Friday, June 3, 2011

20110603 1836 FCPO EOD Daily Chart Study.

FCPO closed : 3421, changed : +18 points, volume : higher.
Bollinger band reading : correction range bound upside biased.
MACD Histrogram : weakening, buyer reducing exposure.
Support : 3420, 3350, 3300, 3270 level.
Resistance : 3450, 3470, 3500, 3550 level.
Comment :
FCPO closed recorded small gain with increasing volume exchanged while soy oil overnight closed higher and currently trading higher.
Fear of higher stock level after export data for the month of May showing only small improvement seems capping market price from staying higher.
Daily chart formed an up doji bar candle with long upper shadow positioned between middle and upper Bollinger band after market opened gap up, surge higher tested above resistance level followed by profit taking activities pressed price downwards all the way to closed near opening price ahead of the weekend.
Technical chart reading remained suggesting a correction range bound upside biased market development testing support and resistance level.
When to buy : buy at support or weakness with quick cut loss and profit target.
When to sell : sell at resistant or strength with quick cut loss and profit target.

20110603 1752 FKLI EOD Daily Chart Study.

FKLI closed : 1558.5 changed : +1 point, volume : lower.
Bollinger band reading : correction range bound upside biased.
MACD Histrogram : turned downward, buyer taking profit.
Support : 1550, 1540, 1530, 1515 level.
Resistance : 1565, 1580, 1590, 1600 level.
Comment :
FKLI closed recorded small gain with slower volume changed hand doing 1 point discount compare to cash market that closed little higher while regional(Asia & European) trading mixed and overnight U.S. market closed weaker.
Factor to watch here will be U.S. jobs reports, Moody's rating agency warned of a downgrade against U.S. economy should there is still no action taken on the U.S. debt ceiling issue.
Daily chart formed an up doji bar candle closed nearer to upper Bollinger band level after market opened unchanged, tested higher near resistance level and turned downwards lower recording loss before recovered partially to closed near opening price.
Chart reading still suggesting a correction range bound upside biased market development testing support and resistance level. On the other hand, the chart shows that a possible MACD Histrogram negative divergence is forming.
When to buy : buy at support or weakness with quick cut loss and profit target.
When to sell : sell at resistant or strength with quick cut loss and profit target.

20110603 1542 Global Market & Commodities Related News.

Shares tread water before U.S. data; dollar slips
HONG KONG, June 3 (Reuters) - Asian stocks steadied on Friday though any gains were set to be modest while the euro rose to a one-month high versus the dollar as investors braced for a key U.S. jobs report that will reveal whether the economy is headed for a protracted slowdown.   
A raft of grim U.S. data this week has already made investors wary about the near-term economic outlook and pushed 10-year treasury yields below three percent for the first time since December this week.

U.S. wheat rises for 2nd day; corn, soy steady
SINGAPORE, June 2 (Reuters) - U.S. wheat rose 0.6 percent on Friday, on track for a second day of gains supported by doubts that exports from the Black Sea region can cover shortfalls expected from adverse weather hurting crop prospects in the United States, Europe and Canada.
"It is probably Russia, which is now talking about putting tariffs on exports to keep control over domestic prices," said Paul Deane, agricultural commodity strategist at ANZ.

China's soymeal exports rise, sells up to 80,000 T
SINGAPORE, June 3 (Reuters) - China has sold up to 80,000 tonnes of soymeal to Japan and Vietnam in deals signed in the last two weeks as slow domestic demand prompts soybean processors to look for overseas markets, traders said.
"There is supply push in China. Indian prices are much higher and monsoon is likely to slow exports," said one executive trader with an international trading company in Singapore. "Given the situation in India and China, it makes sense for China to export."

Argentine April soy crushing up 0.8 pct yr/yr
BUENOS AIRES, June 2 (Reuters) - Argentine soy-crushing edged 0.8 percent higher in April from April 2010 to 3.7 million tonnes, the government said in its latest monthly report.
Argentina is the world's top supplier of soyoil and soymeal and the third-biggest exporter of unprocessed beans.

Informa sees US winter wheat crop smallest in 5 years
CHICAGO, June 2 (Reuters) - Analytical firm Informa Economics estimated the 2011 U.S. winter wheat harvest will be the smallest in five years and below its previous forecast.
Informa projects a crop of 1.421 billion bushels, down from the firm's May 6 forecast of 1.441 billion, trade sources said Thursday.

Cameroon cocoa production hits new season record
YAOUNDE, June 2 (Reuters) - Cocoa production in Cameroon, the world's No. 5 grower, has already reached a new record, with three months remaining in the season, official figures released on Thursday showed.
Data from the National Cocoa and Coffee Board showed output this season hit 219,295 tonnes by the end of April, already 5 percent higher than the previous record in the 2008-2009 season.

Ukraine cuts grain export forecast to 15-18 mln T
KIEV, June 2 (Reuters) - Ukraine may export 15-18 million tonnes of grain in the 2011/12 season, Agriculture Minister Mykola Prysyazhnyuk said on Thursday, a figure that is lower than earlier official forecasts.
The ministry has until now projected grain exports at 19-20 million tonnes. Prysyazhnyuk did not give any reasons for the revision.

Brent crude flat ahead of crucial U.S. job data
SINGAPORE, June 3 (Reuters) - Brent and U.S. crude were flat on Friday as the dollar steadied against a basket of currencies and investors waited to see if U.S. non-farm payrolls data would add to evidence of a faltering global economy.
"The weakness in data and (higher) inventories should have been a night off for oil, but oil prices went up this morning possibly due to the weakness in the U.S. dollar," said Ben Le Brun, a Sydney-based markets analyst at CMC Markets.

