economic growth will be slower in 2012?
Certainly some investors took news that this year's growth target had been lowered to 7.5 percent, an 8-year low, as a sell signal.
OIL-Oil falls on Iran talks, economy worries
NEW YORK, March 6 (Reuters) - Oil prices retreated on Tuesday as data showing a shrinking euro zone economy fueled fears of curbed demand for petroleum, while news that major powers accepted Iran's offer for more talks on its nuclear program eased concerns about supply disruptions.
"The risk premium on Iran was pretty high, so one should expect to see that fading because world powers are willing to talk to Iran," said Olivier Jakob, an analyst at Petromatrix in Zug, Switzerland.
NATURAL GAS-Mild forecasts drive most US natural gas futures lower
NEW YORK, March 6 (Reuters) - U.S. natural gas futures mostly ended lower on Tuesday, with mild late-winter weather and record-high supplies still weighing on the complex despite some technical buying in the front month after Monday's steep slide.
"Weather patterns continue to look warm out there over the next two weeks. There continues to be some support given the higher-than-normal levels of nuclear outages and fuel switching," Gelber & Associates analyst Pax Saunders said.
Euro Coal-Dips 20 cents, more stockpiling seen
LONDON, March 6 (Reuters) - Prompt physical coal prices held fairly steady on Tuesday, dropping by only 20 cents a tonne on Tuesday despite continued tepid buying interest in Europe and a steep fall earlier in the day in oil prices.
"We would expect opportunistic demand for the purpose of storage in order to deliver at a later date to be more attractive if it (the contango) were to widen above the $20 levels seen in early 2010," Barclays Capital said in a research note on Tuesday.
US oil stocks rise even as imports tumble-API
NEW YORK, MARCH 6 (Reuters) - U.S. crude oil inventories rose far more than expected last week and oil product stocks were mixed as crude imports tumbled, weekly data from the American Petroleum Institute showed on Tuesday.
U.S. crude stockpiles rose 4.6 million barrels in the week to March 2, compared with analysts' expectations for an 800,000 barrel build.
TOKYO, March 7 (Reuters) - Asian shares fell for a third day in a row on Wednesday as investors grew more risk averse, with renewed uncertainty over Greece's bailout and mounting worries about slowing global economies overshadowing support provided by ample liquidity.
"The correction likely reflects concerns about the Greek PSI (private sector involvement), Chinese growth and high oil prices. But these concerns are not new, and so far, they are more likely to reflect profit taking than a fundamentally driven re-pricing of risk," Barclays Capital analysts said.
COMMODITIES-Raw materials slump continues on Greek worries
NEW YORK, March 6 (Reuters) - Commodities tumbled on Tuesday, continuing a broad and sharp selloff as worries about Greece's debt restructuring and weak economic data fed fears that demand for raw materials would remain slack.
"The risk premium on Iran was pretty high, so one should expect to see that fading because world powers are willing to talk to Iran," said Olivier Jakob, an analyst at Petromatrix in Zug, Switzerland.
Slower China growth won't curb commodity imports
--Clyde Russell is a Reuters market analyst. The views expressed are his own.--
SINGAPORE, March 6 (Reuters) - Is it time to turn bearish on China's commodity demand because the government has confirmed what everybody knew anyway, that economic growth will be slower in 2012?
Certainly some investors took news that this year's growth target had been lowered to 7.5 percent, an 8-year low, as a sell signal.
OIL-Oil falls on Iran talks, economy worries
NEW YORK, March 6 (Reuters) - Oil prices retreated on Tuesday as data showing a shrinking euro zone economy fueled fears of curbed demand for petroleum, while news that major powers accepted Iran's offer for more talks on its nuclear program eased concerns about supply disruptions.
"The risk premium on Iran was pretty high, so one should expect to see that fading because world powers are willing to talk to Iran," said Olivier Jakob, an analyst at Petromatrix in Zug, Switzerland.
NATURAL GAS-Mild forecasts drive most US natural gas futures lower
NEW YORK, March 6 (Reuters) - U.S. natural gas futures mostly ended lower on Tuesday, with mild late-winter weather and record-high supplies still weighing on the complex despite some technical buying in the front month after Monday's steep slide.
"Weather patterns continue to look warm out there over the next two weeks. There continues to be some support given the higher-than-normal levels of nuclear outages and fuel switching," Gelber & Associates analyst Pax Saunders said.
Euro Coal-Dips 20 cents, more stockpiling seen
LONDON, March 6 (Reuters) - Prompt physical coal prices held fairly steady on Tuesday, dropping by only 20 cents a tonne on Tuesday despite continued tepid buying interest in Europe and a steep fall earlier in the day in oil prices.
"We would expect opportunistic demand for the purpose of storage in order to deliver at a later date to be more attractive if it (the contango) were to widen above the $20 levels seen in early 2010," Barclays Capital said in a research note on Tuesday.
US oil stocks rise even as imports tumble-API
NEW YORK, MARCH 6 (Reuters) - U.S. crude oil inventories rose far more than expected last week and oil product stocks were mixed as crude imports tumbled, weekly data from the American Petroleum Institute showed on Tuesday.
U.S. crude stockpiles rose 4.6 million barrels in the week to March 2, compared with analysts' expectations for an 800,000 barrel build.
20120307 1026 Local & Global Economic Related News.
The minimum wage deals only with the basic salary while employees and employers would have to discuss the additional benefits. Human Resources Minister Datuk Seri Dr S. Subramanim said this had been the practice in Malaysia “all the while”. “In the case of unionized workers, these unions will negotiate it in their collective agreements (CA) on such things,” he said. He acknowledged that there might be some hiccups when it came to the implementation of the minimum wage policy, but the situation would stabilise in time as an employer would always want to keep good workers. (NST)
The national minimum wage policy should be introduced in phases to give companies and businesses time to adjust, said a group of 16 business and manufacturing associations. Spokesman Lim Kok Boon, the president of the Malaysian Plastics Manufacturers Association, said while the group hails the new policy as a way to realise the government’s aim to become a high-income nation, the current concern is its implementation. “We are concerned that productivity will lag significantly following the introduction of the policy. This will increase the cost of production and make us competitive,” he said. “As the global economy has not fully recovered, many exporters are being forced to compete on price and will not be able to pass on cost increases to their customers,” he said. A sudden and substantial increase in wage will result in the closure of some 200 small plastics manufacturing companies, defined as those who employ fewer than 50 workers, he said. Another 10,000 jobs from medium to large companies are at risk with a higher wage bill following the introduction of the policy. (Financial Daily)
US weekly same-store sales rose 1.3% wow in the 3 Mar week (-1.0% in the previous week), according to ISCS-Goldman. On a yoy basis, the measure stood at 1.7% (2.7% in the prior week). (Bloomberg)
E.U: ECB balance sheet jumps to record EUR3tr last week after a second tranche of three-year loans. Lending to euro-area banks jumped EUR 310.7b to EUR 1.13tr in the week ended March 2, the Frankfurt- based ECB said in a statement. The balance sheet gained EUR 330.6b in the week. It is now more than a third bigger than the U.S. Federal Reserves USD 2.9tr and eclipses the EUR 2.3tr gross domestic product of Germany, the world's fourth largest economy. (Source: Bloomberg)
E.U: Economy contracts in 4Q11 as investment, exports decline. Gross domestic product shrank 0.3%. Exports fell 0.4% QoQ after a 1.4% QoQ gain in the previous three months, while household spending declined 0.4% QoQ and investment dropped 0.7% QoQ. (Source: Bloomberg)
U.K: Retail sales fell for a second month in February as a drop in purchases of clothing countered gains at food stores, the British Retail Consortium said. Sales at stores open at least 12 months, measured by value, fell 0.3% YoY which followed a 0.3% YoY decline in January. (Source: Bloomberg)
U.K: House prices fell in February for a third month in four, as economic uncertainty weighed on demand for housing, Halifax said. Prices dropped 0.5% MoM from January to an average GBP160,118 (USD253,400), the mortgage unit of Lloyds Banking Group Plc said in a statement. From a year earlier, values were down 1.6% YoY. (Source: Bloomberg)
Brazil: Growth of 2.7% in 2011 was its second-worst performance since 2003. Higher borrowing costs and a currency that rallied to a 12-year high led it to underperform emerging-market peers China and India. (Source: Bloomberg)
Vietnam: Central Bank to cut key interest rates to aid growth. Vietnam said it would cut its benchmark interest rates in the "next few days" amid a slowing global economy and after consumer prices rose the least in 11 months in February. The State Bank of Vietnam will reduce the repurchase rate and refinancing rate by 1ppts each, central bank Governor Nguyen Van Binh said in Hanoi. The repurchase rate for the seven-day term is currently 14% and the refinancing rate is 15%. It will also lower the maximum interest rate banks can pay for deposits in dong, Binh said. The rate is now at 14%. (Source: Bloomberg)
Australia: Holds key rate as EU shock potential lingers. The central bank reiterated it has scope to cut interest rates as Europe remains a potential source of shocks "for some time yet," sending the nation's currency to the lowest level in 1 1/2 weeks. Governor Glenn Stevens and his board left the overnight cash-rate target at 4.25%, the Reserve Bank of Australia said in a statement in Sydney. (Source: Bloomberg)
Inflation in the Philippines rose 2.7% yoy in Feb (4% in Jan) and was unchanged last month (0.4% mom in Jan). (Bloomberg, Dow Jones)
Indonesia’s money supply M2 rose 16% yoy in Jan (16.4% in Dec). (Bloomberg)
Thailand’s Commerce Permanent Secretary Yanyong Phuangrach announced that the consumer confidence index rose to 25.8 in Feb (24.2 in Jan), with increases seen in every category, spurred by the ongoing post-flood revival efforts and the government’s spending on aid. The consumer spending index was adjusted upwards to 66.4 on the back of salary and minimum-wage hikes coming into effect on 1 Apr. Thai rice exporters should also not be threatened by global competition, as Thai rice price is still high despite lower export quantity, Yanyong said, adding that the Commerce Ministry has readjusted the country’s rice-exporting strategy by focusing away from quantity to raising the price ceiling of Thai rice in the global market. (Thai Financial Post)
China's government debt amounts to about Rmb17.tr5 (US$2.78tr), about 43% of GDP. (Xinhua)
China's draft central and local budgets for 2012, submitted for reading at the parliamentary session, caught eyes for increasing government spending on livelihood programs. Expenditure budget to education totals Rmb378.13bn, an increase of 16.4% from 2011. The figure for medical and health care is Rmb203.51bn, up 16.4% While that for social security and employment is Rmb575.07bn, a rise of 21.9%. (Xinhua)
Greece is optimistic that it will achieve a 75% to 80% participation in a bond swap this week that aims to write off more than half of €177bn (US$234bn) in debt issued under Greek law, people with direct knowledge of the matter said. (WSJ)
The national minimum wage policy should be introduced in phases to give companies and businesses time to adjust, said a group of 16 business and manufacturing associations. Spokesman Lim Kok Boon, the president of the Malaysian Plastics Manufacturers Association, said while the group hails the new policy as a way to realise the government’s aim to become a high-income nation, the current concern is its implementation. “We are concerned that productivity will lag significantly following the introduction of the policy. This will increase the cost of production and make us competitive,” he said. “As the global economy has not fully recovered, many exporters are being forced to compete on price and will not be able to pass on cost increases to their customers,” he said. A sudden and substantial increase in wage will result in the closure of some 200 small plastics manufacturing companies, defined as those who employ fewer than 50 workers, he said. Another 10,000 jobs from medium to large companies are at risk with a higher wage bill following the introduction of the policy. (Financial Daily)
US weekly same-store sales rose 1.3% wow in the 3 Mar week (-1.0% in the previous week), according to ISCS-Goldman. On a yoy basis, the measure stood at 1.7% (2.7% in the prior week). (Bloomberg)
E.U: ECB balance sheet jumps to record EUR3tr last week after a second tranche of three-year loans. Lending to euro-area banks jumped EUR 310.7b to EUR 1.13tr in the week ended March 2, the Frankfurt- based ECB said in a statement. The balance sheet gained EUR 330.6b in the week. It is now more than a third bigger than the U.S. Federal Reserves USD 2.9tr and eclipses the EUR 2.3tr gross domestic product of Germany, the world's fourth largest economy. (Source: Bloomberg)
E.U: Economy contracts in 4Q11 as investment, exports decline. Gross domestic product shrank 0.3%. Exports fell 0.4% QoQ after a 1.4% QoQ gain in the previous three months, while household spending declined 0.4% QoQ and investment dropped 0.7% QoQ. (Source: Bloomberg)
U.K: Retail sales fell for a second month in February as a drop in purchases of clothing countered gains at food stores, the British Retail Consortium said. Sales at stores open at least 12 months, measured by value, fell 0.3% YoY which followed a 0.3% YoY decline in January. (Source: Bloomberg)
U.K: House prices fell in February for a third month in four, as economic uncertainty weighed on demand for housing, Halifax said. Prices dropped 0.5% MoM from January to an average GBP160,118 (USD253,400), the mortgage unit of Lloyds Banking Group Plc said in a statement. From a year earlier, values were down 1.6% YoY. (Source: Bloomberg)
Brazil: Growth of 2.7% in 2011 was its second-worst performance since 2003. Higher borrowing costs and a currency that rallied to a 12-year high led it to underperform emerging-market peers China and India. (Source: Bloomberg)
Vietnam: Central Bank to cut key interest rates to aid growth. Vietnam said it would cut its benchmark interest rates in the "next few days" amid a slowing global economy and after consumer prices rose the least in 11 months in February. The State Bank of Vietnam will reduce the repurchase rate and refinancing rate by 1ppts each, central bank Governor Nguyen Van Binh said in Hanoi. The repurchase rate for the seven-day term is currently 14% and the refinancing rate is 15%. It will also lower the maximum interest rate banks can pay for deposits in dong, Binh said. The rate is now at 14%. (Source: Bloomberg)
Australia: Holds key rate as EU shock potential lingers. The central bank reiterated it has scope to cut interest rates as Europe remains a potential source of shocks "for some time yet," sending the nation's currency to the lowest level in 1 1/2 weeks. Governor Glenn Stevens and his board left the overnight cash-rate target at 4.25%, the Reserve Bank of Australia said in a statement in Sydney. (Source: Bloomberg)
Inflation in the Philippines rose 2.7% yoy in Feb (4% in Jan) and was unchanged last month (0.4% mom in Jan). (Bloomberg, Dow Jones)
Indonesia’s money supply M2 rose 16% yoy in Jan (16.4% in Dec). (Bloomberg)
Thailand’s Commerce Permanent Secretary Yanyong Phuangrach announced that the consumer confidence index rose to 25.8 in Feb (24.2 in Jan), with increases seen in every category, spurred by the ongoing post-flood revival efforts and the government’s spending on aid. The consumer spending index was adjusted upwards to 66.4 on the back of salary and minimum-wage hikes coming into effect on 1 Apr. Thai rice exporters should also not be threatened by global competition, as Thai rice price is still high despite lower export quantity, Yanyong said, adding that the Commerce Ministry has readjusted the country’s rice-exporting strategy by focusing away from quantity to raising the price ceiling of Thai rice in the global market. (Thai Financial Post)
China's government debt amounts to about Rmb17.tr5 (US$2.78tr), about 43% of GDP. (Xinhua)
China's draft central and local budgets for 2012, submitted for reading at the parliamentary session, caught eyes for increasing government spending on livelihood programs. Expenditure budget to education totals Rmb378.13bn, an increase of 16.4% from 2011. The figure for medical and health care is Rmb203.51bn, up 16.4% While that for social security and employment is Rmb575.07bn, a rise of 21.9%. (Xinhua)
Greece is optimistic that it will achieve a 75% to 80% participation in a bond swap this week that aims to write off more than half of €177bn (US$234bn) in debt issued under Greek law, people with direct knowledge of the matter said. (WSJ)
20120307 1025 Malaysia Corporate Related News.
