Monday, April 15, 2013

China First-Quarter Growth Trails Estimates as Risks Loom


China’s economic growth unexpectedly eased in the first quarter as factory-output gains weakened, a sign the nation’s recovery from the slowest expansion in 13 years has lost momentum.

Gross domestic product rose 7.7 percent from a year earlier, the National Bureau of Statistics said in Beijing today. That compares with the 8 percent median forecast in a Bloomberg News survey of 41 analysts and 7.9 percent in the fourth quarter. March industrial production gained less than estimated while retail-sales growth matched forecasts.

RTRS - India's March palm oil imports fall for 2nd month in a row


NEW DELHI, April 12 (Reuters) - India's imports of palm oil fell for a second straight month in March as domestic supply improved and purchases by the world's biggest buyer continued to suffer from an import levy imposed in January.

India, the world's biggest importer of vegetable oils, buys mainly palm oil from Malaysia and Indonesia and a small quantity of soyoil from Brazil and Argentina.

Palm oil imports dropped 12 percent to 708,262 tonnes in March, Mumbai-based trade body the Solvent Extractors' Association, said in a monthly update.

Imports of all vegetable oils, including non-edible oils, fell 7.5 percent to 896,714 tonnes in March, pulled down by the drop in palm oil imports, the data showed.

Higher domestic cooking oil supplies, as the rapeseed harvest season peaked last month, helped to curb imports. Rapeseed is the main oilseed crop grown in winter.

Buyers also drew on stockpiles, as import prices rose.

Stockpiles of edible oil at ports fell nearly nine percent during March to 850,000 tonnes, the trade body said, off a record of 930,000 tonnes on March 1.

"Stocks were still on the higher side despite the decline in monthly imports," said B.V. Mehta, executive director of the SEA.

Mehta said overall stocks -- including those in transit from ports to refineries -- could depress domestic prices before the summer oilseed planting season. Total stocks had edged up to an all-time record of 2.1 million tonnes by April 1.

Traders said the high level of stocks, both at ports and in transit, could keep imports capped between 800,000 and 885,000 tonnes for the current month.

India's imports of palm oil hit an all-time high in January as leading producers Indonesia and Malaysia made exports more attractive by varying tax levels.

To protect domestic refiners and oilseed growers, India retaliated with a duty of 2.5 percent on crude palm oil in the second half of January, which had hit imports in February.

On March 21, Malaysian palm oil futures touched their highest since Feb. 25, making imports more costly.

India imports about 60 percent of its cooking oil needs of 17 million tonnes. Palm oil makes up nearly 80 percent of that. In 2011/12, the country imported 10 million tonnes of cooking oil.

India's demand for cooking oils is rising as its population grows and becomes better off. New Delhi tries to encourage domestic oilseed production, partly by guaranteeing minimum prices to farmers, but has had limited success.

Soyoil imports also declined a quarter to 46,990 tonnes last month, as demand faded at the tail end of the marriage season.

RTRS - COMMODITIES-Gold, oil, copper fall sharply on economic woes


NEW YORK, April 12 (Reuters) - Major commodity markets fell sharply on Friday, with oil tumbling to a nine-month low and gold hitting a 20-month low as investors dumped the commodities on worries about a weak global economic outlook and a plan for Cyprus to sell gold reserves.

Spot gold  fell more than 4 percent, hitting a session low of $1,493.35 an ounce, the lowest since July 2011.

U.S. gold for June delivery  fell to a session low of $1,491.40 an ounce. 

Gold entered bear market territory, dipping below $1,500 an ounce, or more than 20 percent from its peak of more than $1,900 an ounce in September 2011.

Cyprus may need to sell gold to raise money to fund a portion of its bailout, the cost of which has grown to 23 billion euros.

"The news on Cyprus' possible gold sale puts the focus back on the fact that many central banks in the developed world have been selling gold in the past few decades and they are still not so keen to hold gold as they used to be," Danske Bank analyst Christin Tuxen said.

Trader's highlight


NEW YORK, April 12 (Reuters) - U.S. stocks closed slightly lower on Friday, retreating from the previous session's record highs on a drop in financial shares, but major indexes had the biggest weekly gains since the first week of the year.