China may cut tax and charges on imported coal -report
BEIJING, Jun 3 (Reuters) - China may cut value-added tax and port charges on imported coal to encourage more overseas purchases, an official with the National Development and Reform Commission was quoted by Chinese media as saying, as the country battle the worst summer power shortage in years.
"Relevant government departments are studying adjustments of VAT and port charges relating to coal imports," the unnamed official told reporters in a meeting on June 1, according to a website report (

LME Copper rebounds ahead of U.S. payrolls data
SHANGHAI, June 3 (Reuters) - LME copper rose on Friday as base metals rebounded from overnight losses after investors regained some confidence from a steady showing by U.S. stocks ahead of closely-watched U.S. non-farm payroll data later in the day.
"During the European and much of the U.S. trading session on Thursday, we had very weak (commodity) prices," said Jonathan Barratt, managing director of Commodity Broking Services in Sydney.

China alumina prices drop 7 pct since March, exports mulled
HONG KONG, June 2 (Reuters) - China's alumina prices have fallen 7 percent since March due to increased supply, prompting merchants to consider exporting the raw material used for primary aluminium production to a steadier international market, industry sources said on Thursday.
China, the world's top aluminium producer, was previously the biggest alumina buyer in the international market, but it has ramped up its alumina output. Monthly imports dropped to 130,561 tonnes in April from nearly 680,000 at the start of 2010.

Gold steady; trade thin as US jobs data eyed
SINGAPORE, June 3 (Reuters) - Spot gold held steady on Friday, supported by Moody's warning on U.S. credit rating and a subsequent weaker dollar, while investors moved to the sidelines before the release of the closely watched U.S. non-farm payrolls data.
"If the payrolls data turns out worse than expected, it may help gold advance towards the record high in the next few days," said Hou Xinqiang, an analyst at Jinrui Futures, who said gold is still on an upward trend after a correction last month knocked prices below $1,500.

20110602 1409 Global Market & Crude Oil Related News.

GLOBAL MARKETS: Stocks bounce before U.S. data; dollar at 1-mth lows
HONG KONG, June 3 (Reuters) - Asian stocks bounced on Friday though any gains were set to be modest before a key U.S. jobs report later in the day while the dollar fell to a one-month low against a basket of currencies after ratings agency Moody's warned of a downgrade.  
"The market is more likely to react to better-than-expected jobs data and cover dollar-short positions, as investors have already priced in weak numbers," says Tomohiro Nishida, treasury department manager at Chuo Mitsui Trust and Banking.

OIL: Crude extends gains on weak dlr, awaits jobs data
TOKYO, June 3 (Reuters) - U.S. crude futures extended gains on Friday supported by a weak dollar as the market awaited carefully watched U.S. nonfarm payrolls data due later in the day.
The market so far has seen limited downward pressure from news that OPEC is considering raising output possibly by as much as 1.5 million bpd, ahead of the group's meeting in Vienna on June 8. One delegate said a 1 million-bpd hike would be the likely outcome.

NATURAL GAS: Natgas ends up 4 pct after 4-mth high on heat, EIA
NEW YORK, June 2 (Reuters) - U.S. natural gas futures rose nearly 4 percent on Thursday, extending heat-related gains and jumping to a more than four-month spot chart high after weekly data showed a smaller-than-expected build to inventories.
"Today's EIA inventory injection was simply bullish," said Energy Management Institute's Dominick Chirichella, noting in addition to hotter-than-normal temperatures for the next several weeks, nuclear power plant outages were supportive.

EURO COAL: Prices dip on lack of Europe, China buying
LONDON, June 2 (Reuters) - Coal prices softened by around 50 U.S. cents a tonne on Thursday due to a lack of buying in both Atlantic and Pacific markets.
"We still don't know what the Chinese government is going to do, although there's the assumption that something must be done, and where that leaves imports is unclear," one trader said.

COMMODITIES: Markets mixed as economic concerns grow
NEW YORK, June 2 (Reuters) - Gold and copper moved lower on Thursday as concerns about the U.S. economy grew, while oil reversed higher and U.S. wheat futures jumped on weather concerns after a two-day slide.
"It's another bailout boost. The dollar also got hammered by the Moody's warning about U.S. default and the Pembroke fire definitely provided some lift," said Phil Flynn, analyst at PFGBest Research in Chicago.

20110603 1029 Local & Global Economic Related News.

Malaysia: Posts balance of payments surplus in 1Q
Malaysia's balance of payments posted a surplus of RM15.9bn in the first quarter compared with a deficit of RM19.6bn in the same quarter last year. From the fourth quarter of last year, the surplus in the first quarter dipped from RM17.9bn, said the Statistics Department in a statement yesterday. The surplus in the first quarter compared with the same period last year rose because of a lower outflow in the financial account which reported an outflow of RM6bn from RM17.6bn previously. The current account surplus in the first quarter of 2011 improved to RM30.2bn while international reserves increased by RM15.9bn to RM344.5bn. (StarBiz)

China: Local-Government debt risk needs 'attention,' PBOC says. Chinas central bank urged paying attention to the credit risks of local-government financing vehicles because their debts have long maturities and are difficult to oversee. Some companies set up by provincial and municipal governments to fund infrastructure projects are unsustainable, the Peoples Bank of China said in a report on its website. The loans are generally large, with long maturities, and it is difficult to oversee their use, the central bank said. (Source: Bloomberg)

India: Food inflation slows to two-week low as supplies increase. An index measuring wholesale prices of agricultural products rose 8.06% YoY in the week ended May 21 compared to 8.55% YoY the previous week. (Source: Bloomberg)  

Thailand: Vote may force rates higher as parties promise handouts
Thailand’s election may force the central bank to add to seven interest-rate increases in the past year, as promises of higher wages and handouts by politicians threaten to spur inflation. Prime Minister Abhisit Vejjajiva has pledged to raise the minimum wage by 25%, give cash to the elderly and guarantee farmers’ incomes to appeal to voters loyal to exiled former premier Thaksin Shinawatra. The opposition Pheu Thai party, led by Thaksin’s sister, has promised tablet PCs, rice- price guarantee schemes, high-speed trains, dams, and a new city. The policies promoted by both the government and opposition would put the onus on the Bank of Thailand to contain inflation that’s accelerated to a 32-month high. (Bloomberg)