Speculation is rife that former Fraser & Neave Holdings Bhd chief executive officer Datuk Tan Ang Meng has been approached to helm troubled bread and confectionary maker Silver Bird Group Bhd. Banking sources said Ang Meng's name was among several that cropped up for consideration for the group managing director's position. (StarBiz)
Tune Money is speculated to be one of the candidates to acquire the controlling stake of 74.16% in Oriental Capital Assurance (OCA) from G Team Resources & Holdings. The deal is in the process and should be finalised soon. Bank Negara has already given its green light. The insurance company would provide Tune Money with a stronger platform in the industry and allow it to underwrite the insurance businesses of the Tune Group. (Star Biz)
Kimlun has secured a contract worth RM68.29m from United Malayan Land for the construction of apartments and ancillary buildings in Johor Bahru. The construction work will boost Kimlun’s book order to about RM1.5bn. (Star Biz)
Ngiu Kee Corp Bhd, a financially-distressed operator of supermarkets and departmental stores, says Bursa Securities has rejected its plan to revive its finances. The company faces a delisting if it does not come up with a suitable plan but it said it would submit an appeal on the Bursa decision within a month. (BT)
Philippine conglomerate San Miguel Corp is close to a deal to sell 60% of its banking unit to CIMB Group, with the two agreeing on a final price, the chairman of Bank of Commerce said yesterday. The deal, expected to be finalised this month, will provide San Miguel with fresh funds to close its US$610m purchase of ExxonMobil Corp’s Malaysian assets or new acquisitions such as Philippine Airlines. (Reuters)
Tan Chong Motor Holdings 70%-owned subsidiary, Tan Chong Motor Assemblies, has entered into an agreement to assemble passenger vehicles for TC Subaru. The agreement took effect from yesterday to Dec 31, 2013, with an option for extension. The expected total assembly charges and fees for the term was estimated at RM30.22m. (Star Biz)
HSL: Buys 275-acre land in Samariang for RM25.5mil. Hock Seng Lee Bhd's (HSL) property arm has acquired a 275-acre land in Kuching's northern township of Samariang for RM25.55 million cash. The land is planned for mixed development called Samariang Aman 3, which would generate an estimated gross development value of about RM700 million, its managing director Datuk Paul Yu Chee Hoe said today. He said the proposed project will comprise 1,500 landed residential homes consisting of semi-detached, quadruplex and terraced houses, 2,000 units of affordable housing and 40 units of commerical shophouses. "We anticipate works for Samariang Aman 3 to commence in 2013 and the development will take six to eight years," he said in a statement. (Source: The Star)
PETRONAS: Petronas, BASF seal RM4b pact. Petronas and BASF have taken the next step forward towards realising the announced RM4 billion investment that will expand their partnership in Malaysia. The partnership involves projects at their existing ventures in Kuantan and at a new site within Petronas' proposed Refinery and Petrochemical Integrated Development (Rapid) complex in Pengerang, Johor. These projects are to be implemented between 2015 and 2018. (Source: Business Times)
Perodua may cut production capacity as a last resort if sales continue to decline owing to stricter conditions on hire purchase loans for cars. Its MD Datuk Aminar Rashid Salleh said Perodua was also looking at other measures to address the issue. (Bernama, Malaysian Reserve)
Perodua says it is beginning to see signs of improvement on its sales after experiencing one of the biggest monthly declines early this year. Sales of Perodua models reportedly dropped 11% in January, partly due to higher rejection rates of loan applications following new lending guidelines from Bank Negara Malaysia. The loan application process, which in the past could be approved in as early as one working day, had lengthened to about a week in some cases follow the introduction of the new guidelines in January. "Based on the feedback from our dealers, we are seeing an improvement in the situation now," said Perodua managing director Datuk Aminar Rashid Salleh. (BT)
Takaful Malaysia: Nears deal on Indonesian stake sale. Kuala Lumpur: Syarikat Takaful Malaysia Bhd (Takaful Malaysia) is close to selling a stake in its Indonesian unit to a local partner to expand its distribution network in the republic. Group managing director Datuk Hassan Kamil said the insurer will consider issuing new shares as well. "We recently got another enquiry from a very large local insurance group. They are a close-knit family-run conglomerate," Hassan told Business Times in an exclusive interview recently. (Source: Business Times)
PPB: Sets 3-year capex of RM507m to boost growth. PPB Group Bhd has put aside some RM507 million as capital expenditure (capex) for this year till 2014. The bulk of the capex will go to its grains trading and flour and feed milling businesses managed by its wholly-owned subsidiary FFM Bhd. For this year alone, PPB Group managing director Tan Gee Soi said the company was looking at a capital commitment of up to RM350 million, especially with the launching of new property projects and operation of some of the flour mills in China. (Source: Business Times)
Dijaya Corp: Gets new assets from Danny Tan. Dijaya Corp Bhd will acquire 73 properties held by its largest shareholder Tan Sri Danny Tan for RM949mil, to be satisfied by RM250mil in cash and the issuance of 10-year 2% coupon redeemable convertible unsecured loan stocks over 10 years. It has proposed an equity fund raising of a renounceable rights issue of up to 491 million new shares at RM1.20 each and a bonus issue of up to 122.83 million shares. (Source: The Star)
Power: Petronas will not pay anymore compensation to TNB. Petroliam Nasional Bhd (Petronas) has clarified that it will not be paying anymore compensation to Tenaga Nasional Bhd (TNB) for the cost of alternative fuel used by the national power utility. Its president and chief executive officer Datuk Shamsul Azhar Abbas said the payment (RM1 billion) was supposed to be a "one-off" affair. (Source: The Star)
Timber: Malaysia's timber and timber product exports to rise this year. Malaysia's exports of timber and timber products in 2012 is expected to be better than last year, Plantation Industries and Commodities Minister, Tan Sri Bernard Dompok said today. He said Malaysia exported timber and timber products valued at RM19.8 billion last year and furniture products accounted for RM6.46 billion or 32.6 per cent of total exports. To sustain timber supply, he said, the government had earmarked large scale forest plantations, with 375,000 hectares to be planted over a 15-year period with an allocation of RM1 billion. (Source: The Star)
Bursa Malaysia Derivatives (BMD), which intends to offer innovative options for palm oil futures, plans to introduce dollar-denominated palm olein futures contracts sometime this year. "With this offering, refineries can now hedge the refining margin between crude palm oil (CPO) and palm olein," said Bursa Malaysia Bhd chairman Tun Mohamed Dzaiddin Haji Abdullah. (The Sun Daily)
Bursa Malaysia is banking on cross-border links with other bourses in Southeast Asia to grow instead of costly mergers and acquisitions. The exchange operator’s plan to link up with the Singapore Exchange in mid-2012, followed by Thailand in August, will attract investors to the region that is seen as an emerging market darling, said CEO Datuk Tajuddin Atan. (Reuters)
SapuraCrest Petroleum has received a letter of award from Petronas Carigali for the provision of a tender rig, known as T-9. The project was valued at about US$54m (RM163.4m) including mobilisation fee. (Star Biz)
Technical evaluation stage for the tunnelling scope of MRT SBK line has been completed. Of the total five contenders for the job, only three parties have qualified to proceed to the next stage, being the commercial evaluation. The companies are (i) Gamuda-MMC JV, (ii) Taiseh Corp of Japan, and (iii) one of the two Chinese bidders either Sinohydro or China Railway Construction Corp (CRCC). The companies which were eliminated had various technical issues including the number of tunnel boring machines (TBMs) to be deployed. The commercial evaluation stage is slated to commence by mid Mar-12, with the award to be made shortly after. (Financial Daily)
YTL Communications Sdn Bhd is moving closer to profitability with the launch of its Unlimited Super Postpaid Plans. The company is targeting to get 500k subscribers for the new plans by the end of this year bringing its total Yes subscribers close to 1m, the break-even figure for the company. The Yes Unlimited Super Postpaid Plans comprise four plans with monthly subscription ranging RM48-168. All plans come with unlimited data usage, speed of 20 Mbps and free Yes devices (with commitment). CEO Wing K. Lee said the company was not ruling out any merger and acquisition plans should they make sense. He said, “We are in continuously in discussion with companies, we could do it if it makes sense.” (Star Biz)
Datuk Tong Kooi Ong has taken up a 26.92% stake in Singapore-based paper products manufacturer, UPP Holdings Ltd, a company controlled by Singaporean billionaire Peter Lim Eng Hock. Tong acquired 156.786 million shares in the company, marking his first acquisition of a Singapore-listed vehicle. (Financial Daily)
Tune Money is speculated to be one of the candidates to acquire the controlling stake of 74.16% in Oriental Capital Assurance (OCA) from G Team Resources & Holdings. The deal is in the process and should be finalised soon. Bank Negara has already given its green light. The insurance company would provide Tune Money with a stronger platform in the industry and allow it to underwrite the insurance businesses of the Tune Group. (Star Biz)
Kimlun has secured a contract worth RM68.29m from United Malayan Land for the construction of apartments and ancillary buildings in Johor Bahru. The construction work will boost Kimlun’s book order to about RM1.5bn. (Star Biz)
Ngiu Kee Corp Bhd, a financially-distressed operator of supermarkets and departmental stores, says Bursa Securities has rejected its plan to revive its finances. The company faces a delisting if it does not come up with a suitable plan but it said it would submit an appeal on the Bursa decision within a month. (BT)
Philippine conglomerate San Miguel Corp is close to a deal to sell 60% of its banking unit to CIMB Group, with the two agreeing on a final price, the chairman of Bank of Commerce said yesterday. The deal, expected to be finalised this month, will provide San Miguel with fresh funds to close its US$610m purchase of ExxonMobil Corp’s Malaysian assets or new acquisitions such as Philippine Airlines. (Reuters)
Tan Chong Motor Holdings 70%-owned subsidiary, Tan Chong Motor Assemblies, has entered into an agreement to assemble passenger vehicles for TC Subaru. The agreement took effect from yesterday to Dec 31, 2013, with an option for extension. The expected total assembly charges and fees for the term was estimated at RM30.22m. (Star Biz)
HSL: Buys 275-acre land in Samariang for RM25.5mil. Hock Seng Lee Bhd's (HSL) property arm has acquired a 275-acre land in Kuching's northern township of Samariang for RM25.55 million cash. The land is planned for mixed development called Samariang Aman 3, which would generate an estimated gross development value of about RM700 million, its managing director Datuk Paul Yu Chee Hoe said today. He said the proposed project will comprise 1,500 landed residential homes consisting of semi-detached, quadruplex and terraced houses, 2,000 units of affordable housing and 40 units of commerical shophouses. "We anticipate works for Samariang Aman 3 to commence in 2013 and the development will take six to eight years," he said in a statement. (Source: The Star)
PETRONAS: Petronas, BASF seal RM4b pact. Petronas and BASF have taken the next step forward towards realising the announced RM4 billion investment that will expand their partnership in Malaysia. The partnership involves projects at their existing ventures in Kuantan and at a new site within Petronas' proposed Refinery and Petrochemical Integrated Development (Rapid) complex in Pengerang, Johor. These projects are to be implemented between 2015 and 2018. (Source: Business Times)
Perodua may cut production capacity as a last resort if sales continue to decline owing to stricter conditions on hire purchase loans for cars. Its MD Datuk Aminar Rashid Salleh said Perodua was also looking at other measures to address the issue. (Bernama, Malaysian Reserve)
Perodua says it is beginning to see signs of improvement on its sales after experiencing one of the biggest monthly declines early this year. Sales of Perodua models reportedly dropped 11% in January, partly due to higher rejection rates of loan applications following new lending guidelines from Bank Negara Malaysia. The loan application process, which in the past could be approved in as early as one working day, had lengthened to about a week in some cases follow the introduction of the new guidelines in January. "Based on the feedback from our dealers, we are seeing an improvement in the situation now," said Perodua managing director Datuk Aminar Rashid Salleh. (BT)