Shares pared losses in the final hour of trading, with the Dow helped by a rally in Home Depot. For the week, the S&P 500 rose 2.3 percent while the Nasdaq rose 2.8 percent. It was the best weekly gain for both since the first week of the year. The Dow rose 2.1 percent.

Financial stocks were pressured on Friday by a pair of disappointing bank results and a delay in closing a large bank deal.

Weak retail sales and consumer sentiment data, suggesting the economy lost momenturm, also weighed on stocks.

The string of discouraging data indicates that equities could be vulnerable to a pullback, especially following a rally that has taken the S&P 500 up 11.4 percent so far this year. Telecom and healthcare, two defensive groups, were among the few S&P sectors in positive territory.

"We're due for choppiness, given the run we've had, especially since the strong data we've seen recently looks increasingly misleading," said Hank Herrmann, chief executive of Waddell & Reed Financial Inc in Overland Park, Kansas.

"We're moving at a slower pace, and those who got overly excited about GDP growth are probably pulling in their horns a bit."

"The numbers weren’t terrible, but also not terribly inspiring," said Herrmann, who helps oversee $105 billion in assets. "I wanted to see more credit growth as confirmation that the economy is doing better and that didn’t show up."

The Dow Jones industrial average was down 0.08 points, or 0.00 percent, at 14,865.06. The Standard & Poor's 500 Index was down 4.51 points, or 0.28 percent, at 1,588.86. The Nasdaq Composite Index was down 5.21 points, or 0.16 percent, at 3,294.95.


Oils - NEW YORK, April 12 (Reuters) - Brent crude oil fell to a nine-month low near $101 a barrel on Friday as a broad investor sell-off in commodities triggered a fall as much as $3 a barrel, but the global oil benchmark pared losses in afternoon New York trade as bargain hunters emerged.

The cross-commodity rout started in gold on Friday after the precious metal fell below $1,500 an ounce for the first time since July 2011. An unexpected contraction in U.S. retail sales added to pressure on oil, grains and metals as investors moved into cash.

Brent found some support in the afternoon as traders started buying the global benchmark while selling U.S. crude oil, traders said, on news of a large increase of Canadian crude oil flows into Cushing, Oklahoma, delivery point.

In early trade, Brent crude for May delivery fell more than $3 a barrel to hit a $101.09, the lowest prices since July. It recovered by more than $2 by the close, settling at $103.11 a barrel, down $1.16 on the day. Brent has fallen by around 13 percent since February as uncertainty about the strength of global demand has mounted.

U.S. crude for May delivery lost $2.22 a barrel to settle at $91.29 a barrel, up from an earlier low of $90.27 a barrel. The May contract closed below its 200-day moving average of $91.51 a barrel, a key technical indicator watched by traders.

"There's an underlying anxiety in the crude market about demand growth going forward into the second half of the year," said Andy Lebow, vice president at Jefferies Bache in New York.

"Gold came off and industrials are really getting hit today. That's part and parcel of the anxiety over global demand growth."

The spread between Brent crude and U.S. crude widened to around $12 a barrel Friday afternoon as U.S. crude prices were pressured by reports of increased flows into the U.S. oil contract delivery hub at Cushing, Oklahoma.


CBOT Soybean - April 12 (Reuters) - Chicago Board of Trade soybean futures rose for a second straight session on Friday on tight supplies of old-crop U.S. soybeans, traders said.
  • The inverted July/November spread widened to a two-week high at $1.53-1/4, premium July. Concerns about dwindling old-crop supplies lifted July, while ideas that planting delays could shift more 2013 U.S. acres into soybeans pressured new-crop November.
  • Soymeal followed soybeans higher, with talk of European demand for U.S. soymeal adding support.
  • Soyoil pressured by spillover weakness from crude oil and meal/oil spreading.
  • Gains in soybeans limited by overall weakness in the commodities sector, with crude oil and gold pressured by a weak global economic outlook and a plan for Cyprus to sell gold reserves.
  • The National Oilseed Processors Association's monthly soybean crush data scheduled for release on Monday should show the U.S. crush for March at 136.8 million bushels, a Reuters survey showed. NOPA reported the year-ago crush for March 2012 at 140.534 million bushels and the February 2013 crush at 136.322 million bushels.
  • USDA said private exporters reported sales of 110,000 tonnes of U.S. soybeans to unknown destinations for delivery in 2013/14.
  • Wet and cold weather in the U.S. crop belt next week will continue to stall spring corn plantings but also will add valuable soil moisture - meteorologist.
  • Argentina's agriculture ministry said the country's soybean harvest was 25 percent complete but behind the year-ago pace of 30 percent.
  • For the week, spot CBOT soybeans rose 51-1/4 cents, or 3.8 percent, their biggest weekly rise since August. Soymeal rose 2.1 percent, halting a two-week slide. Spot soyoil  rose 0.8 percent. 