Australia: Trade surplus unexpectedly narrowed in April
Australia’s trade surplus unexpectedly narrowed in April as imported civil aircraft outpaced rising exports of metal ores and minerals. The excess of exports over imports was AUD1.6bn (USD1.7bn), from a revised AUD1.69bn surplus in March. Reserve Bank of Australia Governor Glenn Stevens has paused raising interest rates at 4.75% for the past five meetings to help the economy recover from natural disasters at home and abroad. (Bloomberg)

Greece: Agrees to EUR6.4bn in budget steps
Greece has agreed to EUR6.4bn in new measures to cut its 2011 budget deficit and aims to wrap up bailout talks with international inspectors by Friday, a senior government official told Reuters yesterday. Prime Minister George Papandreou would present the main points of the government's medium-term budget plan when he meets JeanClaude Juncker, the chairman of euro zone finance ministers, in Luxembourg yesterday, the official said. (StarBiz)

Greece: EU, IMF wind up review as second bailout readied. European Union and International Monetary Fund officials will complete a review of Greece's plan for EUR 78b (USD 113b) in asset sales and austerity measures as they prepare the nation's second bailout in little more than a year. The assessment caps a week when Greeces fiscal crisis worsened enough for Moody's Investors Service to raise the probability of a default to 50%.
(Source: Bloomberg)

US: Consumer comfort rises for second week on fuel prices
Consumer confidence in the US rose for a second week as gasoline prices receded. The Bloomberg Consumer Comfort Index improved to minus 47.1 in the week ended 29 May from minus 48.4 in the prior period. The 2.3- point gain over the past two weeks has yet to make up for the 6.8-point month long slide that propelled the gauge to a nine-month low two weeks ago. Gasoline costs that have dropped by about 20 cents a gallon in the past month from an almost three-year high may continue to support sentiment. At the same time, falling home prices and slowing job growth may cause households to limit spending, which accounts for about 70% of the world’s largest economy. (Bloomberg)

US: Jobless claims decrease less than forecast
More Americans than forecast filed applications for unemployment benefits last week, signaling the job market is weakening as employers trim staff to cut costs. Jobless claims fell by 6,000 to 422,000 in the week ended 28 May, according to Labor Department figures yesterday in Washington. A pickup in dismissals signals companies will also look to limit hiring, raising the risk that employment data due tomorrow will show payroll gains moderated in May. Slowing job growth may cause households to further curb spending, which accounts for about 70% of the world’s largest economy. (Bloomberg)

U.S: Moody's says rating may be cut if no progress on debt limit. Moody's Investors Service said it will put the U.S. governments Aaa credit rating under review for a downgrade unless theres progress on increasing the debt limit by mid-July. "The heightened polarization over the debt limit has increased the odds of a short-lived default," New York-based Moody's said in a statement. "If this situation remains unchanged in coming weeks, Moodys will place the rating under review." (Source: Bloomberg)

U.S: Factory orders fell 1.2% MoM in April, most since May 2010 as demand for aircraft waned and Japans earthquake restrained auto-related supplies. This followed a revised 3.8% MoM gain in March. Orders for durable goods fell 3.6% MoM. (Source: Bloomberg)

20110603 1028 Malaysia Corporate Related News.

KLCI chart reading :
pullback correction upside biased.

Petronas Enters Canada with Gas Field Purchase and Plan for Asian Export (Source: Bloomberg)
Petroliam Nasional Bhd, Malaysia’s state-owned oil company, made its entry into Canada by agreeing to pay Progress Energy Resources Corp. (PRQ) as much as C$1.07 billion ($1.1 billion) for stakes in natural-gas fields with the potential for exports to Asia. Petronas will pay C$267.5 million for a 50 percent share in the three fields in British Columbia, Calgary-based Progress said in a statement today. The Malaysian company also will fund 75 percent, or up to $C802.5 million, of field development costs for the next five years and will explore a possible liquefied natural gas terminal to export the fuel.

Contract to Malakoff to build 1,000MW power plant expected soon
Malakoff Corp Bhd, owned by MMC Corp Bhd, is expected to be awarded a contract to build a 1,000MW coalfired power plant soon, said sources. According to sources, the plant will have a 15-year concession to sell the power at a rate of 25 sen per kwh to Tenaga Nasional Bhd (TNB). “MMC has yet to receive the award letter but the decision has been made already, based on tender submissions,” said one source. In August, the Energy Commission had awarded a concession to TNB to develop a 1,000MW coal-fired power plant on its existing power plant site in Manjung Perak. (StarBiz)

MSM Malaysia IPO set to raise RM800m
MSM Malaysia Holdings Bhd's (MSM) initial public offering (IPO) is poised to raise around RM800m for the sugar producer and its holding company. MSM's listing on Bursa Malaysia's Main Market, slated for 28 June, involves offering up to 234.56m shares to retail and institutional investors. Some RM370m of the RM800m proceeds will go to MSM parent Felda Global Ventures Holdings SB (FGVH), while another RM422m will go directly to MSM's coffers. FGVH, which now has a 48.68% stake in MSM, is selling off 15.6% of its MSM shares for some RM370m. The RM422m, meanwhile, will arise from MSM's existing shares. MSM will also sell a portion of its shares to institutional investors at between RM3.30 and RM3.50 per share. The final retail price, after completion of the institutional book building, will be at a slight discount from the initial RM3.38 retail price or 97% of the institutional price. (BT)

PAAB buys Selangor water bonds for RM5.8bn
The government's water asset management company, Pengurusan Aset Air Bhd (PAAB), has bought 99.6% of Selangor's water debts for RM5.8bn. The offer, which was made on 20 May, confirms a Business Times report that the federal government was poised to make an offer to buy over Selangor water debts on the said date. The acquisition of the bonds brings PAAB one step closer to taking over Selangor water assets, a deal that has dragged on for two years now. The takeover offer was made via special purpose vehicle, Acqua SPV Bhd. It was to resolve the bond woes of five water concessionaires in Selangor. They are Syarikat Bekalan Air Sungai Selangor SB, Syarikat Pengeluar Air Sungai Selangor SB, Puncak Niaga SB, Titisan Modal SB and Viable Chip SB. (BT)