Takaful Malaysia: Nears deal on Indonesian stake sale. Kuala Lumpur: Syarikat Takaful Malaysia Bhd (Takaful Malaysia) is close to selling a stake in its Indonesian unit to a local partner to expand its distribution network in the republic. Group managing director Datuk Hassan Kamil said the insurer will consider issuing new shares as well. "We recently got another enquiry from a very large local insurance group. They are a close-knit family-run conglomerate," Hassan told Business Times in an exclusive interview recently. (Source: Business Times)
PPB: Sets 3-year capex of RM507m to boost growth. PPB Group Bhd has put aside some RM507 million as capital expenditure (capex) for this year till 2014. The bulk of the capex will go to its grains trading and flour and feed milling businesses managed by its wholly-owned subsidiary FFM Bhd. For this year alone, PPB Group managing director Tan Gee Soi said the company was looking at a capital commitment of up to RM350 million, especially with the launching of new property projects and operation of some of the flour mills in China. (Source: Business Times)
Dijaya Corp: Gets new assets from Danny Tan. Dijaya Corp Bhd will acquire 73 properties held by its largest shareholder Tan Sri Danny Tan for RM949mil, to be satisfied by RM250mil in cash and the issuance of 10-year 2% coupon redeemable convertible unsecured loan stocks over 10 years. It has proposed an equity fund raising of a renounceable rights issue of up to 491 million new shares at RM1.20 each and a bonus issue of up to 122.83 million shares. (Source: The Star)
Power: Petronas will not pay anymore compensation to TNB. Petroliam Nasional Bhd (Petronas) has clarified that it will not be paying anymore compensation to Tenaga Nasional Bhd (TNB) for the cost of alternative fuel used by the national power utility. Its president and chief executive officer Datuk Shamsul Azhar Abbas said the payment (RM1 billion) was supposed to be a "one-off" affair. (Source: The Star)
Timber: Malaysia's timber and timber product exports to rise this year. Malaysia's exports of timber and timber products in 2012 is expected to be better than last year, Plantation Industries and Commodities Minister, Tan Sri Bernard Dompok said today. He said Malaysia exported timber and timber products valued at RM19.8 billion last year and furniture products accounted for RM6.46 billion or 32.6 per cent of total exports. To sustain timber supply, he said, the government had earmarked large scale forest plantations, with 375,000 hectares to be planted over a 15-year period with an allocation of RM1 billion. (Source: The Star)
Bursa Malaysia Derivatives (BMD), which intends to offer innovative options for palm oil futures, plans to introduce dollar-denominated palm olein futures contracts sometime this year. "With this offering, refineries can now hedge the refining margin between crude palm oil (CPO) and palm olein," said Bursa Malaysia Bhd chairman Tun Mohamed Dzaiddin Haji Abdullah. (The Sun Daily)
Bursa Malaysia is banking on cross-border links with other bourses in Southeast Asia to grow instead of costly mergers and acquisitions. The exchange operator’s plan to link up with the Singapore Exchange in mid-2012, followed by Thailand in August, will attract investors to the region that is seen as an emerging market darling, said CEO Datuk Tajuddin Atan. (Reuters)
SapuraCrest Petroleum has received a letter of award from Petronas Carigali for the provision of a tender rig, known as T-9. The project was valued at about US$54m (RM163.4m) including mobilisation fee. (Star Biz)
Technical evaluation stage for the tunnelling scope of MRT SBK line has been completed. Of the total five contenders for the job, only three parties have qualified to proceed to the next stage, being the commercial evaluation. The companies are (i) Gamuda-MMC JV, (ii) Taiseh Corp of Japan, and (iii) one of the two Chinese bidders either Sinohydro or China Railway Construction Corp (CRCC). The companies which were eliminated had various technical issues including the number of tunnel boring machines (TBMs) to be deployed. The commercial evaluation stage is slated to commence by mid Mar-12, with the award to be made shortly after. (Financial Daily)
YTL Communications Sdn Bhd is moving closer to profitability with the launch of its Unlimited Super Postpaid Plans. The company is targeting to get 500k subscribers for the new plans by the end of this year bringing its total Yes subscribers close to 1m, the break-even figure for the company. The Yes Unlimited Super Postpaid Plans comprise four plans with monthly subscription ranging RM48-168. All plans come with unlimited data usage, speed of 20 Mbps and free Yes devices (with commitment). CEO Wing K. Lee said the company was not ruling out any merger and acquisition plans should they make sense. He said, “We are in continuously in discussion with companies, we could do it if it makes sense.” (Star Biz)
Datuk Tong Kooi Ong has taken up a 26.92% stake in Singapore-based paper products manufacturer, UPP Holdings Ltd, a company controlled by Singaporean billionaire Peter Lim Eng Hock. Tong acquired 156.786 million shares in the company, marking his first acquisition of a Singapore-listed vehicle. (Financial Daily)
20120307 1015 Global Market Related News.
Asian Stocks Fall Third Day on Greek Debt Concern, Europe, Australian GDP (Source: Bloomberg)
Asian stocks fell for a third day, with the regional benchmark index (CRY) headed for the lowest close in a month, amid concern about a Greece debt-swap deal and after reports showed Australia’s economy grew less than forecast and European gross domestic product contracted. Sony Corp. (6758), Japan’s No. 1 exporter of consumer electronics that gets one-fifth of its revenue in Europe, slid 2.4 percent. Newcrest Mining Ltd. (NCM) declined 2.8 percent in Sydney, leading mining companies lower after metal and commodity prices dropped. Advantest Corp. (6857), a maker of memory-chip testers, fell 1 percent in Tokyo after the Philadelphia Semiconductor Index, which tracks the performance of 30 industry stocks, lost 0.9 percent yesterday. The MSCI Asia Pacific Index slid 0.8 percent to 124.50 as of 9:58 a.m. in Tokyo, set for the lowest close since Feb. 3. More than six stocks fell for each that rose.
“We are seeing a correction after a rapid rally,” said Hitoshi Asaoka, a Tokyo-based senior strategist at Mizuho Trust & Banking Co. “A major trend in Europe hasn’t changed in that banks strengthen their capital, which leads to a credit crunch and an economic slowdown. The market will remain sensitive to European news flow until Greece makes it through March 20,” a bond redemption date.
Asian Central Banks May Be Nearing End of Interest-Rate Cuts on Oil Risk (Source: Bloomberg)
Central banks in Asia will probably hold off on adding monetary stimulus this week as higher oil prices combine with diminishing concern of a euro-region meltdown to make the case for preserving firepower. South Korea (KORP7DR) and New Zealand (NZOCR) will hold interest rates when the decisions are announced tomorrow, according to all economists surveyed by Bloomberg News. Indonesia (IDBIRATE) will keep its key rate unchanged at 5.75 percent the same day after an unexpected reduction last month, 15 of 16 economists told Bloomberg, while Malaysia (MAOPRATE) will maintain borrowing costs for a fifth meeting a day later, according to 18 of 19 analysts in a separate survey. The 23 percent climb in crude oil in the past six months threatens to heighten inflation pressures in a region that’s seen little slackening in job markets as employers retained workers even with exports slowing.
Signs of improvement in the U.S. job market and Europe’s agreement on a second bailout of Greece have reduced the immediate need for more Asian stimulus. “Growth or inflation risks are not compelling enough to push central banks aggressively in any direction,” said Matt Hildebrandt, an economist at JPMorgan Chase & Co. in Singapore. “On the whole, central banks have probably shifted from growth concerns to being neutral.”
Japanese Stocks Drop for Third Day on Growing Concern Over Greek Debt Deal (Source: Bloomberg)
Japanese stocks fell for a third day, with the Nikkei 225 (NKY) Stock Average headed for a two-week low, amid concern Greece’s debt-swap deal will collapse, threatening the country’s bailout. Sony Corp. (6758), a consumer electronics maker that depends on Europe for a fifth of its sales, fell 2.3 percent after the yen strengthened against the yen. Mitsui & Co., a trading house that counts commodities as its biggest source of income, lost 2.3 percent after oil and metals prices dropped. Nomura Holding Inc., Japan’s biggest brokerage, slid 2.7 percent. “Investors are avoiding risky assets as uncertainty about the global outlook emerges because of the Greek debt issue,” said Hiroichi Nishi, an equities manager in Tokyo at SMBC Nikko Securities Inc. “That’s strengthening the yen and dragging down U.S. and European stocks, with Japanese stocks likely to follow.”
The Nikkei 225 fell 0.9 percent to 9,548.55 as of 9:38 a.m. in Tokyo, headed for its lowest close since Feb. 22. The broader Topix (TPX) Index lost 1 percent to 818.85, with more than four times as many shares declining as advancing. Volume on the gauge was 15 percent higher than the 30-day average.
S&P 500 Caps Biggest Decline in 2012 (Source: Bloomberg)
U.S. stocks slumped, giving the Standard & Poor’s 500 Index its biggest decline this year, as concern grew about the success of a Greece debt-swap deal and after a report showed that the European economy contracted. All 10 groups in the S&P 500 fell as financial, industrial and commodity shares had the biggest losses. Alcoa Inc. (AA), Caterpillar Inc. and Bank of America Corp. decreased more than 3.2 percent. The Morgan Stanley (MS) Cyclical Index of companies most-dependent on economic growth slumped 2.7 percent as 29 of its 30 stocks retreated. Merck & Co. (MRK) dropped 2.6 percent as the drugmaker’s profit forecast trailed analysts’ projections. The S&P 500 decreased 1.5 percent to 1,343.36 at 4 p.m. New York time, falling the most since Dec. 8. The Dow Jones Industrial Average slid 203.66 points, or 1.6 percent, to 12,759.15. About 7.5 billion shares changed hands on U.S. exchanges, or 12 percent above the three-month average.
“Investors typically dislike uncertainty more than they dislike bad news,” Michael Koskuba, who helps oversee $28 billion at Victory Capital Management Inc. in New York, said in a telephone interview. “There’s concern about whether or not there will be enough participants in the Greek debt swap. The fear is that if it doesn’t happen the way most want it to happen, there’s potential for a greater recession in Europe.”
European Stocks Decline Most Since November, Led by Banks (Source: Bloomberg)
European (SXXP) stocks declined, with the Stoxx Europe 600 Index dropping the most since November, as a report confirmed a contraction in the euro-area economy and investors weighed Greece’s chances of getting bondholders to accept a debt swap. Commerzbank AG and Societe Generale SA led a slump in bank shares. Cable & Wireless Worldwide (CW/) Plc retreated 6.7 percent after a newspaper report speculating that a potential bidder won’t make an offer for the company. Nyrstar NV, the largest producer of refined zinc, paced commodity shares lower. The Stoxx 600 (SXXP) declined 2.7 percent to 258.46 at the close in London, for the biggest drop since Nov. 21, as bondholders owning a fifth of Greece’s debt agreed for the exchange, even as the government has set 75 percent participation as the threshold for proceeding with the plan. The benchmark measure has advanced 5.7 percent so far in 2012.
“With the debt-swap deadline approaching and only 20 percent acceptance so far by private investors, it’s easy to understand why market participants are nervous,” said Stephane Ekolo, chief European (SXXP) strategist at Market Securities in London. “We’re realizing once again that we are far from over with the problems.”
Yen Rises Against Most Peers as Greek Debt Concern Prompts Stock Declines (Source: Bloomberg)
The yen rose against most of its 16 major counterparts as Asian stocks fell amid concern over a Greek debt swap, boosting demand for the currency as a refuge. The euro remained lower after the biggest drop in four months versus the yen as the deadline nears for Greece to reach a deal with its creditors over the bond exchange to secure a second bailout package. Demand for the euro was also hampered before the European Central Bank meets tomorrow, where policy makers are expected to keep its interest rate at a record low. Australia’s dollar weakened after a report showed the nation’s economy expanded less than forecast in the fourth quarter. Because of the Greek debt talk, “the market is in risk-off environment, so the yen is more likely to be bought,” said Satoshi Okagawa, a senior global-markets analyst in Singapore at Sumitomo Mitsui Banking Corp., a unit of Japan’s second-largest banking group by market value. “It’s quite possible that the yen will strengthen beyond 80 per dollar.”