BMD CPO - KUALA LUMPUR, April 12 (Reuters) - Malaysian palm oil futures dropped to a near two-week low in choppy trade on Friday, with no clear guidance from overseas markets and investors worried a bird flu outbreak in China could crimp demand from the world's second largest edible oil buyer.

Investors and analysts said an escalation of the H7N9 bird flu outbreak in eastern China, where the death toll has hit 10 victims, could spark a potential slowdown in feed demand and negatively affect commodities, including palm oil.

"Soybean is one of the key ingredients in chicken feed and China is among the world's biggest grains buyer," Phillip Futures said in a note on Friday. "If H7N9 gets much (more) serious, commodities market might be affected."

The benchmark June contract  on the Bursa Malaysia Derivatives Exchange fell 0.3 percent to 2,345 ringgit ($770) per tonne by Friday's close, posting its third straight weekly loss with a decline of 0.6 percent this week. Prices were rangebound between 2,336 and 2,367 ringgit, touching a low unseen since April 1.

Total traded volumes were thin at 23,752 lots of 25 tonnes each, compared to the average 35,000 lots.

Traders were also slightly anxious that bullish inventory and export data in March could mean palm oil stocks are bottoming out in Malaysia, the No.2 producer of the tropical oil, and higher stockpiles could return in the coming months.

Official data on Wednesday showed that stocks in the southeast Asian country declined a steeper than expected 10.9 percent in March to 2.17 million tonnes, from 2.43 tonnes in February.

"The market is stuck in a tight range. There is minimum movement in overseas markets, and at the same time the Dalian is down slightly -- there's (also) a bit of worry about the bird flu in China," said a trader with a foreign commodities brokerage in Kuala Lumpur.

In other markets, Brent crude oil sank to an eight-month low under $103 a barrel on Friday as the outlook for global oil demand growth dimmed, although an improvement in U.S. jobs data put a floor under prices.

In vegetable oil markets, U.S. soyoil for May delivery was almost flat in late Asian trade. The most active September soybean oil contract on the Dalian Commodities Exchange fell 0.7 percent.


Regional Equities - BANGKOK, April 12 (Reuters) - Thai benchmark stock index hit a one-week high on Friday after the Bank of Thailand raised its 2013 economic growth forecast, while Malaysia's main index slipped into negative territory after institutional-led selling.

Most other Southeast Asian stock markets finished off their day's highs, tracking Asian shares which retreated after recent gains.

Bangkok's SET index  rose 0.7 percent to 1,527.32, the highest close since April 4. Demand for dividend-yielding stocks sent top mobile phone operator Advanced Info Service Pcl  to a record close of 257 baht, up 5.8 percent.

Thailand's central bank raised its 2013 economic growth forecast to 5.1 percent from 4.9 percent on Friday. 

The SET index outperformed the region on the week, up 2.5 percent, slightly ahead of the Philippines' 2.4 percent. Philippine index ended the week at a record closing high of 6,891.43, led by big caps such as SM Investments Corp

Trading volume of Thai stock market halved the full day average over the past 30 sessions ahead of a four-day weekend. The exchange will be closed on April 15-16 for holidays, reopening on April 17.

Malaysia's main index  fell 0.5 percent to 1,698.53, with local institutions selling a net 253 million ringgit ($83.36 million) while foreign investors buying a net 223 million ringgit ($73.48 million), stock exchange data showed.

Foreign investors are increasingly upbeat on Malaysian equities in the run-up to the country's election on May 5.