Petronas buys Canadian shale gas assets worth RM3.32bn
Petroliam Nasional Bhd (Petronas), via its wholly-owned subsidiary Petronas International Corp Ltd (PICL), has signed an agreement with Canada-based Progress Energy Resources Corp to acquire 50% of the latter's interest in shale gas assets worth CAD1.07bn (RM3.32bn). In a statement yesterday, Petronas said the agreement was signed to develop the Altares, Lily and Kahta shale gas assets in north-eastern British Columbia. “The assets included in the transaction cover approximately 150,000 gross working-interest acres of land with an estimated contingent gas resource of more than 15trn cu ft. The assets will be operated by Progress,” said Petronas. It said the proposed acquisition would mark Petronas' maiden entry into Canada and would allow for accelerated upstream growth that could potentially advance a liquefied natural gas (LNG) export value proposition in that country. (StarBiz)

Kretam to buy up stakes of three companies for RM512m
Kretam Holdings Bhd is acquiring three companies for RM511.5m to expand its oil palm cultivation business and venture further downstream. It has proposed to buy the entire equity interests in Abedon SB, Green Edible Oil SB (GEO) and Palm Products International Alliance SB (PPIA) in a move that will see its plantation landbank increase to 23867ha from 17793ha. The proposed acquisition is “synergistic” to Kretam’s existing oil palm cultivation activities and would provide an alternative source of income, it said in an exchange filing yesterday. (Malaysian Reserve)

Petra Energy, Labuan Shipyard sign MoU
Petra Energy Bhd’s wholly-owned subsidiary Petra Resources SB has signed a memorandum of understanding (MoU) with Labuan Shipyard & Engineering SB (LSE) to use the latter’s shipyard facilities at Victoria Harbour in Labuan for Petra Resources’ fabrications activities. Under the MoU, both parties may explore areas for cooperation on the leasing of fabrication yards, fabrication works and storage facilities as well as commercial ventures in oil and gas sector, it said in a statement. (BT)

Westports: Embarks on RM2b expansion plan. Port operator Westports Malaysia Sdn Bhd hopes to increase its container handling capacity to 10m TEUs by 2017 as it embarks on a RM2b expansion programme. The group will be undertaking the construction of new container terminals and acquiring machineries and equipment to cater to a growing volume since the economic recovery last year. The company targets to handle 6.2m TEUs this year, about 12.7% more than the 5.5m TEUs it handled last year, on the back of a recovery in global container throughput volume. (Source: Business times)

AirAsia: Tony Fernandes' Tune Air sells 2% of AirAsia. Datuk Seri Tony Fernandes' private vehicle Tune Air Sdn Bhd on Monday raised just over RM150m by selling 2% in AirAsia Bhd. Some 55.5m AirAsia shares changed hands off-market in a single block for RM158.18m or RM2.85 a share on May 30. (Source: The Edge Financial Daily)

IPO: XOX's IPO oversubscribed by 13.2 times. Mobile virtual network operator XOX Bhd's initial public offering (IPO) has been oversubscribed by 13.2 times. Its IPO attracted 6,652 applications for 106.5m shares with a total value of RM85.2m, for the public tranche of 7.5m shares, the company, which slated for ACE market listing on June 10. (Source: The Star)

20110603 1021 Global Market Related News.

 DJIA chart reading : downside biased.
Hang Seng chart reading : side way range bound.

Equities down but not out on U.S. soft patch
SINGAPORE, June 2 (Reuters) - Asian stocks slid on Thursday, with a steady stream of weak U.S. data putting a damper on risk taking ahead of Friday's payrolls report, though valuations will probably in the near term limit a big decline in global share prices.
"U.S. shares needed a correction of their recent steep gains. Japanese shares will be capped for now but cheap valuations will give the market support," said Ryota Sakagami, strategist at Nomura Securities in Tokyo.

Consumer Comfort Rises in U.S. Bloomberg Index as Gasoline Prices Decline (Source: Bloomberg)
Consumer confidence in the U.S. rose for a second week as gasoline prices receded.

US May auto sales dip as price strategy backfires
DETROIT, June 1 (Reuters) - U.S. car sales sputtered in May, slumping to levels that were much lower than expected as higher vehicle prices led consumers to put off purchases in the face of a weakening economy.
Tightening supplies of vehicles after the Japan earthquake emboldened many companies, including Toyota Motor Corp  and Honda Motor Co Ltd , to raise car and truck prices, a strategy that analysts and investors said had backfired.

US recovery fears mount after slow jobs, factory data
NEW YORK, June 1 (Reuters) - U.S. companies hired far fewer workers than expected in May and output in the manufacturing sector slowed to its lowest level since 2009, adding to concerns that the U.S. recovery is running out of steam.
Economists slashed their forecasts for Friday's U.S. payrolls report, considered the best barometer of the world's biggest economy, after private-sector job growth tumbled to just 38,000, its lowest level in eight months.

Fed’s QE2 Failed to Boost U.S. Spending, Pimco’s El-Erian Says: Tom Keene (Source: Bloomberg)
The Federal Reserve’s quantitative easing policy failed to meet the “ultimate objective” of boosting employment and economic growth, said Mohamed El-Erian , chief executive officer at Pacific Investment Management Co.

Fed May Signal Balance Sheet Will Stay at Record to Counter U.S. Slowdown (Source: Bloomberg)
A wave of surprisingly weak data on the U.S. economy may spur Federal Reserve policy makers to support growth by making it clear they’re in no hurry to shrink the central bank’s record balance sheet. There’s a “strong possibility” that the Federal Open Market Committee will say following the June 21-22 meeting that it will keep reinvesting proceeds from maturing debt for a while, said Michael Feroli, chief U.S. economist at JPMorgan Chase & Co. (JPM) in New York. Previously, the FOMC has said it will keep the benchmark interest rate near zero for an “extended period” without a similar pledge about its balance sheet.

U.S. Jobless Claims Fell Less Than Forecast (Source: Bloomberg)
More Americans than forecast filed applications for unemployment benefits last week, signaling the job market is weakening as employers trim staff to cut costs. Jobless claims fell by 6,000 to 422,000 in the week ended May 28, exceeding the 417,000 median forecast of economists surveyed by Bloomberg News, according to Labor Department figures today in Washington. Another report showed consumer comfort stabilized last week as gasoline prices retreated.