Treasuries Snap Rally on Speculation Industry Report to Show Jobs Growth (Source: Bloomberg)
Treasuries snapped yesterday’s biggest rally this year on speculation an industry report today will show U.S. jobs growth quickened last month. Government securities also halted their gain before the U.S. announces tomorrow the sizes of three auctions next week of coupon-bearing debt. ADP Employer Services may say companies in the U.S. added 215,000 workers in February, versus 170,000 in January, according to a Bloomberg News survey of economists. Ten-year yields rose one basis point to 1.96 percent as of 10:16 a.m. in Tokyo, according to Bloomberg Bond Trader prices. The 2 percent security due in February 2022 fell 3/32, or 94 cents per $1,000 face amount, to 100 13/32. The rate slid seven basis points yesterday, or 0.07 percentage point, the most since Dec. 28. The record low was 1.67 percent set Sept. 23.
“Treasuries are very expensive,” said Tsutomu Komiya, who helps oversee the equivalent of $114.8 billion as an investor in Tokyo at Daiwa Asset Management Co., a unit of Japan’s second- biggest brokerage by market value. “The U.S. economy is improving. The labor market is warming.”
China May Expand Property-Tax Trials Beyond Cities of Shanghai, Chongqing (Source: Bloomberg)
Chinese Finance Minister Xie Xuren said the nation may expand property-tax trials, as the government prolongs efforts to cool the real-estate market, make housing affordable and limit asset bubbles. Taxes can guide housing demand, Xie said at a press briefing in Beijing today during the annual meeting of the National People’s Congress, without saying where more tests could take place. So far, the government has pilot projects in Shanghai and Chongqing. China’s benchmark stock index fell the most in a month today after the government yesterday set a lower economic growth target for this year than 2011 and officials reiterated that curbs on the real-estate market would stay. Anhui Conch Cement Co. (914), the nation’s biggest maker of the building material, tumbled 4.4 percent as property developer China Vanke Co. (200002)’s sales slumped.
“There is agreement among the authorities that a property tax is one mechanism that can prevent asset bubbles in the long run,” said Yao Wei, a Hong Kong-based economist for Societe Generale SA. Xie’s comments are “confirmation that they are going to do it on a wider scale,” she said.
Australia’s GDP Grows at Half the Pace Economists Forecast; Currency Drops (Source: Bloomberg)
Australia’s economy expanded at half the pace economists forecast last quarter as a housing construction slump slowed growth, sending the currency to a six- week low. Fourth-quarter gross domestic product advanced 0.4 percent from the previous three months, when it rose a revised 0.8 percent that was weaker than previously reported, a Bureau of Statistics report released in Sydney today showed. The result compared with the median of 25 estimates in a Bloomberg News survey for a 0.8 percent gain. The report covers a period when Europe’s sovereign-debt crisis weighed on Asian demand for commodities that prompted Reserve Bank Governor Glenn Stevens to make back-to-back interest-rate cuts for the first time since 2009. He held rates yesterday as a A$456 billion ($480 billion) pipeline of resource projects driven by companies such as BHP Billiton Ltd. (BHP) cushions a slump in manufacturing and services hit by a strong currency.
“We’ve seen weaker profits and slower wages drag down income growth,” said Joshua Williamson, a senior economist at Citigroup Inc. in Sydney, who predicted a 0.6 percent gain. “Some companies have struggled with the high Aussie dollar and others are battling to reduce costs in a weak productivity environment.”
Euro-Region Economy Shrank in Fourth Quarter as Investment, Exports Fell (Source: Bloomberg)
Europe’s economy contracted in the fourth quarter as investment declined by the most since 2009 and exports and consumer spending dropped. Gross domestic product shrank 0.3 percent from the third quarter, the European Union’s statistics office said today, confirming an estimate published on Feb. 15. Exports fell 0.4 percent after a 1.4 percent gain in the previous three months, while household spending declined 0.4 percent and investment dropped 0.7 percent. While Europe is facing its second recession in less than three years, the economy shows “tentative signs of stabilization,” European Central Bank President Mario Draghi has said. ECB efforts to pump cash into the economy have helped ease concern about a credit crunch and won governments time to agree on measures to contain the debt crisis.
“The region is still facing major headwinds, notably including increased fiscal tightening in many countries and markedly rising unemployment,” said Howard Archer, chief European economist at IHS Global Insight in London. “Despite some recent overall improvement in euro zone surveys and evidence that Germany is returning to growth, we doubt that the euro zone will be able to avoid further contraction in the first quarter of 2012 and very possibly the second.’”
Brazil’s GDP Growth of 2.7% Last Year Underperformed BRIC Peers: Economy (Source: Bloomberg)
Brazil’s economy last year registered its second-worst performance since 2003 as higher borrowing costs and a currency that rallied to a 12-year high led it to underperform emerging-market peers China and India. Gross domestic product expanded 2.7 percent even after growth accelerated in the fourth quarter, the national statistics agency said today in Rio de Janeiro. The median estimate of 32 economists surveyed by Bloomberg was for the economy to grow 2.8 percent. The GDP figure underscores central bank President Alexandre Tombini’s view that the economy is growing below capacity amid Europe’s debt crisis, reinforcing bets that the central bank may accelerate the pace of interest-rate cuts tomorrow. Growth in Latin America’s biggest economy will gain speed and grow 4.5 percent this year, Finance Minister Guido Mantega said today.
“Brazil is losing international competitiveness,” John Welch, chief strategist for CIBC World Markets, the investment- banking arm of Canada’s fifth-largest bank, said by phone from New York. “They’re blaming all the problems on the exchange rate, but have ignored structural reforms.”
SocGen Joins Generali Taking Part in Greece’s Debt Swap Offer (Source: Bloomberg)
Societe Generale SA (GLE), France’s second-biggest bank, Assicurazioni Generali SpA and UniCredit SpA (UCG) joined firms saying they would participate in Greece’s debt swap as the country threatened to compel holdouts to take part. Greece’s six largest banks also plan to accept the offer, the country’s Finance Ministry said in a statement late yesterday. The lenders are among the biggest private holders of the nation’s sovereign debt, data compiled by Bloomberg show, making them crucial to the success of the exchange. The Greek government, which set a 75 percent participation rate as a threshold for proceeding with the transaction, said it will use collective action clauses to force holders of Greek-law bonds to accept the swap if it receives sufficient consent from investors. The goal of the exchange, which runs through March 8, is to reduce the 206 billion euros ($270 billion) of privately held Greek debt by 53.5 percent, helping avert a disorderly default that could roil markets and fuel contagion.
“It’s in the interest of the private creditors as well as international stability,” French European Affairs Minister Jean Leonetti said yesterday in an interview in Paris. “All private creditors know it’s better to lose a little to win a lot rather than lose a lot later and win nothing.”
U.K. House Prices Decline as Recovery Concerns Weigh on Consumers: Economy (Source: Bloomberg)
U.K. house prices fell for a third month in four in February and retail sales declined as economic uncertainty weighed on Britons’ spending. Home prices dropped 0.5 percent from January to an average 160,118 pounds ($252,600), Lloyds Banking Group Plc (LLOY)’s Halifax mortgage-lending unit said in a statement in London today. A separate report from the British Retail Consortium showed sales at stores open at least 12 months decreased 0.3 percent last month from a year earlier. While inflation is cooling, a recovery in consumer confidence is being kept in check by government job cuts and concern about the impact of Europe’s debt crisis on Britain’s economy. Housing demand may come under further pressure after a property-tax exemption ends this month and Halifax, the U.K.’s No. 1 mortgage provider, and two other lenders move to raise interest rates for some of their home-loan products.
“It is hard to be optimistic about the house-price outlook,” said Ed Stansfield, a property economist at Capital Economics Ltd. in London. “With mortgage interest rates edging up again and unemployment still rising, the downward trend in prices is likely to become entrenched this year.”
Investors Holding 20% of Greek Debt for 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. European officials are pressing investors to swallow the writedowns to avert even greater losses. The participating firms include some of Greece’s biggest creditors, including National Bank of Greece SA, Alpha Bank SA (ALPHA), BNP Paribas SA (BNP) and Commerzbank AG. (CBK) The goal of the swap, which runs through March 8, is to reduce by 53.5 percent the total of privately held Greek debt, helping avert an uncontrolled default that could roil markets and spur contagion to states such as Portugal.
“It’s in the interest of the private creditors as well as the international stability,” French European Affairs Minister Jean Leonetti said today in an interview in Paris. “All private creditors know it’s better to lose a little to win a lot rather than lose a lot later and win nothing. It’s better to lose 107 billion and win after in a more stable market.”
Asian stocks fell for a third day, with the regional benchmark index (CRY) headed for the lowest close in a month, amid concern about a Greece debt-swap deal and after reports showed Australia’s economy grew less than forecast and European gross domestic product contracted. Sony Corp. (6758), Japan’s No. 1 exporter of consumer electronics that gets one-fifth of its revenue in Europe, slid 2.4 percent. Newcrest Mining Ltd. (NCM) declined 2.8 percent in Sydney, leading mining companies lower after metal and commodity prices dropped. Advantest Corp. (6857), a maker of memory-chip testers, fell 1 percent in Tokyo after the Philadelphia Semiconductor Index, which tracks the performance of 30 industry stocks, lost 0.9 percent yesterday. The MSCI Asia Pacific Index slid 0.8 percent to 124.50 as of 9:58 a.m. in Tokyo, set for the lowest close since Feb. 3. More than six stocks fell for each that rose.
“We are seeing a correction after a rapid rally,” said Hitoshi Asaoka, a Tokyo-based senior strategist at Mizuho Trust & Banking Co. “A major trend in Europe hasn’t changed in that banks strengthen their capital, which leads to a credit crunch and an economic slowdown. The market will remain sensitive to European news flow until Greece makes it through March 20,” a bond redemption date.
Asian Central Banks May Be Nearing End of Interest-Rate Cuts on Oil Risk (Source: Bloomberg)
Central banks in Asia will probably hold off on adding monetary stimulus this week as higher oil prices combine with diminishing concern of a euro-region meltdown to make the case for preserving firepower. South Korea (KORP7DR) and New Zealand (NZOCR) will hold interest rates when the decisions are announced tomorrow, according to all economists surveyed by Bloomberg News. Indonesia (IDBIRATE) will keep its key rate unchanged at 5.75 percent the same day after an unexpected reduction last month, 15 of 16 economists told Bloomberg, while Malaysia (MAOPRATE) will maintain borrowing costs for a fifth meeting a day later, according to 18 of 19 analysts in a separate survey. The 23 percent climb in crude oil in the past six months threatens to heighten inflation pressures in a region that’s seen little slackening in job markets as employers retained workers even with exports slowing.
Signs of improvement in the U.S. job market and Europe’s agreement on a second bailout of Greece have reduced the immediate need for more Asian stimulus. “Growth or inflation risks are not compelling enough to push central banks aggressively in any direction,” said Matt Hildebrandt, an economist at JPMorgan Chase & Co. in Singapore. “On the whole, central banks have probably shifted from growth concerns to being neutral.”
Japanese Stocks Drop for Third Day on Growing Concern Over Greek Debt Deal (Source: Bloomberg)
Japanese stocks fell for a third day, with the Nikkei 225 (NKY) Stock Average headed for a two-week low, amid concern Greece’s debt-swap deal will collapse, threatening the country’s bailout. Sony Corp. (6758), a consumer electronics maker that depends on Europe for a fifth of its sales, fell 2.3 percent after the yen strengthened against the yen. Mitsui & Co., a trading house that counts commodities as its biggest source of income, lost 2.3 percent after oil and metals prices dropped. Nomura Holding Inc., Japan’s biggest brokerage, slid 2.7 percent. “Investors are avoiding risky assets as uncertainty about the global outlook emerges because of the Greek debt issue,” said Hiroichi Nishi, an equities manager in Tokyo at SMBC Nikko Securities Inc. “That’s strengthening the yen and dragging down U.S. and European stocks, with Japanese stocks likely to follow.”
The Nikkei 225 fell 0.9 percent to 9,548.55 as of 9:38 a.m. in Tokyo, headed for its lowest close since Feb. 22. The broader Topix (TPX) Index lost 1 percent to 818.85, with more than four times as many shares declining as advancing. Volume on the gauge was 15 percent higher than the 30-day average.