Treasuries Head for Third Weekly Gain as Data Signals Slowing Job Growth (Source: Bloomberg)
Treasuries headed for a third weekly gain before a U.S. report that economists said will show employers hired fewer workers in May.

Moody’s May Cut U.S. If No Debt Limit Progress (Source: Bloomberg)
Moody’s Investors Service said it will put the U.S. government’s Aaa credit rating under review for a downgrade unless there’s progress on increasing the debt limit by mid-July. “The heightened polarization over the debt limit has increased the odds of a short-lived default,” New York-based Moody’s said in a statement today. “If this situation remains unchanged in coming weeks, Moody’s will place the rating under review.”

Dollar Near One-Month Low on Rating Concerns (Source: Bloomberg)
The dollar reached a one-month low against the euro before a report forecast to show U.S. employers added fewer jobs in May, signaling a slowing economy will prevent the Federal Reserve from tightening policy.

Raising Taxes Isn’t A ‘Kiss of Death’ for Employment Growth, History Shows (Source: Bloomberg)
Cutting taxes creates jobs, and raising taxes destroys them. That’s the view of policymakers, from President Barack Obama to his Republican adversaries. Evidence from the last two decades, however, suggests that conventional wisdom is wrong. In the five years after a $241 billion tax increase in 1993, which Republicans criticized as the largest ever, the U.S. economy created more than 15 million jobs and grew at an average annual rate of 3.8 percent.

Sporting-Goods Prices May Increase in Latest Sign of Consumer Inflation (Source: Bloomberg)
Retailers are poised to boost prices on athletic footwear, apparel and sports equipment as they join other industries in passing along rising costs for commodities, foreign labor and freight. More than 90 percent of sporting-goods manufacturers paid higher input costs in the first quarter, and 41 percent of these companies already increased wholesale prices, according to a quarterly survey of private, independent vendors and retailers conducted by Robert W. Baird & Co.

China Lending-Binge Hangover Looms in 2013 as Wen Spurs Low-Income Housing (Source: Bloomberg)
China’s plan to rein in property prices with a record homebuilding program may worsen local debt risks even as it proves a boon to companies from domestic cement makers to Chilean copper exporters. Premier Wen Jiabao aims to build 36 million low-cost homes by 2015, an initiative that will see 2 trillion yuan ($307 billion) added to local government borrowing by 2012, bringing it to a total 12 trillion yuan, Standard Chartered Plc estimates. The surge of loans to local authorities may spark a wave of bank bailouts that hobble economic growth.

Chinese Economic Slowdown May Lead to 75% Plunge in Commodities, S&P Says (Source: Bloomberg)
A “sudden” slowdown in China may lead commodity prices to fall as much as 75 percent from current levels, Standard & Poor’s said. Unexpected shifts in government policies or problems in the banking sector may trigger such a slowdown, S&P said in a report e-mailed today. The floor for aluminum is 65 cents to 70 cents a pound ($1,433 to $1,543 a metric ton), compared with about $1.20 a pound now and copper’s floor is $1.50 to $1.75 a pound, compared with $4.10 a pound currently, S&P said.

Japan’s 10-Year Bonds Are Poised for Weekly Drop Amid Political Turmoil (Source: Bloomberg)
Japan’s 10-year bonds were set for the biggest weekly drop in two months on prospects political turmoil may delay reconstruction from a March earthquake and add to credit concerns.

Nikkei Advances as Euro Gains Against Yen, Investors Eye U.S. Jobs Report (Source: Bloomberg)
Japan’s Nikkei 225 (NKY) Stock Average advanced after the euro strengthened against the yen and as investors await a U.S. jobs report. Nintendo Co., a video-game console maker that gets a third of its revenue from Europe, and Fanuc Corp., Japan’s No. 1 maker of industrial robots, both gained at least 0.4 percent after the yen weakened against the euro, boosting the earnings outlook for exporters. Mitsubishi Corp., Japan’s biggest commodities trader, declined after metal prices dropped.

Basel Capital-Buffer Rule May Affect 26 Financial Firms, FSB’s Memo Says (Source: Bloomberg)
As many as 26 financial firms could be forced to hold extra capital to avoid collapses that would threaten global financial stability, according to a participant at a meeting of the Financial Stability Board last week.

E. Coli Outbreak Infects 1,600 Across Europe as Scientists Seek Out Cause (Source: Bloomberg)
More than 1,600 people in Europe have been infected with a strain of E. coli bacteria that’s never been seen in an outbreak before, the World Health Organization said, as authorities search for the source of the malady. The bacteria, which began spreading in Germany, has sickened 1,064 there, an increase of 268, while 470 people have symptoms of a condition that can cause acute kidney failure, up by 97 from yesterday, the WHO said today in a statement on its website. Cases have also been reported in nine other European countries. Seventeen people in Germany and one in Sweden have died, Deutsche Presse Agentur reported, citing local officials.

Trichet Proposes Euro-Area Finance Ministry to Coordinate Fiscal Policies (Source: Bloomberg)
European Central Bank President Jean- Claude Trichet said governments should consider setting up a finance ministry for the 17-nation euro region as the bloc struggles to contain a region-wide sovereign debt crisis.

BOE’s Fisher Says He Would Consider Expanding Asset Purchases in Downturn (Source: Bloomberg)
Bank of England policy maker Paul Fisher said he would consider adding to the bank’s emergency bond purchases if the U.K. economy took a “sudden downturn.”
“I would consider it and I’ve said I still hold that possibility open,” Fisher, the bank’s executive director for markets, said in an interview with the Daily Mail newspaper published on its website late yesterday. Still, he added he was “somewhat reluctant” since the threat of deflation subsided.