S&P 500 Caps Biggest Decline in 2012 (Source: Bloomberg)
U.S. stocks slumped, giving the Standard & Poor’s 500 Index its biggest decline this year, as concern grew about the success of a Greece debt-swap deal and after a report showed that the European economy contracted. All 10 groups in the S&P 500 fell as financial, industrial and commodity shares had the biggest losses. Alcoa Inc. (AA), Caterpillar Inc. and Bank of America Corp. decreased more than 3.2 percent. The Morgan Stanley (MS) Cyclical Index of companies most-dependent on economic growth slumped 2.7 percent as 29 of its 30 stocks retreated. Merck & Co. (MRK) dropped 2.6 percent as the drugmaker’s profit forecast trailed analysts’ projections. The S&P 500 decreased 1.5 percent to 1,343.36 at 4 p.m. New York time, falling the most since Dec. 8. The Dow Jones Industrial Average slid 203.66 points, or 1.6 percent, to 12,759.15. About 7.5 billion shares changed hands on U.S. exchanges, or 12 percent above the three-month average.
“Investors typically dislike uncertainty more than they dislike bad news,” Michael Koskuba, who helps oversee $28 billion at Victory Capital Management Inc. in New York, said in a telephone interview. “There’s concern about whether or not there will be enough participants in the Greek debt swap. The fear is that if it doesn’t happen the way most want it to happen, there’s potential for a greater recession in Europe.”
European Stocks Decline Most Since November, Led by Banks (Source: Bloomberg)
European (SXXP) stocks declined, with the Stoxx Europe 600 Index dropping the most since November, as a report confirmed a contraction in the euro-area economy and investors weighed Greece’s chances of getting bondholders to accept a debt swap. Commerzbank AG and Societe Generale SA led a slump in bank shares. Cable & Wireless Worldwide (CW/) Plc retreated 6.7 percent after a newspaper report speculating that a potential bidder won’t make an offer for the company. Nyrstar NV, the largest producer of refined zinc, paced commodity shares lower. The Stoxx 600 (SXXP) declined 2.7 percent to 258.46 at the close in London, for the biggest drop since Nov. 21, as bondholders owning a fifth of Greece’s debt agreed for the exchange, even as the government has set 75 percent participation as the threshold for proceeding with the plan. The benchmark measure has advanced 5.7 percent so far in 2012.
“With the debt-swap deadline approaching and only 20 percent acceptance so far by private investors, it’s easy to understand why market participants are nervous,” said Stephane Ekolo, chief European (SXXP) strategist at Market Securities in London. “We’re realizing once again that we are far from over with the problems.”
Yen Rises Against Most Peers as Greek Debt Concern Prompts Stock Declines (Source: Bloomberg)
The yen rose against most of its 16 major counterparts as Asian stocks fell amid concern over a Greek debt swap, boosting demand for the currency as a refuge. The euro remained lower after the biggest drop in four months versus the yen as the deadline nears for Greece to reach a deal with its creditors over the bond exchange to secure a second bailout package. Demand for the euro was also hampered before the European Central Bank meets tomorrow, where policy makers are expected to keep its interest rate at a record low. Australia’s dollar weakened after a report showed the nation’s economy expanded less than forecast in the fourth quarter. Because of the Greek debt talk, “the market is in risk-off environment, so the yen is more likely to be bought,” said Satoshi Okagawa, a senior global-markets analyst in Singapore at Sumitomo Mitsui Banking Corp., a unit of Japan’s second-largest banking group by market value. “It’s quite possible that the yen will strengthen beyond 80 per dollar.”
Treasuries Snap Rally on Speculation Industry Report to Show Jobs Growth (Source: Bloomberg)
Treasuries snapped yesterday’s biggest rally this year on speculation an industry report today will show U.S. jobs growth quickened last month. Government securities also halted their gain before the U.S. announces tomorrow the sizes of three auctions next week of coupon-bearing debt. ADP Employer Services may say companies in the U.S. added 215,000 workers in February, versus 170,000 in January, according to a Bloomberg News survey of economists. Ten-year yields rose one basis point to 1.96 percent as of 10:16 a.m. in Tokyo, according to Bloomberg Bond Trader prices. The 2 percent security due in February 2022 fell 3/32, or 94 cents per $1,000 face amount, to 100 13/32. The rate slid seven basis points yesterday, or 0.07 percentage point, the most since Dec. 28. The record low was 1.67 percent set Sept. 23.
“Treasuries are very expensive,” said Tsutomu Komiya, who helps oversee the equivalent of $114.8 billion as an investor in Tokyo at Daiwa Asset Management Co., a unit of Japan’s second- biggest brokerage by market value. “The U.S. economy is improving. The labor market is warming.”
China May Expand Property-Tax Trials Beyond Cities of Shanghai, Chongqing (Source: Bloomberg)
Chinese Finance Minister Xie Xuren said the nation may expand property-tax trials, as the government prolongs efforts to cool the real-estate market, make housing affordable and limit asset bubbles. Taxes can guide housing demand, Xie said at a press briefing in Beijing today during the annual meeting of the National People’s Congress, without saying where more tests could take place. So far, the government has pilot projects in Shanghai and Chongqing. China’s benchmark stock index fell the most in a month today after the government yesterday set a lower economic growth target for this year than 2011 and officials reiterated that curbs on the real-estate market would stay. Anhui Conch Cement Co. (914), the nation’s biggest maker of the building material, tumbled 4.4 percent as property developer China Vanke Co. (200002)’s sales slumped.
“There is agreement among the authorities that a property tax is one mechanism that can prevent asset bubbles in the long run,” said Yao Wei, a Hong Kong-based economist for Societe Generale SA. Xie’s comments are “confirmation that they are going to do it on a wider scale,” she said.
Australia’s GDP Grows at Half the Pace Economists Forecast; Currency Drops (Source: Bloomberg)
Australia’s economy expanded at half the pace economists forecast last quarter as a housing construction slump slowed growth, sending the currency to a six- week low. Fourth-quarter gross domestic product advanced 0.4 percent from the previous three months, when it rose a revised 0.8 percent that was weaker than previously reported, a Bureau of Statistics report released in Sydney today showed. The result compared with the median of 25 estimates in a Bloomberg News survey for a 0.8 percent gain. The report covers a period when Europe’s sovereign-debt crisis weighed on Asian demand for commodities that prompted Reserve Bank Governor Glenn Stevens to make back-to-back interest-rate cuts for the first time since 2009. He held rates yesterday as a A$456 billion ($480 billion) pipeline of resource projects driven by companies such as BHP Billiton Ltd. (BHP) cushions a slump in manufacturing and services hit by a strong currency.
“We’ve seen weaker profits and slower wages drag down income growth,” said Joshua Williamson, a senior economist at Citigroup Inc. in Sydney, who predicted a 0.6 percent gain. “Some companies have struggled with the high Aussie dollar and others are battling to reduce costs in a weak productivity environment.”
Euro-Region Economy Shrank in Fourth Quarter as Investment, Exports Fell (Source: Bloomberg)
Europe’s economy contracted in the fourth quarter as investment declined by the most since 2009 and exports and consumer spending dropped. Gross domestic product shrank 0.3 percent from the third quarter, the European Union’s statistics office said today, confirming an estimate published on Feb. 15. Exports fell 0.4 percent after a 1.4 percent gain in the previous three months, while household spending declined 0.4 percent and investment dropped 0.7 percent. While Europe is facing its second recession in less than three years, the economy shows “tentative signs of stabilization,” European Central Bank President Mario Draghi has said. ECB efforts to pump cash into the economy have helped ease concern about a credit crunch and won governments time to agree on measures to contain the debt crisis.
“The region is still facing major headwinds, notably including increased fiscal tightening in many countries and markedly rising unemployment,” said Howard Archer, chief European economist at IHS Global Insight in London. “Despite some recent overall improvement in euro zone surveys and evidence that Germany is returning to growth, we doubt that the euro zone will be able to avoid further contraction in the first quarter of 2012 and very possibly the second.’”
Brazil’s GDP Growth of 2.7% Last Year Underperformed BRIC Peers: Economy (Source: Bloomberg)
Brazil’s economy last year registered its second-worst performance since 2003 as higher borrowing costs and a currency that rallied to a 12-year high led it to underperform emerging-market peers China and India. Gross domestic product expanded 2.7 percent even after growth accelerated in the fourth quarter, the national statistics agency said today in Rio de Janeiro. The median estimate of 32 economists surveyed by Bloomberg was for the economy to grow 2.8 percent. The GDP figure underscores central bank President Alexandre Tombini’s view that the economy is growing below capacity amid Europe’s debt crisis, reinforcing bets that the central bank may accelerate the pace of interest-rate cuts tomorrow. Growth in Latin America’s biggest economy will gain speed and grow 4.5 percent this year, Finance Minister Guido Mantega said today.
“Brazil is losing international competitiveness,” John Welch, chief strategist for CIBC World Markets, the investment- banking arm of Canada’s fifth-largest bank, said by phone from New York. “They’re blaming all the problems on the exchange rate, but have ignored structural reforms.”
SocGen Joins Generali Taking Part in Greece’s Debt Swap Offer (Source: Bloomberg)
Societe Generale SA (GLE), France’s second-biggest bank, Assicurazioni Generali SpA and UniCredit SpA (UCG) joined firms saying they would participate in Greece’s debt swap as the country threatened to compel holdouts to take part. Greece’s six largest banks also plan to accept the offer, the country’s Finance Ministry said in a statement late yesterday. The lenders are among the biggest private holders of the nation’s sovereign debt, data compiled by Bloomberg show, making them crucial to the success of the exchange. The Greek government, which set a 75 percent participation rate as a threshold for proceeding with the transaction, said it will use collective action clauses to force holders of Greek-law bonds to accept the swap if it receives sufficient consent from investors. The goal of the exchange, which runs through March 8, is to reduce the 206 billion euros ($270 billion) of privately held Greek debt by 53.5 percent, helping avert a disorderly default that could roil markets and fuel contagion.
“It’s in the interest of the private creditors as well as international stability,” French European Affairs Minister Jean Leonetti said yesterday in an interview in Paris. “All private creditors know it’s better to lose a little to win a lot rather than lose a lot later and win nothing.”
U.K. House Prices Decline as Recovery Concerns Weigh on Consumers: Economy (Source: Bloomberg)
U.K. house prices fell for a third month in four in February and retail sales declined as economic uncertainty weighed on Britons’ spending. Home prices dropped 0.5 percent from January to an average 160,118 pounds ($252,600), Lloyds Banking Group Plc (LLOY)’s Halifax mortgage-lending unit said in a statement in London today. A separate report from the British Retail Consortium showed sales at stores open at least 12 months decreased 0.3 percent last month from a year earlier. While inflation is cooling, a recovery in consumer confidence is being kept in check by government job cuts and concern about the impact of Europe’s debt crisis on Britain’s economy. Housing demand may come under further pressure after a property-tax exemption ends this month and Halifax, the U.K.’s No. 1 mortgage provider, and two other lenders move to raise interest rates for some of their home-loan products.
“It is hard to be optimistic about the house-price outlook,” said Ed Stansfield, a property economist at Capital Economics Ltd. in London. “With mortgage interest rates edging up again and unemployment still rising, the downward trend in prices is likely to become entrenched this year.”
Investors Holding 20% of Greek Debt for 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. European officials are pressing investors to swallow the writedowns to avert even greater losses. The participating firms include some of Greece’s biggest creditors, including National Bank of Greece SA, Alpha Bank SA (ALPHA), BNP Paribas SA (BNP) and Commerzbank AG. (CBK) The goal of the swap, which runs through March 8, is to reduce by 53.5 percent the total of privately held Greek debt, helping avert an uncontrolled default that could roil markets and spur contagion to states such as Portugal.
“It’s in the interest of the private creditors as well as the international stability,” French European Affairs Minister Jean Leonetti said today in an interview in Paris. “All private creditors know it’s better to lose a little to win a lot rather than lose a lot later and win nothing. It’s better to lose 107 billion and win after in a more stable market.”
20120307 1013 Soy Oil & Palm Oil Related News.
Two speakers at the Palm and Lauric Oils Conference and Exhibition (POC 2012), Carotino Sdn Bhd executive director U.R. Unnithan and Nutrition GmBH vice-president Harald Sauthoff have forecast this year's CPO price would trade between RM3,100 and RM3,440 per tonne. Unnithan pointed out that if the Malaysian Government did not address the current local duty disadvantage compared with Indonesia's low palm oil export duty scheme, Malaysia's closing palm oil stocks could increase to 2.6m tonnes, thus putting pressure on CPO price to drop to possibly RM2,500 per tonne. He added that the local biodiesel industry could only be revived through government intervention to boost domestic consumption and create a level playing field with Indonesia. (StarBiz)
Malaysia is looking at constructive ways to assist palm oil downstream players counter Indonesia's new lower tax structure, which has affected 40% of local smallholders. Plantation Industries and Commodities Minister Tan Sri Bernard Dompok said both Malaysia and Indonesia are still in talks to address the issues. (Bernama)
Soybeans (Source: CME)
US soybean prices end higher, rebounding after opening lower as optimism about export demand outweighs macro issues including a stronger US dollar and concerns about slower Chinese economic growth. Those concerns sparked a broader commodities sell-off. Markets still optimistic about Chinese soybean purchases from the US, with expectations for a smaller South American crop due to drought in Brazil. Price rise comes after a fall in soybean prices yesterday ended a two-week rally. CBOT May soybeans end up 10 1/4c at $13.35 1/4 a bushel.
Soybean Meal/Oil (Source: CME)
May soybean oil ends down 0.45c to 53.28c/lb. May soybean meal ends up $7.70 to $365.90 a short ton.
Palm oil slips for 3rd day; market seen overbought
KUALA LUMPUR, March 6 (Reuters) - Malaysian crude palm oil futures fell for a third day on Tuesday, on signs of a wider correction in the market that traders say went up too high last month, although losses were curbed ahead of a key price outlook meeting in Kuala Lumpur.
"The palm oil market is overbought and there should be a greater correction coming in," a trader with a foreign commodities brokerage said at the sidelines of the conference.
India's Feb oilmeal exports down 33 pct y/y-trade body
MUMBAI, March 6 (Reuters) - India's oilmeal exports fell 33 percent to 470,504 tonnes in February compared to a year ago, a leading trade body said on Tuesday, dragged down by a ban on the country's oilmeal imports by China.
Soymeal exports, which account for the bulk of India's oilmeal sales, were at 329,180 tonnes in February, down 39 percent from a year ago, the Solvent Extractors' Association of India said in a statement.
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.
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.
Oil World sees firmer soyoil, palm oil prices
HAMBURG, March 6 (Reuters) - Global soyoil and palm oil prices are expected to firm in coming months partly because of poor South American soybean harvests coupled with high soyoil-based biodiesel output in Brazil and Argentina, Hamburg-based oilseeds analysts Oil World said on Tuesday.
"The further increase in South American biodiesel production despite the sharply reduced soybean production will erode South American soyoil exports," it said. "This will further raise the global dependence on palm oil and contribute to appreciating prices of soyoil, palm oil and other oils and fats."
South American drought is expected to cut global soybean supplies while there will be a smaller year-on-year increase in world palm oil production in April/September 2012 than in the same period in 2011, it said.
Argentina is forecast by Oil World to raise Jan/Dec 2012 biodiesel production using soyoil as feedstock to 3.0 million tonnes from 2.4 million tonnes in 2011.
Brazil will also raise biodiesel output, it said, so restraining soyoil exports and transferring more demand to palm oil.
For Jan./June 2012 it forecasts average prices for refined, bleached and deodorised (RBD) palm oil will approach $1,200 a tonne against $1,105 on Tuesday.
Soyoil prices fob Argentina may rise to or above $1,260 a tonne against current levels of around $1,205 a tonne, it said.
Malaysia is looking at constructive ways to assist palm oil downstream players counter Indonesia's new lower tax structure, which has affected 40% of local smallholders. Plantation Industries and Commodities Minister Tan Sri Bernard Dompok said both Malaysia and Indonesia are still in talks to address the issues. (Bernama)
Soybeans (Source: CME)
US soybean prices end higher, rebounding after opening lower as optimism about export demand outweighs macro issues including a stronger US dollar and concerns about slower Chinese economic growth. Those concerns sparked a broader commodities sell-off. Markets still optimistic about Chinese soybean purchases from the US, with expectations for a smaller South American crop due to drought in Brazil. Price rise comes after a fall in soybean prices yesterday ended a two-week rally. CBOT May soybeans end up 10 1/4c at $13.35 1/4 a bushel.
Soybean Meal/Oil (Source: CME)
May soybean oil ends down 0.45c to 53.28c/lb. May soybean meal ends up $7.70 to $365.90 a short ton.
Palm oil slips for 3rd day; market seen overbought
KUALA LUMPUR, March 6 (Reuters) - Malaysian crude palm oil futures fell for a third day on Tuesday, on signs of a wider correction in the market that traders say went up too high last month, although losses were curbed ahead of a key price outlook meeting in Kuala Lumpur.
"The palm oil market is overbought and there should be a greater correction coming in," a trader with a foreign commodities brokerage said at the sidelines of the conference.
India's Feb oilmeal exports down 33 pct y/y-trade body
MUMBAI, March 6 (Reuters) - India's oilmeal exports fell 33 percent to 470,504 tonnes in February compared to a year ago, a leading trade body said on Tuesday, dragged down by a ban on the country's oilmeal imports by China.
Soymeal exports, which account for the bulk of India's oilmeal sales, were at 329,180 tonnes in February, down 39 percent from a year ago, the Solvent Extractors' Association of India said in a statement.
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.
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.
Oil World sees firmer soyoil, palm oil prices
HAMBURG, March 6 (Reuters) - Global soyoil and palm oil prices are expected to firm in coming months partly because of poor South American soybean harvests coupled with high soyoil-based biodiesel output in Brazil and Argentina, Hamburg-based oilseeds analysts Oil World said on Tuesday.
"The further increase in South American biodiesel production despite the sharply reduced soybean production will erode South American soyoil exports," it said. "This will further raise the global dependence on palm oil and contribute to appreciating prices of soyoil, palm oil and other oils and fats."
South American drought is expected to cut global soybean supplies while there will be a smaller year-on-year increase in world palm oil production in April/September 2012 than in the same period in 2011, it said.
Argentina is forecast by Oil World to raise Jan/Dec 2012 biodiesel production using soyoil as feedstock to 3.0 million tonnes from 2.4 million tonnes in 2011.
Brazil will also raise biodiesel output, it said, so restraining soyoil exports and transferring more demand to palm oil.
For Jan./June 2012 it forecasts average prices for refined, bleached and deodorised (RBD) palm oil will approach $1,200 a tonne against $1,105 on Tuesday.
Soyoil prices fob Argentina may rise to or above $1,260 a tonne against current levels of around $1,205 a tonne, it said.
20120307 1014 Global Commodities Related News.
Commodities Head for Biggest 2012 Decline (Source: Bloomberg)
Commodity prices posted their biggest drop this year on signs that slowing global economies will erode demand for raw materials. The Standard & Poor’s GSCI Spot Index of 24 commodities dropped 1.5 percent to close at 692.61 in New York, the biggest loss since Dec. 14. Declines were paced by arabica coffee, which dropped to the lowest since October 2010. Lead tumbled as much as 4.1 percent, and gold touched a five-week low. European economies shrunk in the fourth quarter and U.K. retail sales slid for a second month in February, separate reports showed today. China, the world’s biggest consumer of everything from aluminum to cotton to soybeans, yesterday lowered its economic-growth target. Commodities may face a “sizable” correction as the global expansion cools, INTL FCStone Inc. said yesterday.
“Across the board, it’s just a panic,” Harry Denny, a broker at Hoboken, New Jersey-based PVM Futures Inc., said in a telephone interview. “China is just so important for commodities. We knew there was a slowdown coming, but we just hadn’t heard it, and when we heard it, a lot of guys went running.”
USDA seen lowering S.America crop forecasts
CHICAGO, March 6 (Reuters) - Hot and dry weather should prompt the U.S. Department of Agriculture to lower its forecasts of the corn and soybean crops in Brazil and Argentina, moves that would signal increased export demand for U.S. supplies, analysts said.
"I'm expecting increasing old-crop (U.S.) export demand because of these past few months of deteriorating South American corn and soybeans prospects," said Jerry Gidel, grains analyst with Rice Dairy, a Chicago-based brokerage house.
Australia set for another year of bumper grains harvest
CANBERRA, March 6 (Reuters) - Australia is on track for another year of bumper grains and oilseed harvests with ideal growing condition forecast to boost production this year, which could add pressure on global prices.
Even though Australian farmers will reduce wheat plantings in 2012/13 in response to lower global prices, the world's fourth-largest exporter is expected to produce an above average crop after two straight years of record output, according to the Australian Bureau of Agricultural and Resource Economics and Sciences (ABARES).
Corn (Source: CME)
US corn futures end lower, falling along with other commodities on a stronger dollar and concerns about Chinese economic growth and Greek fiscal woes. Corn is also pressured by the head of China's State Grain Administration saying overnight that corn imports are unlikely to rise sharply in the next two years. "Corn took a bit of general selling as the entire market basket of commodities got whacked good and proper today," said Charlie Sernatinger, analyst at brokerage ABN Amro. CBOT May corn, the most actively traded month, falls 6 3/4c, or 1.0%, to $6.54. March corn falls 8 1/4c to $6.58.
Wheat (Source: CME)
US wheat futures end down amid a broader commodities selloff, falling on macroeconomic concerns and a stronger US dollar. Markets are concerned about slower Chinese economic growth and Greece's fiscal woes. "That pressured everything...and so that spilled over into our grain markets, especially our wheat," says Larry Glenn, broker for Frontier Ag. Wheat fundamentals also remain weak, with large global supplies. CBOT May wheat, the most heavily traded month, fell 14 1/4c to $6.57 3/4 a bushel, while KCBT May wheat dropped 18c to $6.98 and MGEX May fell 16c to $8.18 3/4
Rice (Source: CME)
US rice futures end lower, following other commodities down on a stronger dollar and concerns about Chinese and European economic growth. Poor export demand still weighs as well, though losses are limited by a need for high enough prices to prevent farmers from planting other crops in place of rice. CBOT May rice, the most active month, ends down 9c at $14.25 1/2 per hundredweight.
Soy, corn drop, but still near multi-month peaks
SINGAPORE, March 6 (Reuters) - U.S. grains futures pulled back on Tuesday, hurt by a firmer dollar, although corn and soybeans stayed near multi-month highs on expectations of strong export demand and tight supplies.
"Fundamentally soy and corn tend to be well supported. Demand is certainly still there for soybeans and you've also got the supply side shocks from the weather in Brazil," said Victor Thianpiriya, agricultural analyst at Australia and New Zealand Bank.
Australia's GrainCorp sees exports at 9 mln T in 2011/12
CANBERRA, March 6 (Reuters) - Australia's GrainCorp expects to export around 9 million tonnes of grain in the year to September 2012, up from 8 million tonnes last year and about double its annual exports in a normal year.
Alison Watkins, chief executive at GrainCorp, said she was optimistic about the country's 2012/13 wheat crop thanks to favourable growing conditions.
China says won't import large corn volumes
BEIJING, March 6 (Reuters) - China will not need to import large volumes of corn as domestic supply is sufficient to meet demand, the head of the State Grain Administration (SGA) told reporters on Tuesday.
"We will not import corn by a large volume. Corn is not an agriculture product which China is short of," SGA director Nie Zhengbang told reporters on the sidelines of China's annual parliamentary session.
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.
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.
Vietnam Q1 rice exports may fall 44.4 pct y/y - govt
HANOI, March 5 (Reuters) - Rice exports from Vietnam, the world's second-largest exporter of the grain after Thailand, could fall 44.4 percent in the three months ending March from a year earlier to 1 million tonnes, a government report said on Monday.
The decline was alarming as many importers had no plans to buy, Vietnam Food Association Deputy Chairman Pham Van Bay was quoted as saying in the report in the government's online newspaper
Official: China Grain Output Can Increase Gradually In Medium, Long Term (Source: CME)
China will be able to realize gradual medium- and long-term grain output increases, as yields are expected to rise in tandem with improving technologies, a senior agricultural official said. Nevertheless, an output decline in 2012 can't be ruled out after China's grain production increased for an eighth consecutive year in 2011, Chen Xiwen, general director of the Office of the Central Rural Work Leading Group, told a press conference. Chen also said China's government is encouraging the research and development of genetically modified organisms, but will be very prudent in the application of GMO technologies in key grains, which include rice and wheat.
Wheat Falls Most in Two Weeks on ‘Significant’ U.S. Rainfall; Corn Drops (Source: Bloomberg)
Wheat dropped the most in two weeks in Chicago on speculation precipitation in the U.S. southern Plains and “significant” rains in the northern Plains will boost crop prospects. Corn declined. Rain this week will help plants in Kansas, the second- biggest U.S. wheat grower, and in Oklahoma, Commodity Weather Group said in an e-mailed report today. About six times the normal amount of precipitation fell in parts of North Dakota, the biggest U.S. producer, and in South Dakota and Minnesota last week, National Weather Service data show. “Our forecast includes the chance for a significant storm in much of Texas, Oklahoma and parts of southern Kansas,” the group said. “This would aid spring growth of winter wheat. The 11- to 15-day period includes another chance for a few showers in the southwestern Plains, as well as a better opportunity for needed moisture in Iowa and Minnesota.”
Wheat for May delivery slid 1.7 percent to $6.6075 a bushel by 1:39 p.m. London time on the Chicago Board of Trade. A close at that price would be the biggest decline since Feb. 21. Milling wheat for May delivery traded on NYSE Liffe in Paris fell 1.3 percent to 195.25 euros ($256.64) a metric ton.
Global Wheat Harvest Seen Declining From Record as Yields Drop to Average (Source: Bloomberg)
Wheat crops worldwide will probably decline 2 percent in the year starting July 1 as yields return to average after record production, said Australia’s government commodity forecaster. Harvests may drop to 682 million metric tons from 693 million tons as consumption gains 0.3 percent to 681 million tons, the Canberra-based Australian Bureau of Agricultural and Resource Economics and Sciences said today. The world wheat indicator price will drop 7 percent to average about $275 a ton. Wheat futures have tumbled 17 percent in the past year as global production and inventories headed for all-time highs and world trade surged to the second-highest level in at least in five decades. Global stockpiles may reach 220 million tons in 2012-2013 from 213 million tons a year earlier, Mike O’Dea, a senior risk manager at INTL FCStone Inc., said Feb. 22.