Spain Auctions 4 Billion Euros of Government Bonds, Meeting Maximum Target (Source: Bloomberg)
Spain sold 4 billion euros ($5.8 billion) of bonds, meeting the maximum target the Treasury set for the sale and sending the nation's bonds higher. The Treasury in Madrid said it sold 2.75 billion euros of three-year bonds at an average yield of 4.037 percent, compared with 3.568 percent the last time the securities were auctioned on April 7 and 4.118 percent on the secondary market before the sale. It also sold 1.2 billion euros of four-year debt at an average yield of 4.23 percent.

Moody's cuts Greece, sees debt restructuring likely
NEW YORK/ATHENS, June 1 (Reuters) - Moody's on Wednesday cut Greece's credit rating by three notches to an extremely speculative level on debt restructuring worries and warned that more downgrades could come.
Citing a growing risk that the government will fail to stabilize its debt position without a debt restructuring, Moody's cut Greece's rating to Caa1 from the previous level of B1, bringing it seven notches into junk territory.

Thai Vote May Spur Inflation, Forcing Higher Rates as Thaksinomics Returns (Source: Bloomberg)
Thailand’s election may force the central bank to add to seven interest-rate increases in the past year, as promises of higher wages and handouts by politicians threaten to spur inflation. Prime Minister Abhisit Vejjajiva has pledged to raise the minimum wage by 25 percent, give cash to the elderly and guarantee farmers’ incomes to appeal to voters loyal to exiled former premier Thaksin Shinawatra. The opposition Pheu Thai party, led by Thaksin’s sister, has promised tablet PCs, rice- price guarantee schemes, high-speed trains, dams, and a new city.

FOREX-Euro at 1-mth high as dollar's struggles get harder
LONDON, June 2 (Reuters) - The euro rose to a one-month high against the weak dollar on Thursday, boosted by expectations of a quick-fix solution to the Greek debt crisis, although gains could be checked by investors selling into the bounce.
The euro was also helped by strong demand at a Spanish bond auction, comments by European Central Bank President Jean-Claude Trichet, and the struggling dollar, which fell to a one-month low against a basket of currencies.

20110603 1015 Global Commodities Related News.

Corn (Source: CME)
US corn futures extend their rally, ending higher on continued supply worries. Concerns about lost acres from Missouri River flooding, along with acres that aren't getting planted at all in the eastern corn belt due to wet weather, are supportive. Analysts say a record crop that was needed to help replenish historically low supplies seems increasingly unlikely. Today's trade also narrowed the spread between old and new crop, with July rising 8c to $7.66 1/2 per bushel and December jumping 22c to $6.95.

Wheat (Source: CME)
US wheat futures end higher, rebounding from losses earlier this week on support from corn and lingering crop worries. Rains in the northern Plains will continue to hamper planting there, analysts say. They also note that while the market has fallen this week due to the end of a Russian export ban, declining prices versus corn will make wheat more attractive as a feed option, boosting demand. July CBOT wheat ends up 9 3/4c to $7.69/bushel, KCBT July jumps 17 1/2c to $9.09 and MGEX July rises 14c to $10.19 1/2.

Rice (Source: CME)
US rice futures end higher in a very modest rebound from Wednesday's limit-down tumble. In addition to better-than-expected planting progress, Wednesday's slide was prompted by a decline in wheat. But wheat futures also rebounded, boosting rice. July CBOT rice settles up 1 cent to $14.57 per hundredweight. It remains well below the May high of $15.55 but well above the May low of $13.64.

Wheat Futures Gain 0.5%, Advance for Second Day in Chicago; Corn Declines (Source: Bloomberg)
Wheat futures advanced for a second day, adding 0.4 percent to $7.725 a bushel on the Chicago Board of Trade at 8:05 a.m. Singapore time. Corn futures slipped 0.3 percent to $7.645 a bushel, while soybeans were little changed at $14.0575 a bushel.

Rainfall Expected To Bring Some Relief To Parched European Wheat Crop (Source: CME)
France and Germany are likely to see scattered/widespread showers this weekend that could last until the end of next week, conditions likely to add some relief to wheat yield declines, weather forecasters and grain analysts have said. Eastern France and Germany face the risk of substantial losses in wheat yields as a severe lack of rainfall caused by a blocking high pressure continues to stop the normal procession of Atlantic Depressions from bringing dynamic rainfall to Europe. France's worst drought on record is set to weigh heavily on its wheat harvest, French Agriculture Minister Bruno Le Maire said this week, potentially denting global wheat supplies. But ANZ bank analysts said Western Europe will see showers this weekend adding some relief to parched crops in France and Germany. "The weather focus remains on Germany and France, with limited rainfall forecast until the weekend. A lack of moisture continues to stress the French wheat and rapeseed crops and reduce yields," ANZ bank analysts said.
ANZ bank analysts added: "However, rainfall beginning on the weekend is forecast across much of France and Germany. In particular this rainfall is timely for Germany, which is a later crop than in France, helping to limit yield declines at this stage." "Looking at the latest run, the showery conditions should last at least until the end of next week," Edward Smith Meteorological Consultant at WeatherEdge forecasters said. "Whether the showers will provide enough rainfall is debatable. Areas where they develop will get good figures of rainfall but there will be areas that may miss them. It will give some improvement though to the wheat crop," Smith said.

Traders Say Egypt Eager For Russian Wheat But GASC Cautious (Source: CME)
Egypt's state grain buyer remains wary of purchasing Russian wheat after losing hundreds of thousands of tons after the Kremlin banned exports last year, its head of purchasing said. But traders said the world's largest wheat buyer is already planning tenders this month in anticipation of an influx of cheap Russian wheat when the embargo on shipments is lifted on July 1. Mohammed Abdullah of Egypt's General Authority for Supply Commodities said he fears the Kremlin may still find a way of limiting exports again if faced with a shortfall in supplies. Many grain traders declared force majeure--a get out clause for contracts in the case of unexpected circumstances--in the wake of a ban, leaving GASC to seek more expensive supplies elsewhere. "I do not want to go with all my heart and make a public announcement because of the problem that we had before," he said. "There are 690,000 [metric] tons that we contracted but we did not get them because there was a period of time that we could not import from Russia.
"We expect that this will happen again." As the world's largest wheat importer, Egypt suffered last year when Russia's ban on exports sent prices soaring to three-year highs. The cost of GASC's subsidy scheme, which produces 80 billion loaves of low-cost bread a year for the millions of Egyptians who live on the poverty line, is expected to rise around 50% to $4.4 billion this year. Yet traders in Russia said GASC, like state grain buyers in other importing countries in the Arab world, are "desperately waiting for Russia to open the gates." One said GASC is talking down its interest to keep down prices. "GASC in no way can ignore Russian wheat," he said. "It's the quality but even more the attractive price. At the moment they talk the way they do as they are not interested in firming prices." News that Russia would lift its grain ban came as little surprise to the market.
Industry body the Russian Grain Union estimates there are up to 15 million tons of stocks in the country, taking up much-needed storage space for the 2011-12 harvest, which the Kremlin pegs at up to 90 million tons. Yet European wheat futures have pulled back around 8% from their highs on Friday, before the ban was announced, tumbling 5% on Monday alone in the wake of the announcement. Abdullah said he expects global wheat prices to fall by 10% to 15% when cheap exports begin to make their way into the market. An Egyptian trader said buyers are delaying buys in the hope that prices will fall further but GASC is likely to launch a tender in the coming weeks. "Till now GASC hasn't tendered but I think they will be obliged to start by the end of June, synchronizing with the Russian start," he said. Still, the stress on Egypt's budget should to some extent be mitigated by a good domestic crop this year.
Abdullah said this year's harvest, which ends in July, is expected to be around about 8 million tons, of which GASC is likely to purchase around 3 million tons.

Corn dips on planting hopes, wheat steady after selloff
SINGAPORE, June 2 (Reuters) - Chicago corn fell around half a percent on Thursday, while soybeans were little changed on forecasts of dry weather boosting prospects for U.S. Midwest plantings, which have been delayed by excessive rains.
"Limiting gains in corn was a dry weather outlook for the corn belt which should boost the pace of sowing this week to close to 97 percent," ANZ said in a report.

Brazil soy, sugar, iron, crude exports rise in May
SAO PAULO, June 1 (Reuters) - Brazilian exports of soybeans, soy meal, raw sugar, coffee, iron ore and crude oil rose in May from April, contributing to the strongest monthly trade surplus so far in 2011, trade ministry data showed on Wednesday.
Brazil finished harvesting a record soybean harvest of roughly 72 million tonnes in May. Soybean exports jumped to 5.3 million tonnes last month from 5.1 million tonnes in April, but were still shy of the 5.7 million tonnes shipped a year ago.

Russia, grains lobby urge export limits
MOSCOW, June 1 (Reuters) - Russia should consider introducing export limits on grain linked to domestic prices through a system of floating import duties, its central bank governor and an industry lobby said on Wednesday.
"To soften the effect on domestic prices of the end of the ban we could temporarily, say for one year, introduce a mechanism of floating" tariffs, RIA quoted central bank governor Sergei Ignatyev as saying.

India's May 21 food price index up 8.06 pct y/y vs 8.55 pct week ago - govt
NEW DELHI, June 2 (Reuters) - India's food price index rose 8.06 percent in the year to May 21, government data showed on Thursday, slowing down from an annual rise of 8.55 percent a week ago.   
The fuel price index climbed 12.54 percent compared with a rise of 12.11 percent a week earlier.

Russia bans EU vegetables over E.coli, EU protests
MOSCOW/LONDON, June 2 (Reuters) - Russia banned imports of raw vegetables from the European Union on Thursday
because of a deadly E.coli outbreak centred in Germany, a move branded "disproportionate" by Brussels.
German health officials said the infections, which have killed 17 people and made more than 1,500 others ill in
eight European countries, could go on for months and their precise source may never be pinned down.

Russian grain exporters return, duty threat looms
LONDON, June 1 (Reuters) - Russian grain exporters were back in business on Wednesday, offering supplies at an
international wheat tender as they looked to make a quick start to shipments when a nearly year-old ban is lifted
at the start of July.
A sharp rise in domestic prices since plans to lift the export ban were announced on Saturday, however, threatens
to undermine Russia's efforts to control inflation and triggered calls for floating export duties to be imposed.

High coffee prices to stay for years
LONDON, June 1 (Reuters) - Coffee prices are set to remain high, as farmers increased maintenance and fertilizer
use will not boost production enough to match growing demand.
Arabica coffee prices hit a 34-year high in May on tight supplies of high quality beans, but as coffee trees take
around three years to produce crop, output is not keeping pace with demand.

ICE sugar edges up early, coffee little changed
LONDON, June 2 (Reuters) - ICE sugar prices edged up in early trade on Thursday in a modest rebound following the prior session's steep setback, while coffee and cocoa were little changed.
ICE raw sugar futures rose early as the market clawed back some of Wednesday's heavy losses supported partly by sentiment that the production outlook in top exporter Brazil may need to be downwardly revised.

China 2011 cotton planting area seen up 6.6 pct on yr -assn
BEIJING, June 2 (Reuters) - China's cotton planting area this year is expected to rise 6.6 percent from 2010, said China Cotton Association on Thursday.
Total cotton area is estimated at 5.472 million hectares, said the association in a statement published on its website, adding that cotton planting is nearly complete.

Brazil CS sugar output view may fall more -Raizen
PIRACICABA, Brazil, June 1 (Reuters) - Sugar and ethanol output in Brazil's center-south could fall from current forecasts unless cane's sugar content picks up as the harvest advances, the country's largest cane group, Raizen, said on Wednesday.
Raizen said sugar output could fall to as low as 31.1 million tonnes compared with a current industry estimate of 34.6 million. Ethanol production could fall slightly to 25.2 billion liters, below the current industry estimate of 25.5 billion.

Tariff hikes, coal price cap cure for China power ills
SHANGHAI/BEIJING, June 2 (Reuters) - A cap on spot coal prices and further power tariff hikes might be the strong medicine Beijing has to apply to cure the nation's crippling power malaise and prevent widespread summer blackouts.
Yet even if Beijing is prepared to increase electricity prices again -- a drastic move given the country's battle against inflation -- it would still be a band-aid applied to a perennial problem that could worsen in coming years.