“If we see supply increasing more strongly than what it has and stocks continue to rise, that will put pressure on prices,” said Paul Morris, bureau executive director, in an interview yesterday. Abares joins the International Grains Council in predicting a decline in harvests in the coming year because of lower yields. The council expects global production to drop by 15 million tons to 680 million tons, it said Feb. 23.
Raw Sugar Declines Most in Three Weeks on Surplus Concerns; Cocoa Steady (Source: Bloomberg)
Sugar futures fell the most in three weeks on mounting concern that supplies will outpace demand amid faltering global economies. Cocoa was unchanged. Sugar supplies will exceed demand by 7.7 million metric tons in the 12 months ending Sept. 30, up 1.6 million tons from a November forecast, according to London-based Czarnikow Group Ltd., which traded the sweetener in more than 90 countries last year. Equities and commodities fell after a report showed that the European Union’s economy contracted in the fourth quarter. “The surplus is the big story going into the summer,” Jeff Dobrydney, a vice president at Wilton, Connecticut-based Jenkins Sugar Group, said in a telephone interview. Raw-sugar futures for May delivery slid 2.6 percent to settle at 24.05 cents a pound at 2 p.m. on ICE Futures U.S. in New York, marking the biggest drop for a most-active contract since Feb. 9. Still, the price is up 3.2 percent this year.
India’s Ban on Cotton Exports May Unravel Deals After 2011 Disputes Surge (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 by 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.”
India To Review Ban On Cotton Exports Friday (Source: CME)
An Indian ministerial panel will on Friday review a cotton export ban that the government imposed Monday, after the farm minister raised objections against the move saying it would harm farmers. The trade ministry banned cotton exports for the second time in nearly two years, citing concerns that lower stocks could put upward pressure on local prices. Farm Minister Sharad Pawar said he had asked the ban to be revoked because local cotton prices had plunged. "I have raised it with the prime minister," Pawar told reporters on the sidelines of an industry conference. "It is highly objectionable and it's up to the prime minister now to take a view." Later in the day, Textiles Secretary Kiran Dhingra said the ministerial panel will discuss the cotton-demand supply situation afresh Friday. State-run Cotton Corporation of India has been advised to procure from farmers, if cotton prices fall below the state support price, she added.
Dhingra said carry-over stocks at the end of this season have come down to 3.6 million bales due to exports of 9.4 million bales, leading to the ban. The government wants to maintain carry-over stocks of 5 million bales. Each bale equals 170 kg. The trade ministry said Monday it imposed the ban as exporters had already shipped out 9.4 million bales of cotton against the previous expectations for 8.4 million bales for the current marketing year. The export ban sent cotton prices on the ICE Futures U.S. exchange higher, while local prices have started falling. The South Asian nation is the world's second-largest cotton exporter, after the U.S, and sends more than 70% of its shipments to China. Pakistan, Bangladesh and Thailand are the next-largest markets, according to trade executives and textile ministry officials. Pawar said after the ban on exports, traders have stopped buying cotton from farmers in Gujarat, Maharashtra, Madhya Pradesh and Karnataka states in anticipation of a further fall in prices.
Gujarat and Maharashtra are the country's top two cotton-producing states. Local cotton prices have fallen 6% since Monday to INR33,000 per 356 kilograms for the widely traded Shankar-6 variety. Over the past year, prices have fallen 40% on expectation of a record crop. Cotton production in India is expected to reach 34.5 million bales in the marketing year that started Oct. 1, from 33.9 million bales the previous year.
Vietnam Coffee-March loading to fall, trade slow
HANOI, March 6 (Reuters) - Vietnam's coffee exports this month could ease to between 120,000 and 130,000 tonnes, or 2 million to 2.2 million bags, after an estimated 180,000 tonnes shipped in February, traders said on Tuesday.
Falling supplies from Vietnam, the world's largest producer of robusta coffee, could prompt buyers to switch to other origins, as rival producer Indonesia has started harvesting, but prices remain at premiums to London futures.
India cotton curbs jolt market, but gains limited
CANBERRA/SINGAPORE, March 6 (Reuters) - India's surprise decision to ban cotton exports will benefit other key exporters such as Australia and the United States, but the global market is unlikely to see a repeat of last year's rally to all-time highs as more production comes on stream.
U.S. cotton futures raced to end limit up on Monday after India said it had stopped exports with immediate effect to ensure supplies for domestic mills, fuelling speculation that main consumer China would have to turn to other sources.
Ivorian cocoa arrivals down 1.5 pct by March 4
ABIDJAN, March 5 (Reuters) - Cocoa arrivals at ports in top grower Ivory Coast were 1.5 percent lower at around 1,005,000 tonnes by March 4, compared with 1,020,489 tonnes in the same period of the previous season, exporters estimated on Monday.
Exporters estimated around 10,000 tonnes of beans were delivered to the West African state's two ports between Feb. 27 and March 4, up from 8,208 tonnes in the same week a year ago.
Russia to build sugar refineries with 2 mln t capacity-AgMin
MOSCOW, March 5 (Reuters) - Russia plans to build two new sugar refineries in the Stavropol region, each capable of processing 1 million tonnes of sugar beet per year, Russia's Agriculture Ministry said on its website on Monday.
The two new refineries will increase annual production of beet sugar in the Stavropol region to 4 million tonnes. The statement didn't specify the owner of the project.
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.
Brazil CS cane crop seen at 521 mln T -consultant
BRASILIA, March 5 (Reuters) - Brazil's center-south 2012/13 cane harvest should reach 521 million tonnes, consultancy Archer said in its second estimate for the crop due to begin harvesting next month.
That would yield 32.56 million tons of sugar and 22.29 billion liters of ethanol, Sao Paulo-based Archer which specializes in risk management, said in a weekly market update.
Oil Trades Near Two-Week Low on Fuel-Demand Outlook, Europe’s Iran Offer (Source: Bloomberg)
Oil traded near the lowest price in more than two weeks on concern a weakening global economy will curb fuel demand and after the European Union offered to resume talks with Iran over its nuclear program. Futures were little changed after dropping 1.9 percent yesterday. U.S. crude stockpiles rose 4.6 million barrels last week to the highest level in more than five months, according to the American Petroleum Institute. A government report today may show inventories gained 1.5 million barrels. Australia reported economic growth at half the pace forecast by economists. The EU’s foreign-policy chief Catherine Ashton issued a statement urging Iran’s nuclear envoy to meet to seek an accord. “The U.S. story, although strengthening, still remains grass-shoots and there doesn’t seem to be a real lift in petroleum usage there,” David Lennox, an analyst at Fat Prophets in Sydney, said by telephone today. “The market has taken a more skeptical view of military intervention against Iran and has priced it in accordingly.”
Brent falls towards $123 on slowing economies
SINGAPORE, March 6 (Reuters) - Brent crude slipped towards $123, reversing earlier gains as investors began a sell-off on worries about demand from slowing economies in China and Europe, though losses were capped by risks to supply from Iran.
"Traders seem reluctant to hold positions before this week's spate of important economics data," Ben Taylor, a sales trader with CMC Markets, said in a note on Tuesday.
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.
Blast hits Egypt gas pipeline serving Jordan, Israel
CAIRO, March 5 (Reuters) - An Egyptian pipeline carrying gas to Israel and Jordan was bombed on Monday, the 13th such attack since President Hosni Mubarak was toppled in 2011, witnesses said.
The attack on the installation that crosses the increasingly volatile Sinai region occurred in the Massaeed area west of the Mediterranean coastal town of al-Arish, in north Sinai.
Iran oil substitute search may revive tanker rates
DUBAI, March 5 (Reuters) - A rush to replace Iranian crude with oil from other suppliers due to sanctions against Iran could breathe some life back into a limp very large crude carrier (VLCC) market this year, the head of a Dubai-based tanker owner said on Monday. "If you look from a pure supply and demand dynamics it looks like it will be a very difficult year for ship owners," Atle Sebjornsen, the chief executive of leading listed tanker operator Gulf Navigation Holding , told Reuters.
Japan near deal with US on Iran oil, wary of China on defence
TOKYO, March 5 (Reuters) - Japan and the United States are close to an agreement on cuts in Japanese imports of Iranian oil that will allow Tokyo to avoid U.S. sanctions, and may conclude a deal this month, Japanese Foreign Minister Koichiro Gemba told Reuters on Monday.
But Gemba said the two sides might not make public the size of the cuts because of the possible impact on markets.
India's top Iranian oil buyer plans to cut imports
NEW DELHI, March 5 (Reuters) - India's largest Iranian oil buyer plans almost to halve daily imports, industry sources said on Monday, becoming the latest Asian refiner to cut supplies from Iran as Western sanctions make trade with OPEC's second-largest producer difficult.
India, China and Japan buy almost half of Iran's estimated 2.6 million barrels per day of oil exports, but a raft of U.S. and European sanctions aimed at choking off funding for Iran's nuclear programme are squeezing its oil supply lines.
Biodiesel doubts threaten EU green transport targets
BRUSSELS/AMSTERDAM, March 5 (Reuters) - The European Union will almost certainly miss its 2020 targets for cutting transport fuel emissions if policymakers act on scientific warnings about the climate impact of biofuels.
Several EU studies have questioned the climate benefits of biodiesel made from European rapeseed and imported palm oil and soybeans, and some have warned that it releases as many climate-warming emissions as conventional diesel.
Commodity prices posted their biggest drop this year on signs that slowing global economies will erode demand for raw materials. The Standard & Poor’s GSCI Spot Index of 24 commodities dropped 1.5 percent to close at 692.61 in New York, the biggest loss since Dec. 14. Declines were paced by arabica coffee, which dropped to the lowest since October 2010. Lead tumbled as much as 4.1 percent, and gold touched a five-week low. European economies shrunk in the fourth quarter and U.K. retail sales slid for a second month in February, separate reports showed today. China, the world’s biggest consumer of everything from aluminum to cotton to soybeans, yesterday lowered its economic-growth target. Commodities may face a “sizable” correction as the global expansion cools, INTL FCStone Inc. said yesterday.
“Across the board, it’s just a panic,” Harry Denny, a broker at Hoboken, New Jersey-based PVM Futures Inc., said in a telephone interview. “China is just so important for commodities. We knew there was a slowdown coming, but we just hadn’t heard it, and when we heard it, a lot of guys went running.”
USDA seen lowering S.America crop forecasts
CHICAGO, March 6 (Reuters) - Hot and dry weather should prompt the U.S. Department of Agriculture to lower its forecasts of the corn and soybean crops in Brazil and Argentina, moves that would signal increased export demand for U.S. supplies, analysts said.
"I'm expecting increasing old-crop (U.S.) export demand because of these past few months of deteriorating South American corn and soybeans prospects," said Jerry Gidel, grains analyst with Rice Dairy, a Chicago-based brokerage house.
Australia set for another year of bumper grains harvest
CANBERRA, March 6 (Reuters) - Australia is on track for another year of bumper grains and oilseed harvests with ideal growing condition forecast to boost production this year, which could add pressure on global prices.
Even though Australian farmers will reduce wheat plantings in 2012/13 in response to lower global prices, the world's fourth-largest exporter is expected to produce an above average crop after two straight years of record output, according to the Australian Bureau of Agricultural and Resource Economics and Sciences (ABARES).
Corn (Source: CME)
US corn futures end lower, falling along with other commodities on a stronger dollar and concerns about Chinese economic growth and Greek fiscal woes. Corn is also pressured by the head of China's State Grain Administration saying overnight that corn imports are unlikely to rise sharply in the next two years. "Corn took a bit of general selling as the entire market basket of commodities got whacked good and proper today," said Charlie Sernatinger, analyst at brokerage ABN Amro. CBOT May corn, the most actively traded month, falls 6 3/4c, or 1.0%, to $6.54. March corn falls 8 1/4c to $6.58.
Wheat (Source: CME)
US wheat futures end down amid a broader commodities selloff, falling on macroeconomic concerns and a stronger US dollar. Markets are concerned about slower Chinese economic growth and Greece's fiscal woes. "That pressured everything...and so that spilled over into our grain markets, especially our wheat," says Larry Glenn, broker for Frontier Ag. Wheat fundamentals also remain weak, with large global supplies. CBOT May wheat, the most heavily traded month, fell 14 1/4c to $6.57 3/4 a bushel, while KCBT May wheat dropped 18c to $6.98 and MGEX May fell 16c to $8.18 3/4
Rice (Source: CME)
US rice futures end lower, following other commodities down on a stronger dollar and concerns about Chinese and European economic growth. Poor export demand still weighs as well, though losses are limited by a need for high enough prices to prevent farmers from planting other crops in place of rice. CBOT May rice, the most active month, ends down 9c at $14.25 1/2 per hundredweight.
Soy, corn drop, but still near multi-month peaks
SINGAPORE, March 6 (Reuters) - U.S. grains futures pulled back on Tuesday, hurt by a firmer dollar, although corn and soybeans stayed near multi-month highs on expectations of strong export demand and tight supplies.
"Fundamentally soy and corn tend to be well supported. Demand is certainly still there for soybeans and you've also got the supply side shocks from the weather in Brazil," said Victor Thianpiriya, agricultural analyst at Australia and New Zealand Bank.