Oil Heads for Second Weekly Gain; U.S. Crude Stockpiles Unexpectedly Rise (Source: Bloomberg)
Oil climbed in New York, heading for a second week of gains, as traders said a weaker dollar against the euro countered a rise in crude inventories in the world’s biggest consumer of the commodity. Futures gained as much as 0.5 percent and the euro advanced against the dollar as Moody’s Investors Service said it may place the U.S. government’s rating under review for possible downgrade. Crude earlier fell after a government report showed an unexpected increase in inventories to the highest level in two years.

Crude Oil Futures Rise as Dollar Weakens After Moody’s Downgrade Warning (Source: Bloomberg)
Oil rose as the dollar weakened after Moody’s Investors Service said it may place the U.S. government’s rating under review for possible downgrade. Crude advanced 11 cents as the euro extended gains following the Moody’s announcement that it may review the rating if there is no progress on increasing the debt limit. Futures fell earlier after a U.S. government report showed an unexpected increase in inventories to the highest level in two years. Crude reversed in the last 30 minutes of floor trading.

Crude Oil Futures Advance in New York, Reversing Earlier Decline of 1.8% (Source: Bloomberg)
New York crude oil rose, reversing an earlier decline of as much as 1.8 percent. Crude oil futures for July delivery increased 42 cents, or 0.4 percent, to $100.71 a barrel at 2:01 p.m. on the New York Mercantile Exchange. Oil earlier fell as low as $98.46 a barrel.

China alumina prices drop 7 pct since March, exports mulled
HONG KONG, June 2 (Reuters) - China's alumina prices have fallen 7 percent since March due to increased supply, prompting merchants to consider exporting the raw material used for primary aluminium production to a steadier international market, industry sources said on Thursday.
China, the world's top aluminium producer, was previously the biggest alumina buyer in the international market, but it has ramped up its alumina output. Monthly imports dropped to 130,561 tonnes in April from nearly 680,000 at the start of 2010.

Titanium sponge hits highest since Feb 2008
LONDON, June 1 (Reuters) - Prices of titanium sponge hit the highest since February 2008 on increasing demand from the aerospace industry and tight supply.
Titanium sponge  rose to $11-13 a kg on the European spot market this week from $10-12 per kg last week.

METALS-Copper under pressure after US jobless data
LONDON, June 2 (Reuters) - Copper remained under pressure  on Thursday after U.S. weekly jobless claims fell less than expected, heightening concerns about the world's biggest economy but a weaker dollar prevented further losses.
Benchmark copper on the London Metal Exchange  was $9,045 a tonne at 1248 GMT, from $9,102 a tonne at the close on Wednesday. Trading volumes were light due to a religious holiday that closed offices in most European countries.

PRECIOUS-Gold gains for second day as US worries mount
LONDON, June 2 (Reuters) - Gold rose for a second day on Thursday, nearing one-month highs, as concerns grew about the outlook for the U.S. economy and the dollar weakened.
Fears mounted the U.S. economy may be running out of steam as data showed companies had hired far fewer workers than expected in May and that output in the manufacturing sector hit its lowest level since 2009.

Gold Falls as Euro’s Rebound Erodes Demand for Metal as Investment Haven (Source: Bloomberg)
Gold futures fell the most in two weeks as the euro climbed, eroding demand for the precious metal as a haven asset. Silver also tumbled. The euro rose as much as 1.3 percent against the dollar to a three-week high after German Chancellor Angela Merkel said she is committed to the common currency. Last month, gold fell 1.3 percent after reaching a record $1,557.40 an ounce on May 2.

20110603 1012 Soy Oil & Palm Oil Related News.

Soy Oil chart reading : side way range bound little upside biased.

Soybeans (Source: CME)
US soybean futures finish at a nine-week high on concerns plantings will fall short of expectations. Planting started slowly due to soggy conditions and remains sluggish in wet areas of the eastern Midwest and northern Plains, analysts say. Gains accelerated as the nearby July contract triggered pre-placed buy orders when it topped last week's high of $13.98 1/4 a bushel. "That was kind of the catalyst to get the funds in there to drive the markets higher," says Brian Hoops, president of Midwest Market Solutions. CBOT July soybeans close up 20 3/4c at $14.07.

Soybean Meal/Oil (Source: CME)
US soy-product futures close higher with soybeans on concerns about slow planting and tight supplies of the oilseed. Processors are bidding up for soybeans even though "margins still remain poor in the crush industry," says Karl Setzer at MaxYield Cooperative. "Buyers have sales on the books they need to cover with raw soybeans, no matter what the cost." Soybeans are crushed into meal and oil. CBOT July soymeal rises $5.30 to $366/short ton, while July soyoil gains 0.48c to 58.91c/pound.

Palm oil inches up on demand hopes, stocks weigh
KUALA LUMPUR, June 2 (Reuters) - Malaysian palm oil futures rose 0.3 percent on Thursday as traders await signs of Asian and Middle Eastern countries stockpiling ahead of the Muslim holy month of Ramadan in August.
"I was hoping for a decline in prices to lure in these buyers. It would have started earlier, although the strong export data in May and firm external markets have kept prices up," said a trader with a foreign commodities brokerage in Kuala Lumpur.

Brazil soy exports rise in May vs April - govt
SAO PAULO, June 1 (Reuters) - Brazilian exports of soybeans rose in May from April, contributing to the strongest monthly trade surplus so far in 2011, trade ministry data showed on Wednesday.
Brazil finished harvesting a record soybean harvest of roughly 72 million tonnes in May.

Linn Group lowers US corn, soy plantings f'casts
CHICAGO, June 1 (Reuters) - The Linn Group on Wednesday lowered its forecast of U.S. 2011 corn plantings to 87.233 million acres, from its May 18 estimate of 89.538 million.
The Chicago commodity research and brokerage firm also cut its estimate of U.S. 2011 soybean plantings to 74.894 million acres, from its mid-May estimate of 75.094 million.