Australia's GrainCorp sees exports at 9 mln T in 2011/12
CANBERRA, March 6 (Reuters) - Australia's GrainCorp expects to export around 9 million tonnes of grain in the year to September 2012, up from 8 million tonnes last year and about double its annual exports in a normal year.
Alison Watkins, chief executive at GrainCorp, said she was optimistic about the country's 2012/13 wheat crop thanks to favourable growing conditions.
China says won't import large corn volumes
BEIJING, March 6 (Reuters) - China will not need to import large volumes of corn as domestic supply is sufficient to meet demand, the head of the State Grain Administration (SGA) told reporters on Tuesday.
"We will not import corn by a large volume. Corn is not an agriculture product which China is short of," SGA director Nie Zhengbang told reporters on the sidelines of China's annual parliamentary session.
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.
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.
Vietnam Q1 rice exports may fall 44.4 pct y/y - govt
HANOI, March 5 (Reuters) - Rice exports from Vietnam, the world's second-largest exporter of the grain after Thailand, could fall 44.4 percent in the three months ending March from a year earlier to 1 million tonnes, a government report said on Monday.
The decline was alarming as many importers had no plans to buy, Vietnam Food Association Deputy Chairman Pham Van Bay was quoted as saying in the report in the government's online newspaper
Official: China Grain Output Can Increase Gradually In Medium, Long Term (Source: CME)
China will be able to realize gradual medium- and long-term grain output increases, as yields are expected to rise in tandem with improving technologies, a senior agricultural official said. Nevertheless, an output decline in 2012 can't be ruled out after China's grain production increased for an eighth consecutive year in 2011, Chen Xiwen, general director of the Office of the Central Rural Work Leading Group, told a press conference. Chen also said China's government is encouraging the research and development of genetically modified organisms, but will be very prudent in the application of GMO technologies in key grains, which include rice and wheat.
Wheat Falls Most in Two Weeks on ‘Significant’ U.S. Rainfall; Corn Drops (Source: Bloomberg)
Wheat dropped the most in two weeks in Chicago on speculation precipitation in the U.S. southern Plains and “significant” rains in the northern Plains will boost crop prospects. Corn declined. Rain this week will help plants in Kansas, the second- biggest U.S. wheat grower, and in Oklahoma, Commodity Weather Group said in an e-mailed report today. About six times the normal amount of precipitation fell in parts of North Dakota, the biggest U.S. producer, and in South Dakota and Minnesota last week, National Weather Service data show. “Our forecast includes the chance for a significant storm in much of Texas, Oklahoma and parts of southern Kansas,” the group said. “This would aid spring growth of winter wheat. The 11- to 15-day period includes another chance for a few showers in the southwestern Plains, as well as a better opportunity for needed moisture in Iowa and Minnesota.”
Wheat for May delivery slid 1.7 percent to $6.6075 a bushel by 1:39 p.m. London time on the Chicago Board of Trade. A close at that price would be the biggest decline since Feb. 21. Milling wheat for May delivery traded on NYSE Liffe in Paris fell 1.3 percent to 195.25 euros ($256.64) a metric ton.
Global Wheat Harvest Seen Declining From Record as Yields Drop to Average (Source: Bloomberg)
Wheat crops worldwide will probably decline 2 percent in the year starting July 1 as yields return to average after record production, said Australia’s government commodity forecaster. Harvests may drop to 682 million metric tons from 693 million tons as consumption gains 0.3 percent to 681 million tons, the Canberra-based Australian Bureau of Agricultural and Resource Economics and Sciences said today. The world wheat indicator price will drop 7 percent to average about $275 a ton. Wheat futures have tumbled 17 percent in the past year as global production and inventories headed for all-time highs and world trade surged to the second-highest level in at least in five decades. Global stockpiles may reach 220 million tons in 2012-2013 from 213 million tons a year earlier, Mike O’Dea, a senior risk manager at INTL FCStone Inc., said Feb. 22.
“If we see supply increasing more strongly than what it has and stocks continue to rise, that will put pressure on prices,” said Paul Morris, bureau executive director, in an interview yesterday. Abares joins the International Grains Council in predicting a decline in harvests in the coming year because of lower yields. The council expects global production to drop by 15 million tons to 680 million tons, it said Feb. 23.
Raw Sugar Declines Most in Three Weeks on Surplus Concerns; Cocoa Steady (Source: Bloomberg)
Sugar futures fell the most in three weeks on mounting concern that supplies will outpace demand amid faltering global economies. Cocoa was unchanged. Sugar supplies will exceed demand by 7.7 million metric tons in the 12 months ending Sept. 30, up 1.6 million tons from a November forecast, according to London-based Czarnikow Group Ltd., which traded the sweetener in more than 90 countries last year. Equities and commodities fell after a report showed that the European Union’s economy contracted in the fourth quarter. “The surplus is the big story going into the summer,” Jeff Dobrydney, a vice president at Wilton, Connecticut-based Jenkins Sugar Group, said in a telephone interview. Raw-sugar futures for May delivery slid 2.6 percent to settle at 24.05 cents a pound at 2 p.m. on ICE Futures U.S. in New York, marking the biggest drop for a most-active contract since Feb. 9. Still, the price is up 3.2 percent this year.
India’s Ban on Cotton Exports May Unravel Deals After 2011 Disputes Surge (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 by 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.”
India To Review Ban On Cotton Exports Friday (Source: CME)
An Indian ministerial panel will on Friday review a cotton export ban that the government imposed Monday, after the farm minister raised objections against the move saying it would harm farmers. The trade ministry banned cotton exports for the second time in nearly two years, citing concerns that lower stocks could put upward pressure on local prices. Farm Minister Sharad Pawar said he had asked the ban to be revoked because local cotton prices had plunged. "I have raised it with the prime minister," Pawar told reporters on the sidelines of an industry conference. "It is highly objectionable and it's up to the prime minister now to take a view." Later in the day, Textiles Secretary Kiran Dhingra said the ministerial panel will discuss the cotton-demand supply situation afresh Friday. State-run Cotton Corporation of India has been advised to procure from farmers, if cotton prices fall below the state support price, she added.
Dhingra said carry-over stocks at the end of this season have come down to 3.6 million bales due to exports of 9.4 million bales, leading to the ban. The government wants to maintain carry-over stocks of 5 million bales. Each bale equals 170 kg. The trade ministry said Monday it imposed the ban as exporters had already shipped out 9.4 million bales of cotton against the previous expectations for 8.4 million bales for the current marketing year. The export ban sent cotton prices on the ICE Futures U.S. exchange higher, while local prices have started falling. The South Asian nation is the world's second-largest cotton exporter, after the U.S, and sends more than 70% of its shipments to China. Pakistan, Bangladesh and Thailand are the next-largest markets, according to trade executives and textile ministry officials. Pawar said after the ban on exports, traders have stopped buying cotton from farmers in Gujarat, Maharashtra, Madhya Pradesh and Karnataka states in anticipation of a further fall in prices.
Gujarat and Maharashtra are the country's top two cotton-producing states. Local cotton prices have fallen 6% since Monday to INR33,000 per 356 kilograms for the widely traded Shankar-6 variety. Over the past year, prices have fallen 40% on expectation of a record crop. Cotton production in India is expected to reach 34.5 million bales in the marketing year that started Oct. 1, from 33.9 million bales the previous year.
Vietnam Coffee-March loading to fall, trade slow
HANOI, March 6 (Reuters) - Vietnam's coffee exports this month could ease to between 120,000 and 130,000 tonnes, or 2 million to 2.2 million bags, after an estimated 180,000 tonnes shipped in February, traders said on Tuesday.
Falling supplies from Vietnam, the world's largest producer of robusta coffee, could prompt buyers to switch to other origins, as rival producer Indonesia has started harvesting, but prices remain at premiums to London futures.
India cotton curbs jolt market, but gains limited
CANBERRA/SINGAPORE, March 6 (Reuters) - India's surprise decision to ban cotton exports will benefit other key exporters such as Australia and the United States, but the global market is unlikely to see a repeat of last year's rally to all-time highs as more production comes on stream.
U.S. cotton futures raced to end limit up on Monday after India said it had stopped exports with immediate effect to ensure supplies for domestic mills, fuelling speculation that main consumer China would have to turn to other sources.
Ivorian cocoa arrivals down 1.5 pct by March 4
ABIDJAN, March 5 (Reuters) - Cocoa arrivals at ports in top grower Ivory Coast were 1.5 percent lower at around 1,005,000 tonnes by March 4, compared with 1,020,489 tonnes in the same period of the previous season, exporters estimated on Monday.
Exporters estimated around 10,000 tonnes of beans were delivered to the West African state's two ports between Feb. 27 and March 4, up from 8,208 tonnes in the same week a year ago.
Russia to build sugar refineries with 2 mln t capacity-AgMin
MOSCOW, March 5 (Reuters) - Russia plans to build two new sugar refineries in the Stavropol region, each capable of processing 1 million tonnes of sugar beet per year, Russia's Agriculture Ministry said on its website on Monday.
The two new refineries will increase annual production of beet sugar in the Stavropol region to 4 million tonnes. The statement didn't specify the owner of the project.
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.
Brazil CS cane crop seen at 521 mln T -consultant
BRASILIA, March 5 (Reuters) - Brazil's center-south 2012/13 cane harvest should reach 521 million tonnes, consultancy Archer said in its second estimate for the crop due to begin harvesting next month.
That would yield 32.56 million tons of sugar and 22.29 billion liters of ethanol, Sao Paulo-based Archer which specializes in risk management, said in a weekly market update.
Oil Trades Near Two-Week Low on Fuel-Demand Outlook, Europe’s Iran Offer (Source: Bloomberg)
Oil traded near the lowest price in more than two weeks on concern a weakening global economy will curb fuel demand and after the European Union offered to resume talks with Iran over its nuclear program. Futures were little changed after dropping 1.9 percent yesterday. U.S. crude stockpiles rose 4.6 million barrels last week to the highest level in more than five months, according to the American Petroleum Institute. A government report today may show inventories gained 1.5 million barrels. Australia reported economic growth at half the pace forecast by economists. The EU’s foreign-policy chief Catherine Ashton issued a statement urging Iran’s nuclear envoy to meet to seek an accord. “The U.S. story, although strengthening, still remains grass-shoots and there doesn’t seem to be a real lift in petroleum usage there,” David Lennox, an analyst at Fat Prophets in Sydney, said by telephone today. “The market has taken a more skeptical view of military intervention against Iran and has priced it in accordingly.”
Brent falls towards $123 on slowing economies
SINGAPORE, March 6 (Reuters) - Brent crude slipped towards $123, reversing earlier gains as investors began a sell-off on worries about demand from slowing economies in China and Europe, though losses were capped by risks to supply from Iran.
"Traders seem reluctant to hold positions before this week's spate of important economics data," Ben Taylor, a sales trader with CMC Markets, said in a note on Tuesday.
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.
Blast hits Egypt gas pipeline serving Jordan, Israel
CAIRO, March 5 (Reuters) - An Egyptian pipeline carrying gas to Israel and Jordan was bombed on Monday, the 13th such attack since President Hosni Mubarak was toppled in 2011, witnesses said.
The attack on the installation that crosses the increasingly volatile Sinai region occurred in the Massaeed area west of the Mediterranean coastal town of al-Arish, in north Sinai.
Iran oil substitute search may revive tanker rates
DUBAI, March 5 (Reuters) - A rush to replace Iranian crude with oil from other suppliers due to sanctions against Iran could breathe some life back into a limp very large crude carrier (VLCC) market this year, the head of a Dubai-based tanker owner said on Monday. "If you look from a pure supply and demand dynamics it looks like it will be a very difficult year for ship owners," Atle Sebjornsen, the chief executive of leading listed tanker operator Gulf Navigation Holding , told Reuters.
Japan near deal with US on Iran oil, wary of China on defence
TOKYO, March 5 (Reuters) - Japan and the United States are close to an agreement on cuts in Japanese imports of Iranian oil that will allow Tokyo to avoid U.S. sanctions, and may conclude a deal this month, Japanese Foreign Minister Koichiro Gemba told Reuters on Monday.
But Gemba said the two sides might not make public the size of the cuts because of the possible impact on markets.
India's top Iranian oil buyer plans to cut imports
NEW DELHI, March 5 (Reuters) - India's largest Iranian oil buyer plans almost to halve daily imports, industry sources said on Monday, becoming the latest Asian refiner to cut supplies from Iran as Western sanctions make trade with OPEC's second-largest producer difficult.
India, China and Japan buy almost half of Iran's estimated 2.6 million barrels per day of oil exports, but a raft of U.S. and European sanctions aimed at choking off funding for Iran's nuclear programme are squeezing its oil supply lines.
Biodiesel doubts threaten EU green transport targets
BRUSSELS/AMSTERDAM, March 5 (Reuters) - The European Union will almost certainly miss its 2020 targets for cutting transport fuel emissions if policymakers act on scientific warnings about the climate impact of biofuels.
Several EU studies have questioned the climate benefits of biodiesel made from European rapeseed and imported palm oil and soybeans, and some have warned that it releases as many climate-warming emissions as conventional diesel.
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